[QUOTE=Chimera]
I’ve been saying for more than 10 years that the end result of our current Dollar policies is HyperInflation, ala the German Mark of 1922-1923. The only real questions are how long before it happens and whether or not other world currencies are likewise affected (take a look at some of the European debt levels).
[/QUOTE]
There’s a guy near my work who has been predicting that God’s wrath will soon destroy the filthy and hedonistic United States. It is only a matter of time.
Seriously, if somebody has been predicting something being just around the corner for a long time – whether it be food capsules, faster than light travel, financial ruin, or whatever – odds are that your assumptions are wrong.
[QUOTE=Grey]
Just a quick aside, but do you Americans never get tired of predicting the collapse of the your country, economy or freedoms? Likely it’s just the board but god you go on and on about impending doom like there’s no tomorrow.
[/QUOTE]
[QUOTE=Chimera]
I’ve been saying for more than 10 years that the end result of our current Dollar policies is HyperInflation, ala the German Mark of 1922-1923.
[/QUOTE]
[QUOTE=Duck Duck Goose]
That’s the bit that stuck in my head, the “needing a dime to buy a head of lettuce”. So I dutifully kept a box of coins around, and I still have them to this day, damn him, I can’t get rid of the need to keep a shoebox full of coins for when our entire economic system collapses and I need actual coins to buy food.
[/QUOTE]
That’s why I have all those coins in my purse, too. And the ten-pound note in my wallet. They’re my hedge against the collapse of the economic system, I tell you.
Eh- really, they’re because I’m too lazy to go to the bank and change the ten-pound note (which I’ve had for at least four years, since that was the last time I was in the UK) or find a Coinstar machine to deal with the change.
I figure it this way: It’s very likely that the people who, in good economic times, predict that the fundamental nature of the economy has changed, that stock or housing prices will go up and up forever and that recessions are a thing of the past, are wrong. It’s also very unlikely that the people predicting doom and gloom and the total collapse of the dollar and what-not are wrong. There’s a chance that either of them are right this time, but that’s not the way to bet.
Also, historical parallels aren’t really parallel. You can use parallels to some historical situation somewhere in the world to say pretty much anything you want about any current situation.
[QUOTE=Grey]
Just a quick aside, but do you Americans never get tired of predicting the collapse of the your country, economy or freedoms? Likely it’s just the board but god you go on and on about impending doom like there’s no tomorrow.
[/QUOTE]
Apparently not. I think you hit the nail on the head here. We’re hopelessly self-absorbed.
Given enough time, anything is possible. To put it another way: if you’re unwilling to put a specific time frame on this and to back up that time frame with a coherent argument, then that’s an empty statement.
As an aside, can someone explain to me how hyperinflation is even possible? I can understand sky-high inflation rates, and currency devaluations that happen overnight. But what I can’t understand is how hyperinflation where prices change on a daily basis can last more than a few days before people stop accepting the currency at all. It seems that hyperinflation requires some sort of predictablility in it to last more than a week or two, unless you’ve got a government that requires acceptance of the currency literally at the point of a gun. But in that case, it’s functionally equivalent to the government simply stealing the goods at the point of a gun and giving nothing in return except worthless paper scraps.
[QUOTE=Grey]
Just a quick aside, but do you Americans never get tired of predicting the collapse of the your country, economy or freedoms? Likely it’s just the board but god you go on and on about impending doom like there’s no tomorrow.
[/QUOTE]
I think the reason for all of that is simple. Impending doom sells books and newspapers and gets people to watch TV news.
[QUOTE=John Mace]
Apparently not. I think you hit the nail on the head here. We’re hopelessly self-absorbed.
[/quote]
Oh I think we Canadians could give you a run for the money but the fixation on “Doom in America” I see on this board is just weird.
[QUOTE=John Mace]
Given enough time, anything is possible. To put it another way: if you’re unwilling to put a specific time frame on this and to back up that time frame with a coherent argument, then that’s an empty statement.
[/QUOTE]
I’ve never felt it necessary to specify a date that this will happen. In fact, Monetary Policy since I started feeling this way has only become increasingly likely to lead to something akin to this result, as we’ve seen the dotcom bubble, then the housing bubble, coming soon the next bubble, probably commodities but I wouldn’t bank on them bursting the same way (meaning that there is too much money floating about chasing after different things in succession) …along with a serious decline in the value of the Dollar vis foreign currency.
So perhaps maybe we won’t see 1922 German/00’s Zimbabwe style “paper money = toilet paper” degrees of hyperinflation, but we may well reach a point where we see multiple years of double digit inflation, loss of wealth and an eventual realignment of the “Dollar” similar to past efforts with the Mexican Peso and other currencies.
Sure, that’s possible. But we’ve had pretty low inflation since the 80s. If we’ve been mismanaging our economy for the last 3 decades since the 70s, how did we whip inflation? And another 70s style inflation crisis would be bad, but it’s not collapse of Rome bad, or even Great Depression bad.
Three decades of little change is not indicative of a similar rate of change in the future. Just ask the people who took out ARMs when fixed rate mortgages were at historic lows. Low inflation through the last 20+ years has been achieved in a significant part by squeezing suppliers to keep costs low, through outsourcing to virtual slave-labor producers and every other trick in the book to avoid paying higher costs for goods.
