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View Full Version : The only way the US can avert hyperinflation




socialize_me
10-13-2008, 11:03 PM
Given the data of projected M3 and how much of our debt is held by foreign governments, the continued expansion of these bailouts and welfare will surely exponentiate the money supply even further. The Federal Reserve keeps pushing new credit into the system of which is at a stand-still so its effects may be months or possibly years off.

However, if the Dollar continues to be destroyed and China de-pegs their currency, as well as other foreign currencies strengthening around the world, then we will import significantly less which is very ominous for a country that runs a $70 billion trade deficit a month. The flood of US Dollars into this country from foreigners will be immense which will result in hyperinflation in prices. The ONLY way I see hyperinflation can be averted is through a global central bank system. Most of our debt is held by foreign central banks. If those central banks decide to start unloading those dollars onto US soil and towards US assets, there will be hell for this country.

Basically, we are currently being done favors by foreign central banks. Of course if they were to do this, the US economy would be trashed and their industries would subsequently be crippled significantly; however, if the Dollar does weaken, the incentive for central banks to abandon us becomes greater. The only way to avert this is through some sort of new globally coordinated organization that would abolish or freeze the US Dollars held by foreign central banks to prevent those Dollars from coming home to roost.

josephadel_3
10-13-2008, 11:13 PM
Now you're thinking like a socialist! Welcome comrade!

celticsman7
10-13-2008, 11:14 PM
Well, if China de-pegs their currency, then oil will skyrocket. The demand that will come out of China for oil as a result of a strengthening yuan will be tremendous and will send oil high, perhaps $200 a barrel.

AJ Antimony
10-13-2008, 11:52 PM
Gold

enjerth
10-14-2008, 11:18 AM
I think that the US can avoid hyperinflation by castrating the Fed and ending income taxes.

acptulsa
10-14-2008, 11:29 AM
Debt has enslaved us to inflation. If we don't have inflation, we can't afford to even service the debt. So enslaved, we wind up enslaved to the monetary system (especially since so many businesses now run on short term loans) so they can hold us all hostage and shake us down for whatever they want, even $700-850 billion. And we can't refuse certain demands from the countries still willing to buy that debt, either, as we haven't kicked the defecit spending habit yet.

I'm all for renegotiating the interest rates on T-bills to a rate we can service even with sound currency and minting the contents of Ft. Knox, myself. Assuming Ft. Knox hasn't been looted...

...And living within our means.

jsgolfman
10-14-2008, 11:29 AM
I think that the US can avoid hyperinflation by castrating the Fed and ending income taxes.

If I may edit your comment, "castrate the Fed Board of Governors"

josephadel_3
10-14-2008, 11:43 AM
So what would happen to the economy short term, if tomorrow, Congress woke up and decided to end the Fed, immediately and return to sound money? Would the world explode?

acptulsa
10-14-2008, 11:45 AM
So what would happen to the economy short term, if tomorrow, Congress woke up and decided to end the Fed, immediately and return to sound money? Would the world explode?

As long as someone had a good plan for the changeover and anticipated all the potential rough spots that we'd encounter, it would be fine. As we saw with that damned bailout, however, Congress seldom does do anything this well.