USA Debt Crisis

[flemming]

What debt crisis?

 

[flemming]

How can you have a debt crisis when you own the press? Just keep printing money. I'm sure this story won't end badly.

 

[flemming]

How can humans (even smart ones like Uncle Ben) repeat the same mistakes over and over again. But I guess Uncle Ben told us the reason the depression got so bad was because policy response wasn't strong enough. Doesn't anyone read history and realize in takes at least a decade or two to recover from financial bubbles?

 

[enragedcow]

How can you have a debt crisis when you own the press? Just keep printing money. I'm sure this story won't end badly.

pardon?

quantitative easing decreases public debt? can i have your economy, it seems to work a bit more simply than mine does.

Certainly printing money results in seigniorage but that's no way to get rid of debt responsibly.

i better add something to the thread instead of correcting people's wrongonomics:

as i posted somewhere above car manufacturers are planning to increase production, this is likely to be a result of the low US dollar (US manufacturers now receive more goods for their exports - if you want to argue this point please read an article on real exchange rates and you'll see my logic) or perhaps it's a result of foreign economy's growing.

whatever the mechanism the result should be an increase in net exports which means the US should grow.

i think the US economy will go through a period of slow growth maybe shrink a bit but i doubt it will completely collapse, simply put the US has a HUGE agriculture sector and consumer durables that it can export, the economy will be fine.

contrast this to places such as greece, what does greece export? (apart from tourism) that's why a debt crisis is soooo much more damaging for the greek economy

 

[new_trader]

i think the US economy will go through a period of slow growth maybe shrink a bit but i doubt it will completely collapse, simply put the US has a HUGE agriculture sector and consumer durables that it can export, the economy will be fine.

I’m not sure you have any idea of the enormity of the US debt problem and its liabilities.

This is just a small example of what they face:

And Now The U.S. Postal Service Is About To Go Belly Up? | Daily Ticker - Yahoo! Finance

 

[YouAreNotFree]

pardon?

quantitative easing decreases public debt? can i have your economy, it seems to work a bit more simply than mine does.

Certainly printing money results in seigniorage but that's no way to get rid of debt responsibly.

i better add something to the thread instead of correcting people's wrongonomics:

as i posted somewhere above car manufacturers are planning to increase production, this is likely to be a result of the low US dollar (US manufacturers now receive more goods for their exports - if you want to argue this point please read an article on real exchange rates and you'll see my logic) or perhaps it's a result of foreign economy's growing.

whatever the mechanism the result should be an increase in net exports which means the US should grow.

i think the US economy will go through a period of slow growth maybe shrink a bit but i doubt it will completely collapse, simply put the US has a HUGE agriculture sector and consumer durables that it can export, the economy will be fine.

contrast this to places such as greece, what does greece export? (apart from tourism) that's why a debt crisis is soooo much more damaging for the greek economy

A weak dollar means they receive less for their imports. Getting paid in a debased currency isn't much good because you only export to import and obviously you can't import as much stuff with a weak currency. Despite recent continued Dollar weakness their trade deficit has continued to grow, that isn't surprising to me but the accepted thinking is exports will boom and reduce it, which is just plain wrong.

 

[new_trader]

A weak dollar means they receive less for their imports. Getting paid in a debased currency isn't much good because you only export to import and obviously you can't import as much stuff with a weak currency. Despite recent continued Dollar weakness their trade deficit has continued to grow, that isn't surprising to me but the accepted thinking is exports will boom and reduce it, which is just plain wrong.

I think he means they get more 'revenue' because they increase their total exports. But as you rightly say, as the dollar weakens they pay more for the raw materials used to manufacture their exports and if wages rise through inflationary pressure then production costs rise. The debasement policy is insane, especially when everyone starts playing the game.

 

[scose-no-doubt]

A weak dollar means they receive less for their imports. Getting paid in a debased currency isn't much good because you only export to import and obviously you can't import as much stuff with a weak currency.

What does it matter if your imports are crock of sh*t tidbits that nobody needs? Yuan peg will leave the bulk of the import component of production costs remaining relative.

