inflation

Post Reply
Vander
Posts: 758
Joined: Thu Jan 05, 2006 6:00 pm

inflation

Post by Vander » Thu Oct 08, 2009 6:23 am

I have talked about this going back 3 years or more with a friend of mine. Long before the "crisis" was apparent. We believe, no proof of course, that the feds solution of last resort is inflate their way out. I know they don't want too. I'm sure they understand the consiquences, but if the pols can't control spending, and you know they can't, the fed has no choice in dire circumstances. The national gov is not constrained by the rules Calf must play by. They are rapidly expanding gov not making it smaller. No layoffs there. Now they want nat. Health care and anybody that thinks that free health care system won't cost more than we pay today and I mean WAY more they're kidding themselves. I hope I'm wrong as I've said before, but as rates eventually rise, think of how much interest we'll have to pay on the debt. They're running deficits like never before and we now owe trillions with even the best case scenario of adding a few more trillion. Soon we won't be able to afford anything other then paying the interest on the debt. The only way out in that case is make the debt worth less by flooding the system with $'s making each one less in value. Then you can pay the debt. Bad news for standard of living here. You might see all those factory jobs come back though as we become the low cost manufacturer. Those that have been hoping for those jobs to come back might regret getting their wish. As for the stock market the prevailing winds are for it to continue up. For how much longer, I don't know. The higher it goes the worse the eventual drop will likely be. I would not be a buyer here and would look for opportunities to lighten up and wait for better opportunities later. Think commodities, stocks and bonds in commodity rich countries. Exporters here in the U.S. and stay away from long term bonds. All this could go the opposite direction in a nasty correction. commodities could go down again, treasuries could rally again, and there could be a rush to the $. This would be a great opportunity to get into the previous stated positions. All this again is just my opinion. Could be wrong and often am. Just ask my wife.

TOXIC ASSETS
Posts: 764
Joined: Sat Feb 07, 2009 6:00 pm

inflation

Post by TOXIC ASSETS » Sat Oct 17, 2009 11:52 pm

I agree completely with this analysis. If we can't pay the debt now, what is going to happen when all of the baby boomers retire and Social Security is then running a deficit. Plus we have ObanmaCare coming down the pike, in some form. Pretty obvious to me where we are heading. Sad thing is, it's not only the Democrats to blame as George W Bush was one of the biggest spenders we've ever seen. As for what to do about it, I have only one comment: BUY GOLD.

Post Reply