[quote=bubba99][quote=walterwhite]in terms of what, though? i agree that in terms of making actual money, it’s a bad bet; we’re broke.
but I think it’s a pretty damn good bet that at some point int he next 30 years, the US government, although it’s just been playing with fire lately, is going to ge the hang of creating some serious inflation,a nd while you may not make any real money, it will seem smart to ahve borrowed a large amount of dollars today becauseit will beeasier to pay them off someday. I hate to say it’s a sure thing, cause no one really knows, but it sure seems that that’s waht the powers that be want…[/quote]
I have been thinking down the same lines. That sooner or later, inflation and dollar destruction will make owning assets a good thing – maybe the only thing that will prevent wealth destruction. Real rates of interest on CD’s etc are negative so savings are a real loss.
Housing is a leveraged asset play and soon it may make financial sense. Pricing is critical, but we may see the housing decline actually reverse amid the dollar decline.[/quote]
Here is the scary version of inflation:
Instead of wages going up (not likely, with “globalism”), that money is “invested” overseas, or in commodities, or housing, or stocks… While asset holders are wealthier on paper, unless they extract money from these assets by selling them, that wealth is of no use to them if they need to buy something without taking on additional debt — using their assets as collateral.
What I fear is that “rich” foreigners end up with more US dollars and/or stronger currencies, and buy up all of our assets, essentially becoming our lords; and we, their serfs. We would also see asset and commodity prices rising, while our wages stagnate — creating a far more hideous financial situation that what deflation would deliver. This isn’t a prediction, as much as it’s an observation of what is currently going on, and has been going on for a couple of years, now.
Dollar destruction would wreck havoc on all working people in the U.S. It is only something to be desired by capitalists (asset owners), not laborers.
Nobody should get into debt now with the expectation that inflation will make their debt payments “smaller” in real terms. This is very unlikely to happen, IMHO.
BTW, if you’re looking for inflation and dollar destruction, you only have to look at the past ~2 years. What other reason is there for housing prices to levitate like they have, and for the stock market, bond market, and commodity market to skyrocket like they did? I think the time for massive inflation is in our past, not in our future. We have only managed to increase our national debt (by trillions), and all we have to show for it is another bubble economy that was entirely driven by the Fed’s monetary policies. It seems the winds in D.C. have changed, and there is less tolerance for this irresponsible financial behavior. We can only hope.
