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... I have read many times over from economist the last few months. It is the game plan of the U.S. govt. and Fed to get the dollar inflated tremendously at some point, so the debts of trillions will be paid off easily, because the dollar will be inflated.
Originally posted by jzbrown
I have to be honest here, I cant really blame china for doing this. Do I want them to, yes, and no. yes because then our idiots in government wont be able to keep screwing everyone, and no because it will affect our way of life badly.
Originally posted by Rockpuck
reply to post by questioningall
I have to admit, their request sounds entirely reasonable.. If your going to inflate the money supply with trillions of dollars, you should be paying more then 2% on a long term Tbill.
262 Billion = US monetary base as of September 2008 (minus dollars held abroad)
3,818 Billion = projected US monetary base in September 2009 (minus dollars held abroad)
3,818 Billion / 262 Billion = 15-Fold Increase in US monetary base
This is a staggering devaluation of the US currency! It means that for every dollar in America in September 2008, the fed is going to create fourteen more of them! Below is a rough sketch of what this Increase in US monetary base would look like:
Today’s figures signal deflation, or prolonged price declines, is the bigger danger, and underscores Fed Chairman Ben S. Bernanke’s call for inflation to remain “quite low for some time.” The Fed’s record injections of cash into the economy have spurred warnings from some economists, including central bank historian Allan Meltzer, that consumer prices will surge.
“The more slack there is in the system, the longer it will take for inflation to become a concern,” said Carl Riccadonna, a senior economist at Deutsche Bank Securities Inc. in New York. “Production data look terrible. Things do not look good and this means the dramatic pace of layoffs we’ve been seeing in manufacturing for the last several months is likely to continue.”
“We’re in a very deep global recession that’s going to hold prices down,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, who accurately forecast the drop in CPI. “Deflation is still something that’s a risk, though I don’t think we’ll get into a deflationary spiral.”
Some economists argue disinflation could lead to outright deflation, which erodes profits, makes debts harder to repay and delays purchases by consumers and companies. Others caution that in the longer term, the unprecedented fiscal stimulus and the Fed’s policy of buying more assets and pumping money into the financial system will reignite inflation.
Originally posted by Albertarocks if they [China] wanted to completely annilhilate the USA, they could do it in a heartbeat simply by announcing that they would be buying no more US treasuries...