I’m off to 7-11 for a big gulp honey, I’ll be back in 10 minutes or so.
So what happens when our economy recovers? Interest rate hikes…
From the vantage point of a holder of $776 billion in US IOUs (after selling $25 billion in June), the Chinese see the combination of these signs of an emerging recovery, along with huge deficits that extend as far ahead as the eye can see, and worry that the dollar is certain to deteriorate in value. They want Bernanke to follow the lead of his doctoral supervisor at Princeton, Stanley Fischer, now governor of the Bank of Israel (BoI), and begin to raise rates to head off inflation [KN – my emphasis].
Bernake seems a decent player trying to get a grip on a really bad set of cards dealt to him. I hope that once confirmed he will stand and LOUDLY on the soap box to get deficit spending down significantly. After all, if debt causes inflation, then what does more debt do?
But take heart, he won’t touch the rates while we are losing jobs. Its just AFTER you get your job back that your credit costs will rise.
September 1st, 2009 at 6:21 am
It’s not going to recover, ever. Our “Golden Age” is over and never coming back. Be thankful you had a little piece of it to enjoy. Wealth created will wither and disappear replaced by government script issued to favorites in tiny bundles and backed by immovable ingots of gold bullion. Mean, nasty people will rule the “serfs”. You could say that Kant was right and Locke was wrong about the nature of civilized man. By 2050 or so dictators will have killed another 500 million folks. Only mountain men will still be free if they can get some powder and led every spring and fall. Join them?
September 1st, 2009 at 7:09 am
It used to be that American drive/ingenuity would overcome obstacles. But with the government aiming at that viciously, I’m more sympathetic to your scenario that I’d like to be.
September 1st, 2009 at 3:11 pm
We already have government scrip, called greenbacks, Federal Reserve Notes, fiat money backed by the Federal Reserve. See them being made at the Bureau of Engraving and Printing on 14th St. We had them in the Golden Age, whichever period you mean after 1933.
But if you want a Golden Age, you’ll need fiat money because hard currency is simply too economically limiting. Countries ditched the gold standard for a reason.
As for despair that America will collapse, I’ve heard that tune for fifty years. It appeals to politicians running for office. It’s also popular as people get older, realize that they’re never going to get rich or famous, and look for rationalization for the end of their dream.
September 1st, 2009 at 3:41 pm
You’ve heard that before have you. Probably when Jimmy Carter was busy trashing the country. We pulled out of that dive.
Can we pull out of this one? I’m dubious. Oh it won’t be Mad Max, but that wasn’t what he was saying. Again, if commentators only read the postings rather than writing up responses to what wasn’t written.
And why is it so odd to think that dictators will have killed another 500 million? I think that quite likely. History, plus crazy Muslims, plus wmd make that a lowball estimate.