At some point, those tricks fail. Just look at China. Prices and wages are now raising at rates significant enough to cause real price increases here as well as leading the middle men to begin casting about for the next low cost providers (like Vietnam).
The other, very real long term effect of increasing wealth of formerly impoverished nations (such as China and India) is the increasing demand for the same raw materials and commodities that we formerly purchased on the cheap and/or were quite handily capable of maintaining low prices for. Copper, Steel and other metals are going through the roof because we don’t just have a half billion First World Consumers and 5.5 billion Impoverished anymore. Billions are crawling out of abject poverty and seeking the same wealth we have. Likewise with Coal and Oil as those people’s power needs rises, likewise Corn and Soybeans as their diets improve. All this means that real prices of a lot of things that we’ve taken for granted as being relatively cheap, are in the process of rising, and that is going to carry through the entire chain.
On the other side of the coin, we have trillions of illusory Dollars held up in debt/debtor status around the world. While a lot of it does real good for the owner states, allowing them to improve their infrastructure and standards of living, we’re reaching a point where large amounts of it simply cannot be redeemed. I just don’t see how China can successfully turn over more than a trillion dollars of US promisary notes at this point.
(The positive side of that is that our economies are so interconnected and interdependent that War would be economically ruinous to both sides.)
At the end of the day, that’s the Ponzi scheme. The Chinese and OPEC have taken in so many Dollars that they have an serious interest in maintaining the value of the Dollar, at the risk of destroying nearly everything they’ve gained if they were to, as some powers (Iran) have suggested, simply dump the dollar. There’s nowhere to ‘dump’ those dollars, people, without rendering them worthless.
[QUOTE=Lemur866]
As an aside, can someone explain to me how hyperinflation is even possible? I can understand sky-high inflation rates, and currency devaluations that happen overnight. But what I can’t understand is how hyperinflation where prices change on a daily basis can last more than a few days before people stop accepting the currency at all. It seems that hyperinflation requires some sort of predictablility in it to last more than a week or two, unless you’ve got a government that requires acceptance of the currency literally at the point of a gun. But in that case, it’s functionally equivalent to the government simply stealing the goods at the point of a gun and giving nothing in return except worthless paper scraps.
[/QUOTE]
The problem is that the government is just issuing paper across the board, i.e. every body has access to it. Granted, in today’s modern economy, especially as one as sophisticated as the US where paper money isn’t as widely used, hyperinflation will probably be short-lived as the US economy will just be in utter collapse and will be bailed out by IMF and the World Bank, then the rest of the wold goes to hell (or it might have happened before, but I digress…)
It also depends on the definition of hyperinflation (see wiki). If it’s one of those that happens over the course of the year, then the government can better respond by printing more money. But, at that point, I think everyone around will know what’s happening and there will be other problems, like riots on the street, food shortages, gas lines, and massive, massive civil unrest.
[QUOTE=FoieGrasIsEvil]
Is medicare only available for those that make under a certain amount? I think that is so, if I’m not mistaken.
[/QUOTE]
According to Wikipedia, Medicare is available to US citizens and legal residents over 65. Medicaid is probably what you were thinking of; it is limited to people of lower income.
[QUOTE=FoieGrasIsEvil]
Is medicare only available for those that make under a certain amount? I think that is so, if I’m not mistaken.
I keep floating the idea that people of retirement age that are eligible for Social Security should not receive a government check if they and their assets are worth over X amount of dollars, ergo, they can afford to live comfortably without any government assistance and those that have enough money can be forced to forego their SS checks in favor of people that actually NEED it to get by.
Many baby boomers are well to do. They should have insurance, pay for their own healthcare and not collect Social Security.
[/QUOTE]
There are a couple of problems with this. Theoretically, at least, Social Security is something you’re supposed to get back after decades of paying into it. It’s not just a gift from the government to the undeserving. Secondly, given the rating and underwriting practices of the health insurance industry, I doubt that most people over 65 could buy their own insurance, given that they often have a basket-full of various maladies that they need treatment for. Sure, a retired couple might have been successful and prudent enough in their working life to have put a million or so by for their golden years, but a couple of serious illnesses could wipe most of that out if they had to pay out of pocket.
[QUOTE=Duck Duck Goose]
Oh baby. A blast from the past.
Back in the early to mid-70s some guy wrote a book (sorry, can’t remember the title) that predicted a similar catastrophic collapse. Perfectly terrifying book–to a naive 21-year-old. Among other things, he predicted (I remember this bit quite clearly) that paper money would be worthless, and that coins would be almost literally worth their weight in gold, and that you’d have to have a silver dime, an actual dime, to buy a head of lettuce. That’s the bit that stuck in my head, the “needing a dime to buy a head of lettuce”. So I dutifully kept a box of coins around, and I still have them to this day, damn him, I can’t get rid of the need to keep a shoebox full of coins for when our entire economic system collapses and I need actual coins to buy food.
I also tried to learn how to bake bread, for the same reason. Our financial house of cards was going to collapse and we’d all be back to the Stone Age, and if you wanted bread, you’d have to make it yourself.
So the point is, this is yet another pundit. Heard it before. Not much has changed except that the bottom-line numbers are bigger, but the mechanism of American debt remains pretty much the same.
[/QUOTE]
If you saved your silver dimes you are making out quite well now.