The United States: Default or Hyperinflation?

[Marvin Gaye]

Hey guys! Want to hear your thoughts on the state of our economy

My thinking is that the US is backed into a corner that it can't get out of. The only way this country can get out of it's debt obligation is to hyperinflate or to default...

Why do I think this? Well instead of talking about paying off debt, our politicians only talk about cutting the deficit.

If I make 50k per year and spend 70k for decades, will cutting my spending to 65 do a damn thing to get me out of debt? NO!

In a broken democracy like this it's pretty impossible to take away peoples entitlements once you give them to them. So hardly any spending cuts can be managed, without putting people up in arms all pissed off that uncle sam pulled the government tit out of their mouths.

Also, contrary to the popular socialist belief in this country... higher taxes don't mean higher government revenue. What it does mean is: business owners cutting costs (jobs) to get back out of the red, now all of a sudden people are out of work and: 1. Not paying taxes any more. 2. on the government tit. Ultimately entrepreneurs, responsible for most of the tax revenue in this country, will look for a way out.

The government is stuck, it can't squeeze its subjects for more revenue and it also can't make the necessary cuts.


Do you think we will hyperinflate or default?

 

[Vantagepoint34]

It seems like the country has entered into a five to ten growth years period. Considering we do have enough money to construct a museum in New York City. The country seems to be heading up, if you look at the overall picture. Also winning the Olympics this year is also a plus for our young country. Our school system seems to be responding well considering all of the graduates the schools are pumping out. Finding a job after school is not as easy as it seems with a majority of our students that graduate heading back home to regroup. All in all generation peter pan is in full effect.

 

[Upside]

Neither. Job recovery will take more than one or two years coming out of the biggest recession in decades. Roughly ~7.9% unemployment isn't that bad considering the ~10% one to two years ago. The country will go as far as its people are willing to let it. If people want to leech of welfare but not put anything into the pot, then growth will stagnant for years to come. I believe the biggest issue this country faces isn't the richest or even the middle class, but whether the poorer class of society will puck up their boot straps or pick up a keg.

 

[Bible_Belt]

If people want to leech of welfare but not put anything into the pot, then growth will stagnant for years to come.

That's how I feel about the Federal Reserve. All we have to do is default to those rich bankers, and as a country we'd suddenly make 11 Trillion dollars. That could pay off everyone's student loans, give free healthcare and education to everyone, repair our crumbling infrastructure, and steer our country away from its destiny of becoming a third-world nation.

But we don't do that, because the profits of those 11 banks matter more than all of the problems of 300 million people put together. We're destroying a nation so that those banks can get rich.

 

[Burroughs]

But we don't do that, because the profits of those 11 banks matter more than all of the problems of 300 million people put together. We're destroying a nation so that those banks can get rich.

Yes this is true...this is the reason fiat currencies were created in the first place so that money could be 'created' (it can't) and the labor in the form of interest could be stolen.

The reality however is the subtlety of mind it takes to understand how banks dictate and manipulate finance is beyond 99.9% of people on the planet...and getting worse...why do you think entertainment figures are elevated to a godlike status....

...a thinking public is dangerous to the elite.

 

[Burroughs]

But we don't do that, because the profits of those 11 banks matter more than all of the problems of 300 million people put together. We're destroying a nation so that those banks can get rich.

Yes this is true...this is the reason fiat currencies were created in the first place so that money could be 'created' (it can't) and the labor in the form of interest could be stolen.

This why WAR as a global way of life is promoted...the banks lend to both side and the public pays off the debt for centuries.

The reality however is the subtlety of mind it takes to understand how banks dictate and manipulate finance is beyond 99.9% of people on the planet...and getting worse...why do you think entertainment figures are elevated to a godlike status....

...a thinking public is dangerous to the elite.

 

[Quiksilver]

Hyperinfaultation

 

[Quiksilver]

It seems like the country has entered into a five to ten growth years period. Considering we do have enough money to construct a museum in New York City. The country seems to be heading up, if you look at the overall picture. Also winning the Olympics this year is also a plus for our young country. Our school system seems to be responding well considering all of the graduates the schools are pumping out. Finding a job after school is not as easy as it seems with a majority of our students that graduate heading back home to regroup. All in all generation peter pan is in full effect.

Is it heading up faster than your national debt?

$16,346,640,000,000

STILL have an annual deficit of

$1,100,000,000,000

...


Debt repayments are becoming an ever-larger slice of the Federal Budget pie. By 2017 at current rate, repayments on your national debt will equal current military spending.


^ And that is only Federal spending. Many of the States are broke and borrowing, issuing IOUs and receiving emergency loans just to pay staff.



http://www.usdebtclock.org/

http://goldtrustfinancial.com/wp-content/uploads/2012/04/US-National-Debt-Chart-2012_LG-530x800.jpg



Whether you like it or not, to survive in the medium term your FedGov is going to have to reduce its budget deficit until it has a surplus budget, and maintain that for some time.

