[quote=FlyerInHi]CAr, I’m now more clear about your position.
Sounds like you want deflation because that would help people on fixed income.[/quote]
Correct.
[quote=FlyerInHi]But, in the medium term, you worry most about inflation (currency collapse).[/quote]
This is a a general concern of mine…that savers and people on fixed incomes (that’s most people in this country because it includes workers, pensioners, people on public assistance, etc.) will continue to lose purchasing power over time for as long as the Fed is pushing for higher inflation and monetary expansion (with most of that going toward speculation instead of more productive investments).
Obviously, tax and trade policies are hurting these people as well. They are being hit from all sides.
[quote=FlyerInHi]In the long term, if “our currency can survive such an event” (I’m assuming a near collapse), then we will see deflation and the Dollar will be worth more than today.
I still don’t understand how we’d eventually end up with paper Dollars worth more than today after surviving a near collapse event. In my mind, currency collapse means the Dollar is worth less and less until nobody wants it anymore.[/quote]
No, a currency collapse tends to be inflationary (even hyperinflationary), not deflationary. This is when the currency loses the most value. When I said, “if our currency can survive such an event,” I meant that if the currency can survive the inflation and the resulting collapse/deflation (IF the deflation can happen), then it might be worth more at the end. But most currencies don’t survive — their money is exchanged to a new currency worth a fraction of their old currency…and this can happen multiple times in a row. People who hold hard assets like real estate are the most likely winners, though in some cases, you will see reforms put in place that redistribute land when these collapses happen. Ultimately, there is no safe place when currencies are manipulated like this.
That is what scares me most: that so many people who did nothing to create this mess — people who tried to be as conservative and prudent as possible — will end up carrying the burden for a long, long time, possibly for generations.
