HYPER inflation just around the corner? fed Is Paying Banks NOT To Lend 1.8 Trillion

I agree. But for economists, it's been the only way to get the government to open up their wallets in a significant way. I don't think they are encouraging war, they are just saying that is what would be needed to get us out of us this mess.

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When are we gonna lose our credibility?

 

That is the million dollar question... who knows? I am talking financially speaking as well because I think we have lost our credibility in other areas already.

 

I don't think we have lost any credibility when it comes to people with money throughout the world. I think the people that think we have lost credibility are just partisans who are playing politics. The United States is still the safest and most robust/stable economy in the entire world.

 

I think things change quickly all though I hope they never do. And in my comment I said I dont think we have lost financially credibility yet, we have lost it in other areas...

 

You appear to be the economics expert, so what do you think of my humble opinion?

I think the limit of debt would be when interest payments on the debt per year exceeds the country's budget revenue for the year. It seems to me that we can bond anything else that results in the deficit, but once the investors aren't getting their money there's going to be big problems.

I took a peek at the US Debt Clock, and that situation doesn't actually appear to be happening any time soon. The net interest on the debt, if I'm reading the correct line, is running backwards and it's only 12 digits long (billions) vs the US Federal Tax Revenue which is already at 13 digit places (trillions) and going up.

P.S. Oh It just occurred to me, and we might also reach the limit of debt if Congress doesn't raise the Debt Ceiling.

 

Ah, but consider what is actually produced during war. It's weaponry - things that explode or are otherwise only useful for the costly business of killing. Meanwhile, the nation starves. It was after WWII, for instance, and not during, that the US experienced an economic boom.

Anyway, what you said here is also an interesting tidbit to consider:

Problem with almost every country at some point and usually ends up being their demise is

Over population , not enough people working, and eventually not enough people spending because they have no money... thus the circle is broken and the country starts to fall.

This makes sense to me, but of course it leaves us wondering what we can do to correct it, if anything..

 

I think that the government having a wallet is getting us into this mess in the first place. They take a LOT from us to redistribute in often - dare I say typically? - stupid and inefficient ways. They also help cause the problems they mean to fix, such as the ever rising costs of higher education and health care, and of course the worst of all seems to be this continued taking away from productive people to give to the unproductive..

 

I would say technology is what's created with war ... Weapons being just 1 part . How to correct it , who ever figures that out is going to be a billionaire .

 

True, I should rephrase the question as what is the non-arbitrary limit of debt. Because the one thing that can determine how much debt we can have is Congress through it's ridiculous Debt Ceiling that is not attached to any type of real constraint whatsoever.

I personally do not worry about interest on the national debt simply because of the control the Fed has over it. There is no greater evidence of the power of the Fed than what we experienced the past 5 years. Through the Primary Dealers and their bond purchasing programs, they are able to completely target yields on treasuries from the short curve to the long curve. So, hypothetically, if our net interest expense exceeded our revenue, I would imagine the Fed would soak up all the treasuries in order to return most of that interest expense back to the Treasury.

 

It's a cycle, they might take "a LOT" from us, but that money comes right back in to our pockets. So even though they tax us, that money comes right back in to the system back in to our pockets as income, which they then "take a LOT" of.

Our real concerns however are what you say, the costs of education and health care are serious concerns since people are revenue constrained. However, the governments wallet is bottomless and it can spend whatever is necessary to help create sustainable economic growth.

 

I think about things that people buy, and I track very closely the prices of everything from cream of chicken soup to luxury homes along the Front Range of Colorado. I'm not sure why you would say that "inflation is more geared towards business owners, investors, (etc.)". Surely inflation is a rising water that lifts all boats, as they say. Thus, the current inflationary rise I have observed, while not a flood by any means, yet, is very measurable: YOY, the price of a can of cream of chicken soup is up 23% in one of our King Soopers supermarkets... and the price of a luxury home in the Cherry Creek suburb of Denver is up 20%.... But it's not just a Colorado phenom by any means... hell, the price on the shipping of a DVD movie from an independent Amazon Seller has gone up 25%. I doubt this troubles anybody in the banking sector who, thanks to Fed. Chairman Ben, are well-protected, completely "rescued", and as happy as pigs in ****. But we're all "consumers", and price increases surely affect us all, one way or the other....

 

Do you understand the consequences of your last statement? Do you understand what that would mean in real global terms? The Fed would simply buy all the treasuries! LOL. We are currently exporting our inflation to other nations and banks(This is why you see huge balances held with the Fed). I am not sure you can rely upon banks to continually eat inflation by holding onto epic excess reserves with The Fed in the event that no other countries will buy our bonds. Maybe you can and the entire charade can continue in perpetuity...I am not so sure and history is on my side.

 

What is this "us" you speak of? You really believe that the people and the government are one and the same? Can I goto the bank and withdraw from this massive pool of shared money? Of course not. Reality is that the money does not come back to "us" at all. There is no us. There is you...there is me...there is them. There is no us, never has been.

The governments wallet is far from bottomless. The laws of economics apply to the government just as they apply to you and me. The only difference is the government can control the flow of information a bit better than you or I, therefore delaying the inevitable....but the inevitable will come...make no mistake about that.

 

you don't have a treasury/mint that has the constitutional power to coin money and a central bank to regulate its value

you're very different from the government, personal & corporate finance aren't the same as public finance

 

did you notice the clock
http://www.usdebtclock.org/#
it moving fast on federal pensions, from all the past wars and veterans civilian pensions

you see we need a reboot on all this spending or the bottom will fall out soon

now compare it to back in the old days
http://www.usgovernmentspending.com/pensions_spending

 

It wastes a TON of money along the way, though. Why do we even have government doing all of this? We shouldn't need it to, seems to me. It's very anti-free market.

 

Yep true. That power is largely irrelevant though. The consequences of spending more money than you take in are the same regardless of the type of spending (public or private). Moral Hazard is the same no matter the source of its creation. The government is not special in that regard.

Not really. You would like people to believe that, and so would the government. The more people who believe the easier the charade becomes to continue. A cult of misinformation so to speak.

 

in 1902, horse and wagon was the basic mode of transportation

take a finance class and stop being so dishonest

oh please, can you collect taxes or issue currency? you're the one spreading misinformation

no wonder ron paul lost so miserably

Difference Between Private and Public Finance

 

yeah and they also had a budget,
View attachment sumbudg.pdf
http://oregonstate.edu/cla/polisci/faculty-research/sahr/sumbudg.pdf
much better then ousr and a sound money system.
as you can see pensions didnt start till after ww#1 http://www.usspending-101.com/spending_chart_1902_1926USk_14s1li111mcn_00f

 

I have actually taken quite a few classes on economics. How am I being dishonest?

Tell me please, what relevance does the power to do the above mentioned things have in our current discussion?

Yawn....boring attacks are boring.

 

Ya just got to love capitalism.

 

This is a pretty ignorant comment.

This has nothing to do with capitalism and everything to do with corruption and corporatism.

 

Think again before you label a comment ignorant. Without capitalism its a lot tougher to have corruption and corporatism.

 

No, but wingnuts have been predicting it for five years now.

 

Hahhahaha, this comment is actually more ignorant than your first.

Corruption is a trait inherent in human beings, whatever "ism" being practiced at the time has little effect on it. Corporatism is simply a consequence of corruption.