Is high inflation coming after this crisis??
- Thread starter jueco2005
- Start date
Japan on the brink of deflation:
http://www.forbes.com/feeds/reuters...T371938_RTRIDST_0_JAPAN-ECONOMY-UPDATE-2.html
+-*/ Math_Wiz
http://www.forbes.com/feeds/reuters...T371938_RTRIDST_0_JAPAN-ECONOMY-UPDATE-2.html
+-*/ Math_Wiz
The Obamanites are making so much hay out of the fear of depression that they won't know when to quit printing money. When credit unlocks, it will be a surprise to them and inflation will be upon us suddenly. It will take a while for them to reign it in, as if they want to... how can they have their unfunded liabilities without inflation?
japan didn't have to worry about failed auctions. their society saves money.
we don't save. if one of our bond auctions fails during our multi trillion dollar borrowing spree, we are <s>screwed</s> going to have much larger inflation than we ever thought possible.
and to top it off, we won't even have any control over the whole thing. we'll be sitting on pins and needles at every auction to see whether <s>our commie overlords</s> the chinese want to fund our bailouts and our other noble intentions.
That was true 1990 (Japan) and 2005 (US). Not anymore.
http://ftalphaville.ft.com/blog/2009/03/26/54028/us-and-japanese-savings-the-quiet-reversal/
nice article.
however, it doesn't refute my point that japan can fund their debt internally and we can't. the article states plainly that they have a huge surplus of savings with which they can use to continue to fund their debt, even if their savings rate is now lower. it tries to lead us to believe that america's newfound savings will be large enough to fund our deficits.
the two hundred billion dollars in additional savings they mention certainly won't cover nine trillion over the next several years, though. if they wish to believe that our debt bubble can go on forever, that's their perogative, i suppose. I don't.
What if the US savings rate is not just going up cyclically, what if this is a secular change?
If this is the case - like after the Great Depression - then even just a US savings rate going back to the 70s levels of 8% would make the US Treasury way less dependent on China and other foreign nations as a buyers.
If this is the case - like after the Great Depression - then even just a US savings rate going back to the 70s levels of 8% would make the US Treasury way less dependent on China and other foreign nations as a buyers.
