Do you think the next huge trumped crisis will be 'Inflation, Infla

Do you think the next huge trumped crisis will be ‘Inflation, Inflation’ and a demand for price controls ?

Answer #1

I think there will be inflation. Currently everyone in the world buys oil with petrodollars which are basically US dollars. Middle East investors are rather dismayed at seeing their investment in dollars dwindle and are looking to sell oil for Euros and Yen. Until now world demand for dollars has maintained its value in spite of our deficits. When the demand for US dollars for petrodollars declines this will no longer stabilize our currency and the value will fluctuate more wildly. Our trade imbalance and deficit spending will erode the value of the dollar.

One positive effect of a weaker dollar may be more employment. As the dollar declines imported goods will become more expensive increasing demand for domestic goods.

Answer #2

A lot of people have been predicting inflation for a while now…I actually recall at least a few members here, I think mentioning that we’d have inflation in a big way as a result of all the extra speding, etc.

The bright side is if interest rates do finally go up, savings accounts will earn more…but, what you get with your money won’t really get any better.

Answer #3

Not only will there be inflation, but we will see banking crisis part 2 as a result of it. The government will eventually succeed in “stimulating” the throwing of good money after bad again. We’re already starting to see loans picking back up right where they left off.

Since we have learned nothing from this crisis and nothing in the system has fundamentally changed, we’ll see a bunch of stupid loans again, but this time they’ll be low interest fixed rate long term loans. Inflation will pick up due to all this stimulus spending, and banks, who borrow short term to lend at higher rates long term, will find themselves having to borrow at high short term rates, while earning low rates on their loans. This is the exact thing that caused the S&L crisis in the early 80s, and it’s going to happen again, because government can’t stop manipulating the economy.

Shut down the fed, return to a gold standard, nationalize and break up everyone with their hand held out, return banking to the regional level so we’ll never be held hostage by ‘too big to fail’ again, and enforce higher reserves.

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