1980 US was creditor nation. Today, a massive debtor nation. You will have civil unrest, if the 1980 solution is implemented, today. It may happen, regardless.
Yes, civil unrest is likely. After all, greedy little tit-suckers "want their money, regardless". But civil unrest ain't nothin' compared to the bankruptcy of nearly all US citizens which will inevitably result when the world cries "No Mas" to US debt.
I have no problem with them jacking rates up, in fact that is probably what needs to be done, even with the consequences. I just don't think it would fly in the current environment until the current Fed leadership is removed and hawks installed to force the gutless politicians to take action.
"Fly or not"... we don't have a comfortable choice. Either we acknowledge and "voluntarily take our medicine" or press forth in denial and have the world SHOVE A TELEPHONE POLE UP OUR COLLECTIVE ASSES... which will be fatal to nearly all of us.
No answer to my question regarding what you think would have happened had the Fed done nothing during the collapse? You shouldn't be speaking so definitively about a subject you have no knowledge on.
There would have been A LOT of pain and I mean A LOT. But believe me, things would have sorted themselves out and the economy would be in far better shape right now. The alternative is what we're going to get between now and 2015 - FAR MORE PAIN THAN ANYONE CAN IMAGINE. The Fed creates these problems then it 'comes to the rescue' before creating further, bigger problems. This nasty chain reaction has to stop. C'mon America, many in the world might not be your biggest fans any more, but that doesn't mean we haven't still got a soft spot for ya
So far things are going more or less as the Fed intended. That's true. There was, however, never any significant deflation in the overall economy. Officially we went briefly to near zero or just slightly below. Deflation in the real estate building sector and in some commodities was balanced with inflation elsewhere in medical costs, insurance, services, food, etc.. When the official figure recovered to about 2+% we were at 5 to 6% overall when food and energy was included. Sadly we can not eat our houses or burn wood in our cars. We should go to low double digit inflation overall, if we are not there already. This will nicely goose the market, but of course it is not real wealth, just the illusion. Then you might begin to recognize a problem if your income fails to keep up. But perhaps you work for Goldman Sachs, in which case don't worry, you'll be fine. We tax payers will see to it that you are well treated.
inflation in China is on the rise. it's only matter of time for USA,since all the shit that we have here is made in China. i'm pretty certain that they will pass some of the cost on their customers worldwide. we have seen food prices on rise,soon you will see rise in price on everything. but it's sad to see ,how US Fed is literally raping their own citizens with low rates and high food prices,while saying there is no inflation..what a BS..milk is my favored gauge...up 25% in less than a year. look at interest rates and inflation rates worldwide - http://www.tradingeconomics.com/World-Economy/Maps.aspx in many countries interests rates are above even official inflation rates. which is imo good for their savvy citizens,UK raped the most out of developed countries on huge spread between interest and inflation rates US gvt along with Fed is in total denial once again..sad sad sad..