Is america bankrupt as a country?

[trefoil]

Quote from luckybastard:

No, but that's because velocity is low, because banks don't trust anybody. They just sit on their money, regardless of how much the FED feeds them (which is Bernanke's big mistake in judgement of course). If trust is restored and all the money comes into circulation, THEN you'll get your inflation.

On another note: I personally think goldprice by itself is a much better indication of inflation than the CPI.

You're just repeating what I said. And yes, the goal of the Fed, eventually, is to get some inflation. The question is whether that will be hyperinflation. Given that they're increasing the supply of reserves by 600 billion, which is a trivial amount in the context of the US economy, I doubt it.

 

[luckybastard]

Quote from trefoil:
You're just repeating what I said.

Then I probably misunderstood your comment

And yes, the goal of the Fed, eventually, is to get some inflation. The question is whether that will be hyperinflation.

Also agreed. And I also I don't think there'll be HYPERinflation, however I wouldnt be surprised if inflation would become higher than 10%/year and I'm not talking about the CPI, since that's a totally useless number.

 

[syrre]

Quote from nutmeg:

All the easy money is gone in business via compliance, regulations, "do good stuff", etc. No biggie though, some of theses issues can be overcome.

What annoys me: Why do corps "invest" their profits in derivitives to enhance the bottom line, whereas in the past, profits were invested in the future of the company a la research, infrastructure, etc?

For example, one co I followed invested none of its profits improving distribution or employees (to name a couple of items), instead invested in oil and gas leases (totally unrelated to its core business) wtf? This wasn't a hedge, it was just too far out there. Point being if an owner doesn't invest in his own company, why should anyone else? F'd up business model, imo.

P.s. How did we end up where the profit margin is derived from the credit sales of the product and not from the mfg of the product itself, say auto's for example.

This! +1

 

[trefoil]

Quote from luckybastard:

Then I probably misunderstood your comment


Also agreed. And I also I don't think there'll be HYPERinflation, however I wouldnt be surprised if inflation would become higher than 10%/year and I'm not talking about the CPI, since that's a totally useless number.

Well, if we get 10% it wouldn't be based on QE2, but to something stupid they did or didn't do when output really does start ramping up bigtime.
This is where I get nervous: Bernanke, by some accounts, was the one that convinced Greenspan to knock rates all the way down when he was a member of the Fed board. I remember wondering what they knew that the rest of us didn't when they brought rates so low.
So, the man has a history. I'm hoping it doesn't repeat.

 

[deadbroke]

Quote from newguy05:

cannot be bankrupt if you can print your own money and other people want to use your money.

Yes you can go bankrupt because ...

MONEY is an idea backed by confidence!

Simple, simple, simple.

 

[zdreg]

Quote from trefoil:

Velocity is a function of how much the money out there is really needed. That's a function of economic activity.
Economic activity does not depend on money supply; it depends solely on confidence.
Precisely no one is thinking about money supply, either in good or bad times. If people want money badly enough (they're confident), and banks think they're solvent enough (this varies: in good times, solvency is a fig leaf; in bad times, you practically need to have an underground vault of gold before you can get your hands on any additional money. In other words, the banks need to have confidence as well) banks will create money for them, regardless of what the Fed does. In bad times, banks will sit on their hands no matter what the Fed does.
Human beings and how they feel drive this: if confidence is in the toilet, velocity will be low, and money supply will have only a very limited effect.
Like I said: money supply shot up during the crisis. All that did was cover for all the deleveraging. Do you see any hyperinflation from all that money creation? If you're honest, you know what the answer is.

use this metaphor. think of money as trees in a forest. the more trees there are in a forest the greater the fire once the fire starts, no matter what the reason is.

 

[bearice]

Quote from zdreg:

use this metaphor. think of money as trees in a forest. the more trees there are in a forest the greater the fire once the fire starts, no matter what the reason is.

Excellent post.

 

[vk60546]

Quote from Larson:

Bush wasted time and resources and kept the focus off of our mfg. decline. No president has presided over a larger decline in the dollar during those 8 miserable years.

I think most people would rather have a George Bush economy vs. Obama.

I remember MSM tried to convince us that the economy is really really bad under W, now they are telling us that that things are much better.

Also, what are you talking about when you complain about the 'decline of the dollar'?

Which currency would you rather have? The Euro?

 

[luckybastard]

Quote from vk60546:

I think most people would rather have a George Bush economy vs. Obama.

Tough call, between a complete idiot and someone with extremely bad idea's.

 

[zdreg]

Quote from vk60546:

I think most people would rather have a George Bush economy vs. Obama.

I remember MSM tried to convince us that the economy is really really bad under W, now they are telling us that that things are much better.

Also, what are you talking about when you complain about the 'decline of the dollar'?

Which currency would you rather have? The Euro?

"Which currency would you rather have? The Euro?" this is the logic if the husband says the soup is too hot. the wife responds do u want it cold?

there are no other currencies in the world to your way of thinking.
how about the canadian dollar?