US economic crisis:the road to hyperinflation

"There's no silver bullet," Paulson said, "but, there's plenty of evidence that if you give people money quickly, they will spend it."

Yet the Republican proposal favors a tax rebate, meaning that only those who actually paid taxes would get a refund. That means a family of four with an annual income of $24,000 would receive nothing and only those with annual income of over $100,000 would get the full $800 rebate per taxpayer, or $1,600 for joint return households.

Further, against a total US consumer debt (which includes installment debt, but not home mortgage debt) of $2.46 trillion in June 2007, which came to $19,220 per tax payer, the Bush rebate of $800 would not be much relief even in the short term. In 2007, US households owed an average of $112,043 for mortgages, car loans, credit cards and all other debt combined. Outstanding credit default swaps is around $45 trillion, which is three times larger than US GDP of $15 trillion and 3,000 times larger than the Bush relief plan of $150 billion.
atimes.com...

Money is not wealth. It is only a measurement of wealth. A given amount of money, qualified by the value of money as expressed in its purchasing power, represents an account of wealth at a given point in time in an operating market. Given a fixed amount of wealth, the value of money is inversely proportional to the amount of money the asset commands: the higher the asset price in money terms, the less valuable the money. When debt pushes asset prices up, it in effect pushes the value of money down in terms of purchasing power. In an inflationary environment, when prices are kept high by excess liquidity, monetized wealth stored in the underlying asset actually shrinks. This is the reason why hyperinflation destroys monetized wealth

with Bush's crazy economic and military policies this was bound to happen

the American Fed helpless in its own crisis

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[edit on 1/28/2008 by Gools]


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[edit on 1/28/2008 by kinglizard]

Those that view money as a measure of wealth have a skewed perspective of what wealth really is, I know many poor men who's lives are richer than the wealthiest man as measured by money so I guess it is a matter of perspective as to how rich or poor someone is my wife and I say it all the time it wouldn't matter if we had no money we would still be wealthy in our book..


Respectfully
GEO

[edit on 1/28/2008 by geocom]

Originally posted by geocom
Those that view money as a measure of wealth have a skewed perspective of what wealth really is, I know many poor men who's lives are richer than the wealthiest man as measured by money so I guess it is a matter of perspective as to how rich or poor someone is my wife and I say it all the time it wouldn't matter if we had no money we would still be wealthy in our book..


Respectfully
GEO

[edit on 1/28/2008 by geocom]

I know many poor men who's lives are richer than the wealthiest man as measured by money

how ?? by taking more mortagages and debts??

Ya....not exactly seeing how this article is talking about Hyperinflation at all. Our economy isn't "out of control" in the way the money is being devalued. It's not like this is Germany in 1923, Brazil late 80's early 90's or even recently in Zimbabwe. To cause Hyperinflation, you'd have to rapidly pump money into the system; we are not doing that. Inflation is bound to occur, it's almost naturual. We don't have to get paid at lunch so that we can go out and get something while we have enough money, where if we don't we end up with a piece of paper thats better used for toilet paper like in Zimbabwe. True, adding to the monetary base can cause Hyperinflation, however, the article you've provided does not support your cause. Besides, the Fed, as much as I hate it, can alway raise rates again and take some money out of the money supply to help ease inflation.

I think some folks still see the stimulus proposal as a gift to the downtrodden from a benevolent government...as if the treasury can afford it.

Sometimes when a car runs completely-out of gas, it's necessary to pour fuel directly into the engine through the carburetor. The monetary/credit system is frozen mid-stream. When a gubmn't has to rely on it's populace to feed cash directly into the economic engine...quickly, that's kinda serious. The equivalent of an emergency adrenalin injection right through the breastplate.

[edit on 29-1-2008 by OBE1]

I'll say it again:

all behold the genius of Lou Dobbs --
whatever handouts we may or may not receive, will end up boosting the Chinese economy, where all the goods are made, and the US economy, where they aren't.

reply to post by buddhasystem


that was a funny one buddhasystem