I think he means they get more 'revenue' because they increase their total exports. But as you rightly say, as the dollar weakens they pay more for the raw materials used to manufacture their exports and if wages rise through inflationary pressure then production costs rise. The debasement policy is insane, especially when everyone starts playing the game.

Which raw materials would that be? The ones that they grow or acquire through pillage?

Inflationary pressure on US wages? Coming from where? Rising house prices? High interest rates? Gasoline price hike?

Simple linear economic formulae don't work in the real world.

 

[new_trader]

Inflationary pressure on US wages? Coming from where? Rising house prices? High interest rates? Gasoline price hike?

Err..from debasement. You don't honestly believe government inflation figures do you? The cost of living in the US is rising rapidly, shadow stats currenty have inflation in the US at around 11% p.a.

Alternate Inflation Charts

Debasement impoverishes the majority for the (ostensible) sake of a few exporters...it's madness!

 

[new_trader]

Ron Paul is America's last best hope. He is the GOLD STANDARD in Politics and economics. He understands the importance of limited Government and SOUND MONEY, just like the Founding fathers did.

Ron Paul at the Palmetto Freedom Forum in South Carolina - YouTube

 

[scose-no-doubt]

Err..from debasement. You don't honestly believe government inflation figures do you? The cost of living in the US is rising rapidly, shadow stats currenty have inflation in the US at around 11% p.a.

Alternate Inflation Charts

Debasement impoverishes the majority for the (ostensible) sake of a few exporters...it's madness!

That chart would suggest that COL has increased about 321% since 2000

 

[new_trader]

That chart would suggest that COL has increased about 321% since 2000

Really!?:-0

What has the price of gold done since 2000?

 

[scose-no-doubt]

Debasement impoverishes the majority for the (ostensible) sake of a few exporters...it's madness!

So you think that this "debasement" is for the sake of exporters? What about reducing reliance on imports and turning demand inwards to promote growth?

 

[scose-no-doubt]

Really!?:-0

What has the price of gold done since 2000?

We're talking about US living costs, mate. Lets put the gold fetish aside for a while eh?

 

[new_trader]

So you think that this "debasement" is for the sake of exporters? What about reducing reliance on imports and turning demand inwards to promote growth?

No, I don't think debasement is for the sake of exporters, that is why I added 'ostensible' in brackets. This debate has been hammered out in another thread so I'm not going into it again but yes, I support sound money (call it a gold fetish if you must) and supply side economic policies, and the free market!

 

[scose-no-doubt]

You've spent the last two years side-stepping most questions and then banging out buzz words mate. Gold standard this, Austrians that, innnnflayshun this, dollar doom that...Booooring.

You did well out of the gold trade so kudos but ffs causality/correlation, bounded rationality, etcetera and so on.

yawn thread!

 

[new_trader]

You've spent the last two years side-stepping most questions and then banging out buzz words mate. Gold standard this, Austrians that, innnnflayshun this, dollar doom that...Booooring.

You did well out of the gold trade so kudos but ffs causality/correlation, bounded rationality, etcetera and so on.

yawn thread!

You are nothing but a bitter failure who has spent the last few years getting banned, signing up again and jumping from thread to thread begging for someone to teach you how to trade...

 

[scose-no-doubt]

Ooo-er!
Hahahahah
I'll leave you to it mate.

 

[Martinghoul]

You've spent the last two years side-stepping most questions and then banging out buzz words mate. Gold standard this, Austrians that, innnnflayshun this, dollar doom that...Booooring.

You did well out of the gold trade so kudos but ffs causality/correlation, bounded rationality, etcetera and so on.

yawn thread!

+1

 

[Atilla]

You've spent the last two years side-stepping most questions and then banging out buzz words mate. Gold standard this, Austrians that, innnnflayshun this, dollar doom that...Booooring.

You did well out of the gold trade so kudos but ffs causality/correlation, bounded rationality, etcetera and so on.

yawn thread!

+2 :cheesy:

(NT I'm with you on gold standard but only after we pay off debt first. Got it).