Are Headed Toward Hyperinflation?
John A. Quayle
blueoval57 at VERIZON.NET
Mon May 25 16:34:39 MDT 2009
>John A. Quayle wrote:
>>*/[It happened during the Weimar Republic and some say it could happen
>>here, too. Fact is that we cannot possibly spend our way out from under
>>mounting deficits - no matter whether we flood the system with worthless
>>cash or continue to borrow from our enemy (China). - JAQ:]
>>At 09:52 AM 5/25/2009, Ernie Lane wrote:
>I read an article the other day that said that deficit spending is OK, if
>not called for, as long as the deficit is below 4% of GDP. Now, I don't
>know what the "limit" is, but obama is moving us in the direction of
>annual deficits of more than 10% of GDP.
You'll not find a "consensus" on limits, Ernie. No two Economists
generally agree on much............
>I think that deficits are fine, as long as they are of reasonable size.
>And one thing you don't hear much about is that these huge deficits are
>going to put us in the area of a total government debt of more than 100%
>of GDP, and I don't think that's survivable.
Absolutely correct. Just look at what Japan did during the 1990s,
when they outstripped GDP, spending 100-trillion yen. We haven't even
approached a hundred trillion dollars, but then, Japan should sever as a
beacon to avoid danger.
>At least when the annual deficits are small, the economy can grow faster
>than those deficits, so the total debt never overtakes GDP. A declining
>economy, as we are in now, can absorb reasonable deficits for a year or
>two, and eventually make that surplus (economic growth over deficit) up.
>But obama's deficits, so much so fast, will hobble the economy forever --
>hyperinflation being just one thing.
Hyperinflation is a disease which cannot be cured without total
>You can already see the future in two things:
>- The rapidly rising oil price.
It's going back up just as fast as it came down.........twenty or
thirty cents a clip.
>There are also other factors at play, but the oil suppliers denominate in
>dollars, which they see as a declining asset, so they _have to_ raise the
>price. - S&P recently revised its outlook for the British Pound -- they
>didn't cut its rating yet, but are poised to -- because their overall
>government debt is at or near GDP. That's also where we are. They are
>going to be extremely reluctant to do or say anything about our situation,
>but I think that eventually, they will be forced to.
Bottomline is we're in trouble.
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