I dont see how prices can be maintianed without a 30 year fixed rate of about 2% or 3%. Will the govt lend at this rate? Will other countries buy US treasuries if the govt does this? If the US govt did this, the US$ would lose 50% of it’s value in less than a year. Maybe more. But I really dont think the credit market would allow this in the first place. The Asian countries are moving away from treasuries already and so the future for the govt to mount greater,gigantic debt looks very questionable.
As unemployment increases, this becomes less possible as well just based on fundementals of income.
The bottom line is that wages have not risen in 10 years and prices have at least doubled. Until equilibrium is somehow returned, prices must come down.
