What does the 'US is over and will have to print money' crowd has to say about this?

[Daal]

Quote from daddyeaux:

daal

the summary of your link discusses debt more than equity....and the compounded debt numbers are significant.

net worth and net wealth are different in my way of looking at it...

whenever you see "seasonal adjustment" in a gov. document..beware

household debt is a measure of how we're doing over the long haul...and we're living off of a credit card

If I show you a company that is increasing its debt every year(and getting 'deep into debt') but increases its total value beyond its debt you dont think thats a good company?

And to whoever mentioned money supply and inflation,well that works both ways.
It increases both nominal rate of increase in assets AND in rate of increase in debt, cuz you need to borrow more(and pay higher interest) in a inflated world.

It does make the total assets have a higher nominal number while the total debt stays the same but thats not an argument to say the US is doomed, its an argument to say the bondholders might not be getting a good deal, I say let the chinese buy all the bonds in the world, its their problem

 

[Hydroblunt]

Quote from Daal:

If I show you a company that is increasing its debt every year(and getting 'deep into debt') but increases its total value beyond its debt you dont think thats a good company?

No because their debt stays constant while the "value" is subjective and can quickly decrease. So it's a company that is reliant on increasing debt to grow value. Hey, are we talking about a company or the real estate bubble?

 

[IanMacQuaide]

"did their populations suffer wealth destruction at the hands of government liars and thieves?"

That sure does sound familiar....

 

[Daal]

Quote from Hydroblunt:

No because their debt stays constant while the "value" is subjective and can quickly decrease.

It might be subjective and you might not agree that there was a 'real' increase in value(specially if your in the 10% inflation crowd) and thats fine but what matters is the company will NOT go bankrupt if the trend keeps going and thats what matters as far as the US is concerned.

If these trends in net worth continue(its pretty damn hard not to since it took a stock market bubble 9/11 and corporate scandals to make it go down for a while) the US cant go bankrupt.

The only 'default' will be on the people that think they will get a lot of money from SS or free prescription drugs,etc
I dont think changes will be made on these systems soon but when the budget deficits starts to run at one trillion a year whoever is the current president will have no choice and he will have an good excuse too

 

[thriftybob]

You can only increase that money supply as much as you have willing lenders and credit worthy borrowers that want to borrow more. The final alternative, lacking either, is to just print.

One of them will occur eventually. History may not repeat, but it will likely rhyme.

 

[daddyeaux]

for someone in the debt hole, devaluation is their only hope since it becomes easier to earn devalued dollars as inflation will bail them out in nominal terms.

that's what the US is counting on, and hoping the general public is too stupid to figure it out...and ftom what I've seen from the public school graduates, they'll likely get away with it.....

where do you draw the line? when gas is $150 per tank?

 

[Steve_IB]

Quote from Mvic:

My own solution to the risk of the standard of living dropping substantially in the US is to set up a high style life in a place where the standard of living is rising (Shanghai) while it is still cheap to do so. If things goes the way the doom and glooomers predict I will be set nicely in Shangahi if not then I will be able to live at least a 1/3 of the year quite happily in the US. Spain is my safety in case the US goes down the tubes and China implodes.

High life in Shanghai? But not quality life. Say goodbye to blue sky's and the outdoor life. You'll have to jump on a train for a half hour or so, just to go find a patch of grass. It's also not as cheap as you think if you want to live a "western lifestyle" in Shanghai.

 

[dtan1e]

Quote from Steve_IB:

High life in Shanghai? But not quality life. Say goodbye to blue sky's and the outdoor life. You'll have to jump on a train for a half hour or so, just to go find a patch of grass. It's also not as cheap as you think if you want to live a "western lifestyle" in Shanghai.

y, the property price in shanghai is even higher than in hongkong