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"It is natural when you are a debtor [nation] that you lean in the direction of inflation, because it makes paying it back so much easier."
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 173 days ago (goldnews.bullionvault.com). Views: 573
Tags: debt housing bubble economics inflation |
| Related Tags: finance wall street business video stocks politics credit crisis |
"In my view," says John H.Makin – a visiting scholar at the American Enterprise Institute writing in the Wall Street Journal – "the least bad option [in fixing the financial crisis] is for the Federal Reserve to print money to help stabilize housing prices and financial markets."
"America is a country that owes money," agrees Philippa Malmgren, a former Bush advisor and now head of a risk consultancy in London. "It is natural when you are a debtor that you lean in the direction of inflation, because it makes paying it back so much easier."
The logic is simple: inflate the number of Dollars in issue, and you'll shrink the real value of each outstanding Dollar you owe
The Global Banking Crisis, 2008
"US money supply growth is running at a 47-year high," notes Bedlam Asset Management, "as the authorities seek to inflate away the debt bubble and prop up house prices.
"Clearly printing such huge amounts of money is not great for the exchange rate. A weak Dollar has forced the hand of other central banks as they try and keep their currencies competitive with it."
But might the scam work? Not if China, Japan and the big Dollar-holders of the Arab oil kingdoms can help it. Will they really let their own currencies rise...just so the United States stuffs them by paying its debts with devalued Dollars?
Inflation, it's claimed, eases the burden of settling your debts. But for government and private debtors alike, that's only true if your income rises faster than your on-going cost of expenditure. Otherwise, you end up struggling to make ends meet today, only to leave yesterday's debts for repayment tomorrow again.
Middle-class families and savers looking to get ahead of the game – both inside and outside the Federal Reserve's fast-inflating currency zone – might want to consider Buying Gold as defense. Because however this latest attempt to inflate away debt pans out in the long run, it's sure to make history.
And history says – time and again – that solid Gold Bullion holds its value whenever man-made currencies are forced to lose value.
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ian said |
| 1 year 173 days ago |
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