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Old 05-27-2010, 04:42 PM   #281
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Originally Posted by Gone4Good View Post
Yup, I posted this in the other thread about how our governments have no choices other than default or hyperinflation.
The combination of deflation AND rapidly rising public debt are killer. We'd be better off with high inflation that reduces the "real" debt than a toxic combination of deflation AND rising debt. I fail to see how that combination can avoid ending very badly if it persists.
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Old 05-27-2010, 04:44 PM   #282
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Originally Posted by Gone4Good View Post
Sounds inflationary.
Um. This would actually be deflationary. Note that my irony detector may be broken today.


Inflation is, broadly speaking, too much cash in search of too few goods. We are at risk of inflation when we see:
* Industrial production and shipping running near capacity
* a tight labor market, where workers can readily demand and get raises
* high 'velocity of money', a combination of lots of cash around (loose credit), and lots of financial activity (lending and speculative investing).

Currently we really don't have any of these items, and are at least a few years away from seeing any of them.
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Old 05-27-2010, 04:54 PM   #283
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Originally Posted by M Paquette View Post
Um. This would actually be deflationary. Note that my irony detector may be broken today.
It must be broken; he was being sarcastic.
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Old 05-27-2010, 05:54 PM   #284
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But not meant as a slap at you, Ha. I guess I expect forums to be what they are, and there is a certain amount of groupthink that goes on. Probably endemic to human herd behavior, and I do not think it is going to change.
Its part of what makes a forum a comfortable place to hang out and read/post so I agree, unlikely to change.

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I guess I see it as pay it forward given how much I have learned from here and the mistakes I could have avoided if only I had known about this site a few years before I did. I try not to be to dogmatic preferring to just point people to resources and let them decide for themselves.

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But who knows, these newbies might be very well equipped to make up their own minds.
I have no illusions that some know much more than I, but there is a significant number who come here looking for information and advice.

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Old 05-27-2010, 07:18 PM   #285
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One aspect of this board that I do not like is its very rapid rejection of anything off the beaten path.
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The Road Not Taken
Robert Frost

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth.

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same.

And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I--
I took the one less traveled by,
And that has made all the difference.
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Old 05-28-2010, 05:43 AM   #286
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The combination of deflation AND rapidly rising public debt are killer. We'd be better off with high inflation that reduces the "real" debt than a toxic combination of deflation AND rising debt. I fail to see how that combination can avoid ending very badly if it persists.
True.

But what I was referring to is the thesis put forward in another thread that goes as follows . . .

1) Federal debts are high
2) Structural deficits are large
3) Fixing problems this large has basically never happened before because we lack the political will
4) The only way to reduce the debt burden is either default or inflation

Spain, with 20% unemployment, suggests there is indeed another option.
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