That means laying off hundreds of thousands (millions?) of federal employees and cutting services. Not a bad thing in the long run, but in the short run very destructive. Those things should happen over the course of a decade or more, but you are going to have it happen overnight and in the course of a few months to a year.


If you think your nation is "headed up", try seeing what happens if the Federal Reserve raises interest rates to normal (3-6%).

http://www.stringfellow.co.za/wp-content/uploads/2012/01/us-official-interest-rates-january-2012.jpg

 

[Vantagepoint34]

Hey guys! Want to hear your thoughts on the state of our economy

My thinking is that the US is backed into a corner that it can't get out of. The only way this country can get out of it's debt obligation is to hyperinflate or to default...

Why do I think this? Well instead of talking about paying off debt, our politicians only talk about cutting the deficit.

If I make 50k per year and spend 70k for decades, will cutting my spending to 65 do a damn thing to get me out of debt? NO!

In a broken democracy like this it's pretty impossible to take away peoples entitlements once you give them to them. So hardly any spending cuts can be managed, without putting people up in arms all pissed off that uncle sam pulled the government tit out of their mouths.

Also, contrary to the popular socialist belief in this country... higher taxes don't mean higher government revenue. What it does mean is: business owners cutting costs (jobs) to get back out of the red, now all of a sudden people are out of work and: 1. Not paying taxes any more. 2. on the government tit. Ultimately entrepreneurs, responsible for most of the tax revenue in this country, will look for a way out.

The government is stuck, it can't squeeze its subjects for more revenue and it also can't make the necessary cuts.


Do you think we will hyperinflate or default?

Lies fed to you by Wimpus Americanus

 

[goundra]

REAL unemployment is at 15%, and realistically, over 50% of the US population doesn't make a decent wage. We are in for a disaster, the only question is how soon, and how bad. I've got a year's supply of food stashed, and I'm a very skilled gunhandler. I fully intend to hole up in a small dugout, and avoid everyone if shtf, due to the risk of contagious diseases and violence, for at least a year, if shtf in any serious way. Anyone who thinks otherwise is welcome to their delusions.

 

[Machina29]

I've accepted the fact that US is doomed. Too many welfare recipients, too many Israel-firster warhawks, too much debt (government and individual), and not enough savings.

Everyone wants cuts, but just not their programs or programs they agree with.

There is already a push to end the petrodollar. When that happens, the US economy is screwed.

 

[Quiksilver]

I've accepted the fact that US is doomed. Too many welfare recipients, too many Israel-firster warhawks, too much debt (government and individual), and not enough savings.

Everyone wants cuts, but just not their programs or programs they agree with.

There is already a push to end the petrodollar. When that happens, the US economy is screwed.

Yep, just be aware that corporate and international welfare accounts for far more gov spending than citizen welfare.

 

[taiyuu_otoko]

Don't forget about the UNFUNDED LIABILITIES.

these are what the government has promised to pay various peoples, in the future.

It's around 100 trillion.

So not only is the U.S in the hole a trillion dollars every year, but it's already on the hook to pay 100 Trillion dollars in the future.

And those trillion dollars are indexed for inflation, so any kind of hyperinflation won't get 'em out of that.

Only default will.

There will likely be both. First one, then the other.

As it stands now, transfer payments, or non-discretionary spending, (citizen welfare) comprised in 2011 MORE than the take in taxes for 2011

This doesn't include other discretionary spending, such as military.

Ain't NO way to grow an economy out of this mess. None whatsoever.

 

[goundra]

COLLAPSE IS INEVITIABLE. 300 million people in US, average life expectancy is 75. Now I DO REALIZE that each "cohort", by the year, is not the same number of people. There are a LOT more people aged 5 than aged 75, in US, but if shtf, stuff hits the fan, all the kids under age 6-7 are going to die, cause they can't keep up walking with the adults. Pretty much everyone over the age of 70 will suffer the same fate. So will anyone who is sick or hurt, or requires refrigerated meds. All that 40 mill or so will die within 2-3 months of shtf, along with all that die from the fighting, diseases, bad water, mal nutrition, fires, suicided, etc.

it took WW2 5 years to kill 60 million people, they were scattered all over the world, with many lost at sea. With 60 mill dead RIGHT HERE, and the dogs feeding on the bodies, flies, ticks, skeeters everywhere spreading disease, guess how long everyone else is going to last, unless they know what to do?

 

[taiyuu_otoko]

Not just collapse in the West, but EVERYWHERE.

As it stands, there is sufficient capital structure (equipment, processes, methods of distribution, etc) in various WESTERN countries to feed the world of 7 billion.

But when that capital structure collapses, as it inevitably will, vast number of people will starve. And they won't go down easy.

It will be like the mass starvation and death of Stalin's Russia combined with the massive violence of China's cultural revolution. Both of which combined to kill over 70 million people.

Looking back through history, this has happened several times. Society grows, and hits some kind of "ceiling" where societies collapse and plenty of people die.

It would appear to be a natural progression of human life on Earth.

And it's going down soon. On a big scale.

Gonna get ugly.

Inevitable? No.

Likely? Yes.

