Harry Dent works off of demographic ideas. It's very, very easy to see the correlation between baby boomers needing their first cars, their first houses, their second houses, etc... they have been a huge force in the economy. Now it's apparent that their spending days have peaked and Dent is saying we're headed for deflation. I'm thinking that he is correct in that. What does that mean to the Public Sector, you know, those assholes that have overspent for decades [why does the world's richest economy in all of history have to borrow?] and like to blame the Tea Party when they can't raise the debt ceiling? It means that they are finally SO FUCT! The Fed has been doing everything in it's power to keep inflation alive, and we do have some inflation in some sectors but it's taken a historical effort just to keep us out of deflation, imo. Demographics is indicating that it might fail anyhow. now our President is proposing a savings account that steers people into buying Bonds, since nobody else is buying them. That is sort of a last ditch effort maybe? He just now woke up to the problem? The upshot of deflation is that the Public Sector that currently borrows 40% of it's payments on it's debt will be paying back in increasingly precious dollars. Considering that it currently can't really pay back it's debt there seems to only be one outcome: real default [as opposed to the defacto default of inflation or kicking the can down the road]
well deflation is actually an indicator of a sound economy as prices are falling as priced in terms of sound money (gold and silver) prices fall over time as productivity increases. This is the way it was in the industrial revolution in America, right up until the zionist Fed was created in 1913. Deflation benefits those who actually add value as they reap the benefits in falling prices. Without a doubt if the correction of the malinvestments had been allowed to take place after the last financial crisis, the pain of adjustment would have been huge, but it would have been immensely better than what has happened now, which is just papering over problems and not liquidating the debt. The shadow inventory of homes is still huge. The best thing that could happen is prices fall to reflect true supply/demand, and reward the savers with the low prices. I don't think the U.S. gets off as easy as Japan has, not that they are doing well either, obviously. The Japanese had surpluses and their mistake was investing in U.S. debt, whereas many Americans are in huge debts and it's just not a good place to do business in many cases. You have to understand that falling prices is not a bad thing. This 'deflationary death spiral' BS is keynesian propaganda as they work for their zionist banking masters who need more debt and credit to promulgate the ponzi, and deflation is what slays them (along with precious metals being used by people as money instead of their worthless fiat).
Printing money to repudiate debt is dishonest and will be infinitely worse than defaulting. Lenders have to take losses, too, for lending to insolvent borrowers. All of this so far has been contingent on the Chinese lending the U.S. money, but those days won't last forever. They can consume their own goods and increase their standards of living. I have no idea what the # will be on that U.S. debt clock that wakes up the foreigners, but it is coming and I think relatively soon. Not to mention the unfunded liabilities that dwarf that 17.2 trillion #, as well as off balance sheet things like Fannie/Freddie debt and the student loan debt. Debt is not wealth. When you're in a hole you stop digging. The problems have only been compounded as the U.S. continues to lose real productive jobs and instead is full of paper pushing finance/insurance/real estate/education jobs.
I was thinking in terms of the "deflationary death spiral" being a problem for the Public Sector. I don't give a rats' ass that much what happens to them. They have more than half the GNP going through their sticky fingers year in and year out and they have to borrow to make payments on their debt. It's time for a death spiral. They first forced us to have two incomes to support a household, now many can't support a household at all. Everything they have worked at has come to naught. Death spirals can be good things and fun to watch too...
Amen to that; starve the beast. The biggest delusion is that there is a way out of this without pain. I'm for letting the market work and punish imprudent risk taking and am for not having moral hazards such as bailing out banks. And as I've reiterated a lot, inflation is the increase in the supply of money/credit. QE is inflation by definition. Without it and TARP banks would have been toast, which would have been a good thing as far as the viability of the economy and prospects for real, non paper-pushing 'growth'. The effect of rising prices that comes from inflation is vastly understated by the Bureau of Lying STATISTicians, and the other effect is the malinvestments due to distorted costs of capital. My favorite is during the debt ceiling bread and circuses in the fall, the 'non essential employees' were given leave. How many 'non essential employees' does the private sector get to have? (And as an anarcho-capitalist I believe any statist position is immoral and inefficient).