PE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> It's the Debt, Stupid

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Offline Eddie

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It's the Debt, Stupid
« on: December 15, 2016, 01:23:17 PM »
Been reading this guy lately.

https://anthonybsanders.wordpress.com/2016/12/15/interest-cost-on-federal-debt-set-to-explode/

What makes the desert beautiful is that somewhere it hides a well.

Offline g

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Re: It's the Debt, Stupid
« Reply #1 on: December 15, 2016, 02:04:33 PM »
Been reading this guy lately.

https://anthonybsanders.wordpress.com/2016/12/15/interest-cost-on-federal-debt-set-to-explode/



What the author fails to appreciate is the fact that the issuer of the Debt, the Federal Government has the ability to print the interest and force you by law and the barrel of a gun to accept it as payment.

This is why we have fiat, and the dim lad is worried about the economy being able to earn it.

What happened to your debt doesn't matter article and idea of a week ago Edward?  :icon_scratch:

Offline Eddie

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Re: It's the Debt, Stupid
« Reply #2 on: December 15, 2016, 02:38:35 PM »
The guy that wrote that was counting on interest rate staying at 1-2% or less.

The jury is still out on whether we might have a deflationary event. The other author was basically saying that we need to do whatever we have to do, including printing money, to make sure that doesn't happen.

If interest rates rise to historical norms, obviously that isn't going to be the problem.

Lots of pundits think the Fed is just raising now in order to cut in the near future. I certainly don't believe their bullshit about how great the economy is doing.

I just read 'em a post 'em, so we can talk about it. I'm not sure what's going to happen...except that it looks like a rock and a hard place situation.



What makes the desert beautiful is that somewhere it hides a well.

Offline g

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Re: It's the Debt, Stupid
« Reply #3 on: December 15, 2016, 03:47:14 PM »
The guy that wrote that was counting on interest rate staying at 1-2% or less.

The jury is still out on whether we might have a deflationary event. The other author was basically saying that we need to do whatever we have to do, including printing money, to make sure that doesn't happen.

If interest rates rise to historical norms, obviously that isn't going to be the problem.

Lots of pundits think the Fed is just raising now in order to cut in the near future. I certainly don't believe their bullshit about how great the economy is doing.

I just read 'em a post 'em, so we can talk about it. I'm not sure what's going to happen...except that it looks like a rock and a hard place situation.

Too say we live in very confusing times is most certainly understatement Eddie. Especially in the Financial Arena.

My honest opinion on this matter, and it's nothing said flippantly, is that the government debt cannot be paid, it must be inflated away.

Deflation is not a choice, it is not an option.

This is not to say that it cannot come about, but only by accident, not design. We had a deflationary bust in 2008, they are still inflating their way out of it.

Don't be fooled by the so called big dollar rally that the Dim are chirping about. It's falsely perceived awesome strength and power is because of who it is the ring with, the Yen and Euro.

That is the equivalent of Mike Tyson beating the living shit out of Steven Hawkings and Barney Fief.

The World of fiat and the fools running it are in great disarray. Utmost caution and study are imperative in the turbulence being witnessed.

                                                   

Offline Eddie

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Re: It's the Debt, Stupid
« Reply #4 on: December 15, 2016, 04:34:42 PM »
I'm in general agreement with you. I have no doubt that the PLAN is (and always was) to inflate away the debt. I'm just not sure that's as easy now as it once was, given the fragility of the system, with all the derivative exposure, and with the EU slowly disintegrating over the course of a decade or two.

In general, inflation doesn't bother me too much, because you can deal with it by using time tested strategies. Deflation is a much harder, much more dangerous situation for most people, because most of us are leveraged with credit, and a deflationary event can break us.

It's harder to hedge for deflation, other than to be debt free, which is NOT what you want to be for an inflationary scenario.





What makes the desert beautiful is that somewhere it hides a well.

Offline jdwheeler42

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Re: It's the Debt, Stupid
« Reply #5 on: December 15, 2016, 06:14:43 PM »
Deflation is not a choice, it is not an option.

This is not to say that it cannot come about, but only by accident, not design. We had a deflationary bust in 2008, they are still inflating their way out of it.
I agree whole-heartedly that central bankers will never allow deflation to occur of their own volition.  Doing so represents a voluntary lessening of their power and control, which, while possible on an individual basis, never occurs on a class basis.  Saying it can only happen by accident, however, is not quite right; it can also happen due to forces beyond the central bankers control.  Now, they probably won't admit, to themselves or others, that such forces exist; that means that they will be unprepared if and when they do appear.
Making pigs fly is easy... that is, of course, after you have built the catapult....

Offline g

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Re: It's the Debt, Stupid
« Reply #6 on: December 15, 2016, 08:35:00 PM »
Deflation is not a choice, it is not an option.

This is not to say that it cannot come about, but only by accident, not design. We had a deflationary bust in 2008, they are still inflating their way out of it.
I agree whole-heartedly that central bankers will never allow deflation to occur of their own volition.  Doing so represents a voluntary lessening of their power and control, which, while possible on an individual basis, never occurs on a class basis.  Saying it can only happen by accident, however, is not quite right; it can also happen due to forces beyond the central bankers control.  Now, they probably won't admit, to themselves or others, that such forces exist; that means that they will be unprepared if and when they do appear.

Yes, an accident.

A force beyond their control, unforeseen in their plan to inflate.

Forces beyond their control also means temporarily History teaches us well.

Beyond their control means for the moment, a few years at most, a very short time historically, but for those living through it.

There is always an inflation to follow if the unit is a fiat, Always.

This is why Gold has been in a bull market against fiat for 4000 years or so give or take a few centuries.

 

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