You realize that America can inflate its way out of debt, right?

[LJ_Reloaded]

We've done it before.

Go far enough and China will utterly drop its dollar peg and America's exports will skyrocket.

 

[shoulderblade]

An export boom is "shovel ready" ?

 

[Benedict_Arnold]

I fucking hope so. Because we hang around you like a rat at a bbq.

 

[LadyFairfax]

Pure idiocy.

 

[Benedict_Arnold]

I dunno over the years we've had a few titbits, drank some booze and seen a few sites. Thanks.

 

[Bob Waters]

We've done it before.

Go far enough and China will utterly drop its dollar peg and America's exports will skyrocket.

Sure, the same way Wiemar Germany paid of it's reparations. Look how well that turned out for them

 

[great lover]

You realize that's never going to work. China needs dollars too.

 

[patrick1]

I do think references to the Weimar Republic are spurious here. They had rampant out of control inflation. Nobody is proposing that.

Here's an interesting article about 'Why inflation could be good for us'. It's just a blog but it's interesting. http://articles.moneycentral.msn.com/Investing/MutualFunds/why-inflation-would-be-good-for-us.aspx

<< There's another way, but it involves a question we may not want to ask: Could high inflation be good for us?

It might be just what we need, according to one line of thinking on Wall Street and in Washington these days. But it means inviting something that's been economic enemy No. 1 over the past 30 years.>>

Patrick

 

[GiaCat]

An export boom is "shovel ready" ?

we have been shoveled many things for the past ten years.

 

[shoulderblade]

we have been shoveled many things for the past ten years.

Exactly my point. Even if external conditions were suddenly inproved is the machinery in place for a dramatic recovery in the short term? Say 10 Years.

Does not look like it to me.

 

[LJ_Reloaded]

Sure, the same way Wiemar Germany paid of it's reparations. Look how well that turned out for them

You forget history. America inflated its way out of debt after World War II. We didn't become a Weimar Republic.

 

[atmas]

You forget history. America inflated its way out of debt after World War II. We didn't become a Weimar Republic.

But no one else owned our debt. Today the Chinese do. And in other news there already is a great deal of movement to drop the US dollar as the default international currency. And when that happens the economic crisis of the last few years will seem like finger painting.
And how to accelerate this?
Devalue the currency. QE one, QE two.

 

[HAL_9000]

Debt is relative.

I owe you 20 grand, I have a problem.

I owe you 20 million, you have a problem.

 

[LJ_Reloaded]

But no one else owned our debt. Today the Chinese do. And in other news there already is a great deal of movement to drop the US dollar as the default international currency. And when that happens the economic crisis of the last few years will seem like finger painting.

You're right that there'll be an economic crisis - it'll be a Chinese economic crisis, much more than an American one. China has not dropped the dollar particularly because they don't want to lose the US as an export market. We're their biggest customer.

Americans will be leaving the unemployment line to take customer service calls from India and building cars for Mexico. It's suck-ass work but when you're one of millions who haven't been able to find work for two years... it's WORK you didn't have before.

If our currency devalues even China's sterilization accounts won't help them - they'll be outsourcing to us.

And how to accelerate this?
Devalue the currency. QE one, QE two.

Quantative Easing. Just another word for competitive devaluation!

 

[shoulderblade]

China has not dropped the dollar particularly because they don't want to lose the US as an export market. We're their biggest customer.

Actually I think the EU is their biggest customer, but that's looking a little like a shaky prospect right now anyway.

A reason they could have to hold the US Dollar that if they sold it might push down the value of Dollar and thus reduce the value of their remaining holdings.

 

[JAMESBJOHNSON]

Inflation does 3 things: It cheats lendors, it reduces lending, and it increases the interest you pay for loans. During Carters term mortgage interest rates went to 20% and the government paid around 13% interest on savings bonds. Today the interest on savings bonds is 6/10ths of one percent.

 

[patrick1]

You're right that there'll be an economic crisis - it'll be a Chinese economic crisis, much more than an American one. China has not dropped the dollar particularly because they don't want to lose the US as an export market. We're their biggest customer.

[snip]

If our currency devalues even China's sterilization accounts won't help them - they'll be outsourcing to us.

!

Back in the 40's Keynes and Schumacher tried to persuade the international community to adopt the 'bancor' as currency. http://en.wikipedia.org/wiki/Bancor

The USA vetoed the idea at Bretton Woods but the idea has been circulating again, and supported by the Chinese.

