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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (15975)	1/2/2009 5:40:04 PM
From: carranza2	2 Recommendations Read Replies (1) \| Respond to of 71463

As I wrote Elroy, the unfortunate thing is that even if we had not had the credit bubble burst, we were about to face a fiscal crisis which the bailouts have only exacerbated severely. You are right, we'll see. These are IMO the most difficult challenges we have faced since the Revolution and the Civil War. Unfortunately, they present themselves slowly so that it is difficult for most to recognize how dire the consequences of not meeting them head-on truly are. The social, political and cultural ramifications for the next couple of decades of the bizarre circus of unaffordable consumption we have engaged in the last few years are really astonishing.

To: axial who wrote (15975)	1/2/2009 6:13:05 PM
From: Tommaso	Respond to of 71463

>>>he may deserve credit for saving the system from collapse. <<< At this point, what's built into the U. S. financial system is inflation that may rise as high as 40% per year. Between the middle of 1971 and the middle of 1974, consumer prices doubled. The money supply increase this time is much larger. There's a temporary flight to liquidity that has been going on, and a transient illusion of price deflation. Once everyone remembers that what they take for money has no solid material basis, the inflation of early 2007 will resume and rise to much higher levels. The only cheerful thing I've seen lately is the way that Social Security payments have actually been adjusted for something close to a real inflation rate. Also, my wife's TIPS-based pension just rose by 7% from November to December. So there are some shreds of honesty left.

To: axial who wrote (15975)	1/2/2009 7:34:54 PM
From: THE ANT	Respond to of 71463

I agree with the Austrian School.Excess GDP from bubble days must be lost now.It is just a question of long and shallow or short and deep (excess GDP above long term trend must be canceled by below trend line GDP)One can argue that the government will decrease overall GDP loss only in that they prevent overshoot to the downside.On the other hand I think that slowing things down will allow money losing enterprise to survive a little longer and lose more money.Again, I am reminded of Soviet era production that was losing so much money that the Soviets would have been beter off closing their factories and exporting the raw materials.We now face this in the area of financing,housing and car manufacturing.