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Inflation: The Last Gasp of the Obama Economic Crisis

Discussion in 'Political Debate & Discussion' started by carpro, Nov 15, 2010.

  1. carpro

    carpro Well-Known Member
    Site Supporter

    Oct 14, 2004
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    August 03, 2010

    Inflation: The Last Gasp of the Obama Economic Crisis
    By Monty Pelerin

    Inflation is the inevitable ending of this awful economic crisis. The only questions are how much and when.

    A rising number of supports champion inflation as a salvation strategy. Richard Russell in a recent newsletter provides the rationale (emboldening by Mr. Russell):

    In my opinion, the US MUST default on its debt. There are two ways to default. One is simply to renege on the debt ... The other way to default on the debt is to inflate it away. I'm absolutely convinced that this is the path that the US will take. If the US inflates enough, then over time (many years) the devalued dollar will tend of reduce the power of the debts.


    Former Fed Chair Paul Volcker understood the dangers of inflation in the early 1980s and took forceful action at a critical time. It is likely his actions prevented hyperinflation from destroying the economy. His was a personal act of courage, aided by at least two factors not present today. First, the economy was much more resilient and not overburdened with debt. Second, Mr. Volcker had President Reagan backing him. Reagan took the political heat because he considered inflation an evil: "Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man."

    Today, we have no Volcker, Reagan, or functioning economy. To argue that our economic salvation depends on default is to admit the intractability of our problems. To believe that we can manage an inflationary default strategy is the height of folly.


    And that is the path Obama and Bernanke are pursuing as we speak.
  2. billwald

    billwald New Member

    Jun 28, 2000
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    >In my opinion, the US MUST default on its debt.

    WRONG! Only thing matters is the ability to pay the bills. If the government would bring home ALL the troops especially those in North Africa and Europe and South America and confined the mission of the military to defending US borders and keeping the seal lanes open the cost savings would pay off the national debt.

    Instead of selling treasury paper on the open market, how about a "war bond drive" such as we had in WW2. Surly patriotic Americans especially Republicans would buy inflation protected bonds . . . say 3% + inflation. I would seriously think about it if coupled with bringing home the troops. How about 1 GI reduction in overseas troops for every $1000 of bonds? Even lefties might go for it.
  3. glfredrick

    glfredrick New Member

    Aug 5, 2010
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    Billwald will be the first one in line to complain to the government when we institute Sharia Law. They will tell him to shut up and bow to Mecca...