Housing is collapsing because there is no demand and it was severely over-priced. Goods that weren’t over-priced (like food) are going up in price and will continue to do so.
Would be a good point if it wasn’t totally false. See:
Lastly, is it your position that the U.S. will not default on its debt and declare bankruptcy next year? I intend to re-visit this thread next summer.
Not at all. We can easily pay off our debt if we:
A. End the war in Iraq.
B. Reverse Bush’s tax cuts for the wealthy.
C. Print money.
President Obama will take of this with no problem.
The key point here is that with a fiat currency the central bank can make bad debts whole simply by working the printing press.
That is what you are missing. The Fed isn’t blowing up the money supply by printing money. Its reversing deflation by returning liquidity to the banks to make up for bad loans. We had *price* inflation in the 70’s because the banks all put the new money in commodities. These days they are using it to stay solvent.
BIG difference.
And re: gold; we have more gold bullion than any other country. By a significant amount.
