jreeves
Senior Member
- Feb 12, 2008
- 6,588
- 319
- 48
First of all, I think we ought to kiss TORO's ass for taking the time to put so much effort into schooling us on this issue.
Kudos are definitely in order.
Now, as to inflation and deflation?
Our economy is in the crapper because American losts the PERCEIVED WEALTH we thought we had when the market pricing was inappropriately inflated and the prices of real estate was wildly out of align with how much money most of us make, too.
Hence the "monetary velocity" has crapped out (people aren't spending)
And note that savings (which was down to 0%!!!) is now up to about 5%!! (historically what American saved)
So a people who IMAGINED they had a lots more money in stocks and real estate, upon finding that they didn't really have all that much money, stopped spending and started saving.
And what happens in a CONSUMER-DRIVEN ECONOMY, when consumers stop buying stuff?
duh!
Folks, we NEED some inflation. What we need is MORE MONEY CIRCULATING IN THE SYSTEM, not less!
And that is WHY the government is borrowing money.
Basically, to prevent our economy from going into a economic anaphylatic shock.
Of course, in my opinion, the BLEEDING ARTERIAL WOUND that is FREE TRADE is going to continue to plague us.
American didn't just lose the industrial jobs it once had, America has created a system of trade policies and tax laws which insure that we will also NOT CREATE JOBS in future's industries, either.
This faith based belief in FREE TRADE is the major problem facing this nation.
We invent industries here, and then the moment they become viable, they go offshore to make the stuff we'll need.
But unemployed pAmerican do not make great consumers, folks.
We are screwing our working class to the benefit of the investor class, and as the investor class is (hopefully) now beginning to realize, they cannot SELL to people who don't have JOBS!
duh!
We have slowly been putting ourselves into this bind by opening one market after the other to foreigh imports.
And we cannot just close the borders now, because we do EXPORT and the trade war that would ensuew would screw the entire world, us included.
But we can slowly and surely start initiating a FAIR TRADE policy to insure that Americans can work too.
And, if China doesn't want to end up holding a trillion dollars in worthless bonds, they're going to WANT to work WITH US to see to it that the trade imbalance that they have enjoyed tilts back toward the USA somewhat.
There is NO FREE LLUNCH in economics.
There is no SIMPLE SOLUTION to these problems.
There are difficult things to balance to insure that we do not DISRUPT our economy and the economies of our trade partners, too.
But the time when AMERICAN THE WEALTHY NATION can just give away the farm to other nations is past.
America is NOT a wealthy nation, right now.
We are the world's largest DEBTOR nation.
If we do not invest in AMERICAN INDUSTRY, then inflation is only a small part of the problem we're going to be facing.
Because a recently empoverished well armed people who think they are not peasants and slaves are easily driven into very unpleasant modes of thinking.
The economic destruction of Germany gave us Hitler.
Now imagine what wierdness the AMERICANS can come up with if ENOUGH OF US FIND THAT WE HAVE NOTHING TO LOSE!
Hmm...then we should have had a point in time where we have been circulating this much money right?