Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (106938)	1/11/2010 5:55:44 PM
From: GST	3 Recommendations Read Replies (1) \| Respond to of 110194

<anything that reduces debt is deflationary. if you reduce debt, you reduce money available to the economy. PERIOD.> I am relieved to learn that the US is no longer in debt to the rest of the world and that we have discovered a way to buy oil from Canada and Saudi Arabia, cars from Germany and everything else we use every day from China without having to borrow a cent. You know, that trillion dollar current account deficit was really starting to get me worried, but then I learned from your post that our debts are just going 'poof' and our trading partners cannot wait to get their hands on the rare commodity -- the dollar. The dollar is so rare now that we have decided to both sell and then instantly buy back our own debt to create trillions of dollars out of thin air because those pesky trading partners of ours forgot to buy our debt even after we asked them so politely to buy it or else. Oh, wait, now I remember -- your post did not deal at all with the realities of a global economy. You should go to the major ports of the US and watch them unload the ships -- then ask yourself 'how do we pay for this'? The answer -- debt, and then more debt and more debt on top of that debt. Where you got the idea that our debts are not driving the economy I do not know. And when our incomes go down and we go broke -- then what about our debts? There is only one bankruptcy court for countries -- the currency market. When you bankrupt your currency you cannot use it to buy goods and services from global markets at bargain basement prices -- quite the contrary. With every dollar we borrow -- with every person in the US who loses his job -- with every debt that we cannot pay -- all of the things you think are deflationary -- all of them point towards one thing -- the death of the purchasing power of the dollar, and that is the very heart of inflation. Why? Because the dollar is priced based on our global credit rating -- and anybody who lends a dollar to the US is nuts. Look around the world -- there are not enough idiots out there to lend us what we need to save the dollar, and a weak dollar is what inflation is all about.