Roubini did not say the currency will collapse, he said:
“If markets were to believe, and I’m not saying it’s likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar,”
He didn’t say it was the end of the world or that it would happen, he was addressing the tactic of inflation as a problem solver, he was saying the deficit and spending needs to be addressed. He’s been saying a lot about timing the withdrawl of money from the supply, too quick,, we get a “W” recession, too late, inflation.
He isn’t the only one that believes or says this. If the power brokers hit the easy button (inflation) as a way to save the banks, the homeowners and get half off on their debt, they risk alienating other countries who buy our dollars and our debts because of our stability and lack of hijinks. There are plenty of other drawbacks as well.
But I’m with Eugene, the worst probably behind us or we are in the midst of it, football season starts tomorrow, then it leads to basketball season, by the time the nba finals are over next year, I hope you got all the doom and gloom presents you wanted for christmas because this pity party will be over. I do not believe we will have massive prosperity, things take time, they resonate in the back of people’s mind, spending will not return to 2005 levels until people start to forget. The real question is, where will the next bubble be? Where will the next technology explosion be? Will we get those 200 mpg equivalent cars? Will macrolane be approved by the FDA so women can get a J-lo butt or a boob job with just a shot and it wears off in a year or two, that might be the next bubble, pun intended.
