LOL that's a great video. Rogers finally gets called on his "Just let all the banks fail, stop bailing them out" BS and then the next second says the "the Great Depressoin was caused by bank runs where people pulled all their deposits from banks". What a tool.
I love how everyone argues default (deflation) vs. technical default (hyperinflation). I hope everyone understands it's only a nuance between the two and deflation is the preferable to the two, especially from a political/social perspective. **Deflation**
for the few in the US who saves thats a bad thing(maybe it isn't even bad if they get protection). for the majority of americans what they lose in PP they gain on their debt that got inflated away, so on net its not terrible. the world has been in a debt orgy since ww2, it needs to be solved through inflation, or its the end of the world
The Malaka's of ET miss the most salient point. With stratospheric global government debt levels-unlike 1929 America- the risk of failure by any number of governments is on high alert. Do the math: High debt+increasing obligations+ stagnant wages+ higher cost of essentials eating up disposable income+tax payers with no elasticity to pay more=default city. For all the ballyhoo of "falling" commodity prices they've only filled in the parabolic rally portion of the past couple of years. Commodity prices on the most part are still above their multi decade breakout levels.
Thats nice Pabst..really it is. But lets get to the real point and something of much more importance.... Who do you like in The Breeders Cup Turf Sprint on Saturday?
I think this is completely the wrong way to think about this, inflation seems like the answer but if everyone inflates then it ends up being an exercise in futility. The real answer is growth. The only real way out of the global economic crisis is massive multi decade growth and it is more than possible given how far the world is from its PPF.
economy growth is very much tied to productivity growth. productivity through US history(as measured by output per hour) has averaged 3% per year, bet it through war time, inflation, deflation, democrats, republicans, whatever. It cant get any higher than that because humans apparently arent smarter than that, just because the US needs it to be higher now it doesnt mean it will be. solvency after a 70 year debt spree can only be achived through inflation. I'm not putting on the inflation trade for the next year or two but after that it should be easy money. the next wave for the commodity boom should ridiculous, it will reminds us of nasdaq