Solutions? Voluntary shrinking of world governments and rolling back the clock on government regulations and any inhibitory laws on production and trade.

AND a worldwide return to the gold standard. Not, the B.S. post WWI "pretend" gold standard, but a REAL gold standard.

What's the likelihood of THAT happening?

Wanna see the future? Take a look at DETROIT. Few cops. Rampant crime. No lights at night. People guarding their homes with shotguns. Flash mobs tweeting each other and meeting at the local 7-11 for mass robbery, knowing the police won't do squat.

That's gonna be the ENTIRE U.S. in a couple decades.

 

[goundra]

IN less than 10 years, for SURE, and maybe in less than 5 years, in fact.

 

[Bible_Belt]

Solutions? Voluntary shrinking of world governments and rolling back the clock on government regulations and any inhibitory laws on production and trade.

It was "free trade" that got us in the mess we're in now. When I was in high school, NAFTA was being debated. Ross Perot told us that all of our jobs would go to China and Mexico if it passed. Then later in college, my professors taught that completely unrestricted trade was an absolute truth of the modern economic universe. You'd have to be a left-wing wacko to disagree.

Today, twenty years after NAFTA, it turns out that Ross Perot was right. And so was Pat Buchanan. Our jobs did go overseas. And those were the good jobs. The only ones left are much lower-paying than what we lost. It turns out that economic nationalism was not the stone-age idea that it was made out to be. Letting American companies hire foreigners outside the US to do jobs that used to be done by Americans is not getting this country anywhere. I don't blame anyone specific for doing that, because that is just the climate we are in right now. The only way it's going to change will be from the Federal government. It's economic regulation and un-free trade that can save this country. I don't think that will happen, though, because the policies we have now were meant to benefit only the wealthiest people, which is why they are the only ones still doing well.

 

[Dust 2 Dust]

REAL unemployment is at 15%, and realistically, over 50% of the US population doesn't make a decent wage. We are in for a disaster, the only question is how soon, and how bad. I've got a year's supply of food stashed, and I'm a very skilled gunhandler. I fully intend to hole up in a small dugout, and avoid everyone if shtf, due to the risk of contagious diseases and violence, for at least a year, if shtf in any serious way. Anyone who thinks otherwise is welcome to their delusions.

I'm stockpiling food as well. Went out and bought my first gun too. Never know when ****'s gonna hit the fan and it's bug out time.

 

[taiyuu_otoko]

It was "free trade" that got us in the mess we're in now. When I was in high school, NAFTA was being debated. Ross Perot told us that all of our jobs would go to China and Mexico if it passed. Then later in college, my professors taught that completely unrestricted trade was an absolute truth of the modern economic universe. You'd have to be a left-wing wacko to disagree.

I disagree, and trust me I'm not a left-wing wacko. Wacko, sure, but not left-wing.

The problem is very complicated. Increasing free trade is only one part of a HUGE complicated equation.

Sure, NAFTA shipped out a lot of U.S. jobs.

But at the same time, they were basically welcoming in any immigrant with a pulse. What kinds of jobs do those immigrants usually take? Those same jobs that were shipped overseas.

ALSO, at the same time, there were plenty of tariffs and regulations that were STILL IN PLACE to protect american "farmers."

Take sugar for example. Everything that's made from corn (high fructose corn syrup, ethanol) can be made a lot CHEAPER with pure sugar.

Why don't they? Because the sugar farmers are protected by HUGE tariffs.

If producers were allowed to IMPORT sugar, most everything that has any kind of sweetener added would be a lot cheaper.

(Not to mention the whole ethanol-from-corn-boondoggle. Brazil has been making ethanol from SUGAR for YEARS with a lot more economic success.)

NAFTA made it easy to OUTSOURCE labor, but they still restricted the ability to IMPORT CHEAP GOODS to a large degree.

While at the same time INCREASING immigrants who's only choice was those cheap jobs that were just shipped overseas.

If they had REMOVED ALL TARIFFS and DRAMATICALLY RESTRICTED immigration, the economic landscape would be completely different.

Stuff would be a LOT cheaper.

There wouldn't be such a huge need for welfare.

Not to mention that the U.S. manufacturers of goods, using cheap foreign labor, had been able to game the system since the dollar was forcibly made the worlds reserve currency.

The entire world economy is gamed by fiat currencies and banking cartels, and politicians passing laws whose main goal is to get them more votes.

But, if you insist, I would accept the U.S. closing it's doors, to trade, to immigration, to any wage laws, to unions and especially to fiat currency.

in for a penny, in for a pound.

Then we might be OK.

But there's still MILLIONS of people who expect to retire and have their health care paid for on the government's (read: working people's taxes) dime.

No matter how you slice it, THAT is just not gonna happen.

 

[Mike32ct]

I loved the sales pitches for NAFTA...

"For every job we (the USA) loses, we will gain three."

"If we don't accept this deal with Mexico, Japan will."

"If it doesn't work out, don't worry, we have an opt-out clause."

Ross Perot was spot on.

Back to the main topic...

They are inflating NOW. Default will come soon.