I'm not entirely sure the US dollar being the main unit of international currency isn't as much of a curse as a blessing.

Patrick

 

[LJ_Reloaded]

I'm not entirely sure the US dollar being the main unit of international currency isn't as much of a curse as a blessing.

Patrick

Tell that to the millions of American workers who have lost their jobs to Mexico, China and India. They lose their jobs because the US dollar is so strong and this exacerbates the cheapness of foreign labor.

We have to get the dollar down in order for American jobs to come back.

 

[oggbashan]

It isn't working too well for the UK.

The pound is being devalued frequently although the current PC term is 'quantitative easing' = printing more money.

We have to pay more pounds for our imports because the pound is worth less than it was, and we rely on importing food and fuel.

The cost of raw materials for our manufacturing industries increases with devaluation. Yes, we should be able to sell the finished product at a lower price because the pound is worth less, but the profit margin is eroded, or the increased cost of the materials pushes the final product price up.

Despite the Euro crisis, the pound is worth less against the Euro than it was a couple of years ago, because while the Euro hasn't devalued, the pound has.

However, I only have to cross the Channel to France to see that basic food prices are far higher over there than in the UK, with a couple of exceptions such as bread (price artificially constrained in France) and wine (higher taxes on cheap wine in the UK). Several years ago we used to be able to do the monthly grocery shop in France and save money even allowing for the cost of the ferry crossing. Not any more. I'd pay about 20-30% more for the groceries in France. Now French people are crossing to the UK to stock up on many grocery products and also on cheap clothes.

Last year I walked around the shops of a suburb of Paris, admittedly an expensive suburb, but the clothing prices were horrific. I can buy a basic pair of jeans for £4 - £8. Their 'cheap' jeans were the equivalent of £40-60.

 

[4est_4est_Gump]

You forget history. America inflated its way out of debt after World War II. We didn't become a Weimar Republic.

We were the only manufacturing base left intact.

This statement does not stand upon itself or the facts because you do not examine what would have happened with no inflation.

Plus "exports" are not a zero-sum game, nor a goal to work towards as inflation is a net negative to buying power and hurts the middle class more than any other class because wages always lag cost.

Your economic acumen is severely retarded by your sources which fall prey to the Fallacies of the Seen (Bastiat, Mises, Rothbard, Hazlitt).

Read Mommsen of the result of Roman inflations.

 

[4est_4est_Gump]

Tell that to the millions of American workers who have lost their jobs to Mexico, China and India. They lose their jobs because the US dollar is so strong and this exacerbates the cheapness of foreign labor.

We have to get the dollar down in order for American jobs to come back.

No, the lost those jobs because they prefer to buy cheap goods in order to stretch their dollar. It also implies more Capital to buy additional American gods which improve the quality of their life and create even more jobs. As we create more jobs overseas and they accumulate Capital and dollars, those dollars must be redeemed somewhere and that somewhere is the United States.

Economics in One Lesson Henry Hazlitt

Try it instead of whatever Socialist-Communist comic book is currently teaching you economics.

 

[4est_4est_Gump]

Inflation does 3 things: It cheats lendors, it reduces lending, and it increases the interest you pay for loans. During Carters term mortgage interest rates went to 20% and the government paid around 13% interest on savings bonds. Today the interest on savings bonds is 6/10ths of one percent.

I remember those years...

 

[4est_4est_Gump]

PS - The Chinese Economic Miracle which seems to have had a real effect upon a lot of people like Andy Stern and LT, is the typical centrally-controlled government illusion, much as Duranty's beloved Soviet Union where we say "Man, if we were only like them, look at all the high-sped rail they are building," and then we ignore the fact that those trains have to travel the normal speeds because they materials that went in to them were substandard and they fly off the rails at high speed.

Then there was the recent unexpected collapse of the roof of the new, marvelous "Olympic" airport in Beijing...

LT, if Communism appeals so much to you,

MOVE!

 

[JAMESBJOHNSON]

No, the lost those jobs because they prefer to buy cheap goods in order to stretch their dollar. It also implies more Capital to buy additional American gods which improve the quality of their life and create even more jobs. As we create more jobs overseas and they accumulate Capital and dollars, those dollars must be redeemed somewhere and that somewhere is the United States.

Economics in One Lesson Henry Hazlitt

Try it instead of whatever Socialist-Communist comic book is currently teaching you economics.

Good book. Its helping me get my mind right.

 

[4est_4est_Gump]

It brings Bastiat into the 20th Century.

Then adds a little gravy for the 21st Century...