[quote=FlyerInHi]You didn’t answer the question, CAr.
The way I read your comments about the Federal Reserve is that everything that they do will turn out in vain. That there are some organic forces that will reset everything in the end.
Plus you keep on claiming that, long term, deflation will prevail.
Please detail how all your prediction will play out, for example for someone who has $100,000 in savings today.[/quote]
This is an incredibly complex issue with many moving parts. I’m not saying that the Federal Reserve is powerless in all ways or in every case, but with the situation that we have now, their policies are making things worse, not better. Fiscal policy is more important than monetary policy in this particular case, though combining the efforts of both Federal reserve and government institutions would be optimal with the government having ultimate control. Flooding the already wealthy/powerful with more even more money/power when the PROBLEM is extreme wealth/income (and power) inequality will only make things worse…much worse.
Unlike you, I am not of the belief that debt doesn’t matter…not unless you’re talking about accepting a total currency collapse, and choosing to knowingly taking that path.
As for the last part of your post, if a person with $100,000 cash today remains in cash, I believe that they will continue to lose purchasing power with every year that the Federal Reserve is manipulating interest rates and money supply. At some point, though, I believe this will all collapse, and if the currency survives, those holding cash — assuming it’s in a safe place — will probably benefit in the long run. But all of that is a guess, and depends on whether or not our currency can survive such an event, and how the institutions holding the money survive the event as well.
