OK, so we print money like mad to cover the costs, and the dollar drops on the world market. Right? Isn't that the best way to do it? The bonds are in dollars. Not yen, euros, etc. If they force us to pay them off, they get less than they invested. No legal way to prevent us from just printing the money.
Am I wrong?
Ah yes, because rampant inflation is a great thing... So we print all this money, and crash our economy worse than any depression we have seen yet. Thats better than the gradual decline into socialism? What happens if they time this with other events to cause the most possible damage to our economy?
No, that's easy. Dundee, OR has some of the best wines in the world now. Just a little known secret. Oregon wines have become as good or better than California and French wines.
Cheese from the Tillamook Cheese factory in Tillamook, OR. It really is great stuff.
France may have us there, but then I don't give a damn about designer clothes. How many Americans do?
Now maybe I'm not understanding things, but can you explain to me how it affects our buying power of USA goods? I see it as only changing the value of our currency on the world market. Only imports should increase in price. Domestic items should remain the same. If I'm wrong, please tell me how.
Please, I'm all ears if I'm wrong.
What domestic items? We are a net importer. Our food is subsidized, so admittedly, that might not change a huge amount for production, but transportation costs will increase, so if inflation goes crazy, gas prices will sky rocket, thereby increasing food costs. And imports costing more will screw us...
If the dollar loses value, salaries won't react enough either, so for an extended period, people will be making the same amount, while their dollar gets less, not a good thing. People on fixed incomes will be screwed, namely old people. Old people also make up a fair percentage of population, and if they stop spending, our consumer driven society takes a hit. Large scale inflation is VERY bad.
Sorry, but I really think the good outweighs the bad. Yes, oil prices will rise, but we can tap more of our own reserves. Yes, imports will cost more, but we can open new factories and put people back to work. Sorry, but I see a bigger upside than downside to this.
Does it affect the price of domestic made goods, that have almost no transportation cost? If so, how? If it doesn't, then there is only a long term upside to the dollar losing ground to foreign currencies.
What domestic goods have no transportation costs? Our economy isn't built like that, we have industry that is centralized in a few cities, and then their goods are shipped across the country, there won't be anyway to build new factories, because no one will be loaning anything. Banks couldn't afford it, because they would lose money...
Internal changes are easier to control then sovereign countries, so forgive me if I'm more concerned about stuff that we have no control over, and confident that we can fix the stuff we can control...
I didn't say no cost, but little. I don't know transportation costs, but when you break it down per item, it's usually pretty small. So you add a penny to the cost of a can of corn. So what.
Wow... Such negative thinking. Things happen when necessary.
I only see the fixes in place by congress as harming us as a nation. I want to see the dollar drop at least 25% in value. It won't happen overnight, but it would make it cost effective to bring blue collar jobs back to America. I can stand a few years of pain to give my children a better future.
So "socialism" is bad, unless you wrap it in big guns and the flag.
That "Obama-nos" bumper sticker? Gold.
all praise the great lord barrack!
You don't shoot yourself in the foot to run faster.
We also don't need to stock factories full of people to produce things like the Chinese do.
We do need to produce things though. That means less spending on crap from overseas and more investment at home. You can do both those things without blowing your currency up.
More like the post-leftism of Europe and the cosmopolitans. Social democracy. Think Willy Brandt and Mitterand. We already resemble it more than somewhat in the degree power penetrates everyday life and commercial opportunities, and vice versa.Marxism here we come
Really? How. The free market does not work that way. We have a tax structure that is counterproductive to trade. We have the 2nd highest corporate income tax rates in the world. We cannot compete, because government represses us.
Please explain to me how we can compete.
Last edited by Wild Cobra; 07-24-2009 at 03:10 PM.
Whoever claims that going through a hyper inflationary cycle is a 'necessary evil' has absolutely no clue what it's like AND has not gone through one. It's not just transportation costs. We have come to rely almost exclusively on foreign manufacture of goods, which will become super expensive and the new cost will be passed down to the consumers.
