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The History Of The American Economy, Debt And Inflation [Copy link] 中文

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Post time 2013-2-3 18:51:16 |Display all floors


Uploaded on 26 Oct 2009
The History Of The American Economy, Debt And Inflation


http://www.youtube.com/watch?feature=player_detailpage&v=t2RaWWW0eyE

         









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Post time 2013-2-3 18:51:51 |Display all floors
This post was edited by sansukong at 2013-2-3 19:40

Excerpt:
Inflation and Debt                           
JOHN H. COCHRANE

For several years, a heated debate has raged among economists and policymakers about whether we face a serious risk of inflation. That debate has focused largely on the Federal Reserve — especially on whether the Fed has been too aggressive in increasing the money supply, whether it has kept interest rates too low, and whether it can be relied on to reverse course if signs of inflation emerge.But these questions miss a grave danger. As a result of the federal government's enormous debt and deficits, substantial inflation could break out in America in the next few years. If people become convinced that our government will end up printing money to cover intractable deficits, they will see inflation in the future and so will try to get rid of dollars today — driving up the prices of goods, services, and eventually wages across the entire economy. This would amount to a "run" on the dollar. As with a bank run, we would not be able to tell ahead of time when such an event would occur. But our economy will be primed for it as long as our fiscal trajectory is unsustainable.Needless to say, such a run would unleash financial chaos and renewed recession. It would yield stagflation, not the inflation-fueled boomlet that some economists hope for. And there would be essentially nothing the Federal Reserve could do to stop it.This concern, detailed below, is hardly conventional wisdom. Many economists and commentators do not think it makes sense to worry about inflation right now. After all, inflation declined during the financial crisis and subsequent recession, and remains low by post-war standards. The yields on long-term Treasury bonds, which should rise when investors see inflation ahead, are at half-century low points. And the Federal Reserve tells us not to worry: For example, in a statement last August, the Federal Open Market Committee noted that "measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time."But the Fed's view that inflation happens only during booms is too narrow, based on just one interpretation of America's exceptional post-war experience. It overlooks, for instance, the stagflation of the 1970s, when inflation broke out despite "resource slack" and the apparent "stability" of expectations. In 1977, the economy was also recovering from a recession, and inflation had fallen from 12% to 5% in just two years. The Fed expected further moderation, and surveys and long-term interest rates did not point to expectations of higher inflation. The unemployment rate had slowly declined from 9% to 7%, and then as now the conventional wisdom said it could be further lowered through more "stimulus." By 1980, however, inflation had climbed back up to 14.5% while unemployment also rose, peaking at 11%.Over the broad sweep of history, serious inflation is most often the fourth horseman of an economic apocalypse, accompanying stagnation, unemployment, and financial chaos. Think of Zimbabwe in 2008, Argentina in 1990, or Germany after the world wars.The key reason serious inflation often accompanies serious economic difficulties is straightforward: Inflation is a form of sovereign default. Paying off bonds with currency that is worth half as much as it used to be is like defaulting on half of the debt. And sovereign default happens not in boom times but when economies and governments are in trouble.Most analysts today — even those who do worry about inflation — ignore the direct link between debt, looming deficits, and inflation. "Monetarists" focus on the ties between inflation and money, and therefore worry that the Fed's recent massive increases in the money supply will unleash similarly massive inflation. The views of the Fed itself are largely "Keynesian," focusing on interest rates and the aforementioned "slack" as the drivers of inflation or deflation. The Fed's inflation "hawks" worry that the central bank will keep interest rates too low for too long and that, once inflation breaks out, it will be hard to tame. Fed "doves," meanwhile, think that the central bank can and will raise rates quickly enough should inflation occur, so that no one need worry about inflation now.All sides of the conventional inflation debate believe that the Fed can stop any inflation that breaks out. The only question in their minds is whether it actually will — or whether the fear of higher interest rates, unemployment, and political backlash will lead the Fed to let inflation get out of control. They assume that the government will always have the fiscal resources to back up any monetary policy — to, for example, issue bonds backed by tax revenues that can soak up any excess money in the economy. This assumption is explicit in today's academic theories.While the assumption of fiscal solvency may have made sense in America during most of the post-war era, the size of the government's debt and unsustainable future deficits now puts us in an unfamiliar danger zone — one beyond the realm of conventional American macroeconomic ideas. And serious inflation often comes when events overwhelm ideas — when factors that economists and policymakers do not understand or have forgotten about suddenly emerge. That is the risk we face today. To properly understand that risk, we must first understand the ideas underlying our debates about inflation.

http://www.nationalaffairs.com/publications/detail/inflation-and-debt


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Post time 2013-2-3 19:35:23 |Display all floors
This post was edited by Revolutionar at 2013-2-3 19:36

so what do you these people who sponsors such stuffs want?


These Repugnant politicians and their sponsors, what do they really want?

Anyone sat down and ask the deep questions?





What they really really want ..............Is to reduce cost of doing business in America...........to China levels if they have their Way. That is their Nirvana..............and hell for the average working class America.
I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2013-2-3 19:50:01 |Display all floors



The Repugnant model, favored by Rats and by China also, is a model of exploitation. For the haves to exploit the have nots. To blame the poor for being poor.


The Obama American model is a model for enablers, to enable people to live a full productive life
and social security as the center piece of American life.


There is only one winner n this war.

The Repugnants want you to focus on the deficits and liabilities side of the Balance Sheet.


But, once you incorporate in the assets side of the American Balance Sheet., there is no reason to feel scared. In fact everyone should feel optimistic and assured of the American Balance Sheet and future.

As I said, the analysts who have no money are bearish.

The people who actually have the money, like fund managers and Zhongnanhai...........well.........they are bullish about America.



I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2013-2-4 06:13:52 |Display all floors

RE: The History Of The American Economy, Debt And Inflation

FIRST NATIONS ( LAKOTA PEOPLE ) Heartbreaking - (Google Search for video) "to stay true to who you are. Never allow anyone make you different or think different about what it is you are created to be ...

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Post time 2013-2-4 08:13:23 |Display all floors



Why is the rat so quiet after starting the thread?

Why the rat go on to post the stuffs all over the place but will not want to defend his posts?


I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

Use magic tools Report

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Post time 2013-2-4 12:08:13 |Display all floors
sansukong Post time: 2013-2-4 06:13
US Debt Crisis - Perfectly Explained

The system is set up such that,
Uncle Sam prints money, inflation is exported to China.

In other words, the solution, the obvious solution ,chosen by Bernanke is to keep printing money until the employment figures are tolerable, the economy recovers and government tax collections improve with improving economy......


In other words, stay calm.

Interestingly, bearish articles are plentiful but written by  people who dont have the money.

The people who actually have the money, the fund managers and Zhong Nanhai.......well, they are bullish.
I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

Use magic tools Report

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