If we dont pull out troops and our money from overseas we're going to experience something called hyperinflation. You'll have to take a wheelbarrow full of money to the store to buy a loaf of bread, The Chineese know the Federal Reserve is just printing more money to pay off some of our debt. Guess what, that lowers the value of our dollar and the Chineese know it. Pretty soon they're not going to accept our dollar as a valid currency and thats when the fit hits the shan.Our monetary system will be in shambles. We've got to cut back on defense spending and foreign aid or its all over. Thats the biggest piece of the pie. American Taxpayers, the real ones, the middle class are tired of wars, money going to foreign countries who hate us. Cutting Social Security and sending tax dollars overseas should never cross anyone's mind.American moral is at an all time low, young people have absolutely nothing to look forward to. Bring our troops home and build bridges, schools, lakes for hydroelectric power, protect schools. I remember an ol Baptist Preacher growing up. He use to say you have to get your own house in order before you can help someone ese.

Such a comfort. Economic analysis by Srinath. No clue about what the fed is, how it works, what it does, no grasp of Austrian economics to hold up & compare to Keynesian ideology. Ohh how we "Need" inflation,,
We "Need" a weak dollar. & People BUY that crap. That makes as much sense as saying "I need to be able to earn less per hour than my neighbors"..

Webbie - we need a weak dollar so our goods (made in America) can be sold competatively overeas.  At least that is the official line.  Does it help you as an individual when you travel overseas??No, you'll have to spend more us dollars to buy that new Camoflage "enfield"  but if a new Harley in India only cost 100,000 million rupees instead of 300,000 million rupees back when the dollar was strong, maybe we will finally see a Bollywood version of the wild ones (which had hardly a Harley in it).

Hope the new year finds us all with an increase in good health and personal wealth.

LANCER wrote on 01/17/13 at 03:51:45:



Yikes - wrong on so many many many levels.
Govt is not a person. A govt cant live on 4K when it takes in 5K ... That will actually have to be the equivalent of shredding money.
We dont need to print - but we can not have deflation in any section of the economy for a prolonged period. That will kill that industry far quicker than china or nafta.

Since you brought up the example: The closest I can use a person - or me as an example is this - I make 5K. I live on 4K and the 1K I save comes out of my food budget. To the extent that I buy no food. You kill social welfare and other safety programs that is what you are doing.
You want schools to be secure and you want to have guns - that is a bullet proof vest and guns, you have that, you want industrial growth that is motorcycles and cars. You want energy subsidies - you got that as fuel and electricity. You can live on 4K sure, but not the way you're suggesting. You want to kill social programs and medical ... that is the equivalent of not eating or going to the doctor. Yea you save 1k a yr, but you'd dead from starvation.

Cool.
Srinath.

Serowbot wrote on 01/17/13 at 15:26:10:



Not quite ... china holds just about 15% of our debt.
Japan holds another 15%. 33+% is held by americans.
There is another 5-6% held by russia.
The rest are by countries that explicitly and implicitly trust the US. Brazil, UK, switzerland, france, germany, India ...

No more than 20% is in countries that have an interest counter to ours.

And yes ... I am not worried.

And no its not economic analysis by srinath. Its economic analysis by several economists who are not affiliated with one party or the other.

Cool.
Srinath.

Thats just it. Theres nothing backing a dollar bill up. Its nothing but a promise that can be broken anytime. The Federal Reserve can print all they want to and hand them outbehind our backs which they are doing regularly. Why is Congress so scared of auditing the Federal Reserve?

No one has currency backed by gold.

The whole idea of $$$ - we dont need to be gold ... we just need to be better than most of the rest. In fact we are not even required to be the best. We just need to be the best among big economies. The pound and the marc and swiss frank are all pretty strong, even stronger than USD. However there isn't a few quadrillion of those in use.

USD is it, nothing else is close. The euro was once a contender, it sadly now is the new toilet paper.

Cool.
Srinath.

Lancer - very nice theory ... but also very vague and non descript. It can be anything.
Midnight started talking about hyperinflation due to chinese imports.
Serow and I didn't agree.
I take it that you dont agree with me, but you're too general to make any specific point.
Cool.
Srinath.