Also the person with cash can invest it in other currencies. I haven’t done this yet but will be researching it. I am much more comfortable with the responses to the thread so far than the original premise. Some of the arguments hold up – but not in the face of decreasing values. While mortgage rates are low today – they are rising and isn’t the current situation (despite what the government states) a stagflation? Where wages don’t go up but true inflation is rising? Add college tuition and the free spending habits to the list above. We spend more than we ever did as a nation and it’s tough to tell your kids / wife / family that you have to ‘economize’. We are like crack addicts who have become addicted by the easy credit of the last decade. Many folks won’t be able to jump off the cycle in time.
The economy is going to be wacked because the safety net is mostly gone (other than being propped up by China, Japan)… The ball is in their court because the US consumer has negative savings, true inflation, and a weakening and imaginary equity position in housing.
