Financial Crisis

My thoughts on the financial crisis.

Category:

News & Politics

Tags:

• financial crisis
• peak oil
• economic collapse
• peter schiff
• jim rogers
• marc faber
• dollar
• china
• housing bubble
• meltdown
• great depression

[Mikannika]

With hyperinflation the USA wild not be able to import anything. More then 50% of the energy (oil) is imported. No oil means no food en no food means starvation. Do you really think that's the way out of the US government?

[jdouche]

Yes, could you imagine the US not doing it? Imagine congress willingly cutting the federal buget by 50% and cutting all kinds of programs. There is no way that would happen.

[Bilakaifa]

That was a great video. One thing though. I disagree that the creditors would be worse off in a deflationary period just because they would get devalued assets. Yes, they will lose a portion of their investment, but it is nothing compared to the loss of the debtor, who, now with no credit or job, will be losing the asset and have thrown money at the mortgage for a period of time for nothing. Only better if they do what you suggest, which is drop the higher debt for the lower debt...

[jdouche]

The real winners in deflation are people with cash. The debtors lose their houses, the banks take a loss when they dump forclosures at cheap prices, and people with cash are able to buy up the cheap assets. This is why the dollar is strong and borrowers and lenders are both getting screwed right now. If I could borrow a million dollars right now, I would do it. I could buy up cheap stocks, commodities, and real estate, then pay the loans back with worthless dollars later.

[causechange]

I think hyperinflation will occure followed by deflation. What do you think about this scenario where they devalue the current debt then take money out of the system once loans are paid back? Or is this impossible because they are just paying debt with more debt in a never ending cycle. how does it finish?

good clear explantion!

[elitegaurdain]

Your forgot to mention other consequences of increased gov. spending.

As you said inflation

But there also could be intergenerational debt or increased taxes

One of the biggest problems with the new deal is that it raised taxes

While the public sector grew, the private sector shrunk a ton

This caused huge unemployment, and put America in to a depression that lasted a decade. If there was not as much intervention by the government, the great depression should have lasted only 3 or 4 years.

[theblackBay]

good article !

[satyabodhi]

How will the existing assets, the capital of our society be used? If government inflates, as it now must, the people who first get the money are unlikely to spend it on what is really most wanted and needed. The attempts of the government to serve our needs will necessarily founder on the lack of a real pricing system. We will have bridges to nowhere, houses in which no one can live, and stores with food too expensive to buy.

The War on Savers is really a war against civilization.

[christo930]

The US is not, nor has it been, in danger of deflation. Falling housing prices is not deflation. The prices are so out of line with reality that they are not worth the prices people paid for them. Deflation is a general destruction of capital that would result in falling prices and wages across the board, not just housing. The gov wants to keep the houses inflated at least in nominal dollars, but that can only be done with inflation which affect all prices. It's stupid and short sighted.

[baboon81choc]

I think hyperinflation would be nasty for the debtors. If you think about it people who live have a mortgage on the house will have to eat still. Hyperinflation will make food way to expensive and force people to starve. The creditors will have savings and a very high interest rate return. THEY will have money to eat and live.

[cookeladoo]

Basic and simple to understand....and oh so true. Well done.