And you can't simply think we're going to expand our manufacturing capacity overnight, especially on a economy in crisis. Example: Building a chip fab can take 1 to 2 years until it goes in online just for an average production output. What do you do in the meantime? Let the high tech industry in the nation die a slow death? The same industry that equips a lot of our military?
In a hyper inflationary cycle, basic things like milk costs 2x what it is now at the beginning of the month, and 20x by the end of the month. Salaries, as usual, are the last one to be adjusted. It almost always leads to riots and looting.
Then there's the problem that probably about half of the economies in the world back up their currency with the dollar, which is supposed to be a strong currency. If that's no longer the case, then you'll compound the problem because you're going to force them to go to euros or the like. And at that point you're relinquishing economic power that we've used as leverage to other nation(s).
Now, it might help the internal market in the long run, but the price is to basically stop being a super power.
I don't have time to look for it right now but there is a youtube video of Ron Paul going off on Bernanke about the inflation he will be creating and Bernanke actually responds with "Inflation is only an issue if they buy imported goods".
Please buy a clue.
I'm not talking about hyper inflation. If that occurs, it will be because of all of the current congress and president spending more and more money.
Just cause you aren't talking about it doesn't mean that it wouldn't be a very real situation that could occur if China made us repay our debts all at once, in an inopportune time for us.
First of all, they couldn't "make us pay all at once." These bonds have various time frames for redemption. I doubt China holds enough of our money to cause hyper inflation anyway.
This is how I understand it. If you have evidence to the contrary, please direct me to it. If we just printed money, and spent it in our own economy, that's inflation that can go out of control. That's what post WWI Germany did. To print money to put in the hands of a foreign government only changes the currency exchange rates, and the price of imports. It becomes a real slow process for that money to make back to our shores, where it will slowly make changes that we will keep up with. At the same time foreign goods are more expensive, businesses will bring jobs back here. Supply and demand of labor will bring wages back to living wage levels. Even flipping burgers will par better, and we will likely have people leaving the welfare roles.
You know what. It sure would help our economy and jobs is corporate tax rates were dramatically slashed, or eliminated. It would help more if we went to a consumption based tax and left the income tax system behind.
You don't have to request payment for bonds at once. It would certainly be within their rights to hold onto all the bonds until they are all due.
I still find it highly amusing that you fear the government that you can change more than you do the sovereign nation that you can't.
That's true, but that would be stupid. Let's say they wanted to do economic damage. What if we said, Ooops... We cannot pay you. Here's an IOU...
I don't fear them over money. I do have other concerns. To make such an assumption degrades the level of respect I have for you.
You still haven't told me how printing money and giving it to them hurts us. What are they going to do with it? How is it any better for them than the treasury notes? It does nothing till they start buying things. I guess they could build a large corporation here in America and call it Onmi Consumer Products. Now that would scare me.
Not saying you fear them over money. I'm just saying that We The People have control over our government, convince enough people that your views are right, and the government changes.
Convince enough people that China shouldn't wage an economic war with us, and watch China not give a .
I do fear our government. They are spending us into oblivion. I don't see how paying China will do any harm. You haven't explained yet how. As long as the money is in the world market, it just devalues our dollar. It would take probably as many years to come back into our economy as it did to build up that debt. The markets will adjust.
Sorry if you think I'm an ass about this, but you only offer fear. Describe to me precisely how it hurts. us. Stop with empty statements that have no basis in fact. If they do, school me.
I, and others, tried explaining how inflation caused by printing large amounts of money was bad. If you disagree, thats fine.
Here are some articles to read, see if they explain my point to your satisfaction.
http://www.pbs.org/moyers/journal/08.../profile3.html
http://www.lewrockwell.com/ryan/ryan38.html
I'll read them later. Rather long for me at this time of day. I got off a graveyard shift 7 hours ago, and I'm in serious need of rest now. I would appreciate if you summarize the important part. If I have time, I'll log on before I go to work tonight.
Oh... Printing large amounts of money would be bad in we directly infused into our economy. I agree with that. Once printed and given to a foreign nation, it cannot cause the same harm unless it can be infused in our economy fast. At least that's my understanding.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote
