I Want the System to Collapse!

[Kassz007]

Quote from endsongs:

Any amount of sustained deflation might = economic doomsday. This is why the gov't is pulling out all the stops to create inflation. Believe it or not, there are millions of American businesses and households that have barely managed to survive the economic crisis so far without defaulting on anything. They want to maintain good credit so when things improve, they can take full advantage. If deflation causes those who are surviving, but on the edge, to start defaulting on their debts because of the increased relative servicing costs, then a chain reaction might happen to cause another depression. Not to say this will happen during the current recession, but the next recession, and yes people this is not the last recession the US will experience, will be harder to dig out from as so much was used to stop this one. IF we manage to avoid falling into a depression this time, it's very likely the next recession will lead to a depression.

Deflation must be avoided at all costs. Temporary deflation is OK but long term deflation is horrible. Nobody will spend money and the economy is stuck in pergatory perpetually.

Stagflation is also worrisome in the near future with the stimulus spending, but deflation is what the government is aiming to avoid currently.

 

[Kassz007]

Quote from hofficita:

You are either blind or dumb if you think the troubles in the credit markets are over, or if you believe that the government has done anything but delay the inevitable decline of the US economy.

It must be nice to have a crystal ball and know exactly how the governments policies will affect the future. I am quite envious.

 

[hairdresser]

Moderator: Please move this meaningless thread to "chit-chat".

 

[Scataphagos]

Quote from endsongs:

Scataphagos - I don't believe in deficit spending either. Federal gov't budgets should be balanced just like the states. I'm pointing out a possible scenario for economic collapse that the gov't seems to be working hard to avoid.

To the extent we understand the concept of "economic collapse"... is our acceptance of what the government TELLS us and we believe them.

What if collapse is really, "a relative handful go belly up.. but they're the WRONG people politically."

Can't have THAT! Make everyone pay so that the wrong people don't have to pay for their foolishness and mistakes.

 

[4XQs]

The system won't collapse, but I think organized crime unfortunately will be a growth sector. Look at Mexico now, apart from the swine flu - the problems they have with the drug cartels are insane.

I recommend Misha Glenny's latest book "McMafia" which goes into how various political and financial changes around the world triggered the rise of organized crime. The Balkans, India/Pakistan, Dubai, Eastern Europe/Russia. It's a good read.

 

[Kassz007]

Quote from Scataphagos:

I don't see deflation as the enemy. Not the enemy of the people, anyway. Deflation is merely a correction to inflation, and any deflation will end when prices reach "fair value".

We people could benefit mightily by a deflation. The government, on the other hand, sees deflation as the worst of all possible outcomes FOR THEM.... throws a monkey wrench into their "planned confiscation of assets through inflation" and shines light upon their profligate deficit spending.

It is actually INFLATION as the great evil... the destroyer of worlds.

You are way off. Deflation is terrible. Who will spend money to buy a car when it will be cheaper in a week, month, year? Who will buy a house when they know they can get it cheaper in a week, month, year? Spending in the economy comes to an absolute halt, with the exception of necessities. Nobody spends, businesses don't invest, etc etc the list goes on.

 

[Scataphagos]

Quote from Kassz007:

Deflation must be avoided at all costs. Temporary deflation is OK but long term deflation is horrible. Nobody will spend money and the economy is stuck in pergatory perpetually.

"Deflation must be avoided at all costs"... is what the government WANTS you to believe... it's just another in a lonnnng string of lies.

There is no such thing as "long term deflation"... no "perpetual purgatory"... spending would resume and the economy revive once "fair value" had been returned from inflated things.

 

[Scataphagos]

Quote from Kassz007:

You are way off. Deflation is terrible. Who will spend money to buy a car when it will be cheaper in a week, month, year? Who will buy a house when they know they can get it cheaper in a week, month, year? Spending in the economy comes to an absolute halt, with the exception of necessities. Nobody spends, businesses don't invest, etc etc the list goes on.

True. But it's not perpetual. Once fair value is returned, people would spend and buy.

 

[Kassz007]

Quote from Scataphagos:

True. But it's not perpetual. Once fair value is returned, people would spend and buy.

Maybe not perpetual but it could occur for a long enough time to completely cripple the economy. As they say, markets can remain irrational much longer than you can remain solvent. Maybe deflation would take prices MUCH lower than "fair value", then revert back to equilibrium. But during that time of deflation you will be crushed.

 

[PAPA ROACH]

Quote from hairdresser:

Moderator: Please move this meaningless thread to "chit-chat".

This is a relevant economic discussion, under the economics forum. Don't you have a perm to do?