You had just $200 (or had 500, but wasted 300 somewhere else). It’s your mistake you stayed in $500 room. Acknowledging mistake is a good thing.
Do a good thing today.
Not much different from inflation eroding the buying power of dollars when the government just prints more money to meet its debts and I don’t recall all this sturm und drang from the left when that happens. At least with debt regotiation people will know exactly how much buying power they’re going to be left with vs. runaway inflation with no definite end.
Wait wait wait.
- Trump carries out his plan. All treasury holders take 70 cents on the dollar
- Interest rates increase 100%+ if we can borrow at all
- Government can’t borrow nor inflate
- Government has to shrink to size of bathtub
- Grover Norquist finally gets to drown it
GENIUS!
Pick sane. Not being sober might help you understand this rubbish.
Or not.
I’d say Trump’s idea is a good bit different than inflation. And where do you live that you’re seeing runaway inflation? Here in the United States it’s less than one percent.
You got the order wrong. The bank run happens when Trump opens his fat mouth and says that bankruptcy hasn’t failed him yet, not when he actually carries out his idiotic plan.
Exactly. Right now, US government debt pays just about the lowest interest rates because it’s the safest investment in the world. Those ultra-low interest rates disappear just as soon as people lose confidence that they’ll get 100% of their money back.
Actual tipping point is probably when/if a critial mass of people decide he’s likely to get elected.
It is now. But I’ve seen it as high as 18% in the spring of 1980 and everything in between. And yet somehow I don’t recall all this handwringing over people losing investment value and the world’s economy crashing. Perhaps because a Democrat was in the White House?
U.S. inflation rates 1914-2016(March)
He will probably just take us public and raise money by issuing stock. Everyone knows you can make more money on stocks than bonds!
Have you seen how Trump runs his businesses? For the most part, he gets other people to invest their money with the backing of his “brand” as his security, and then if the business goes south he pulls out whatever equity he might have or declares bankruptcy and then calls the people who lose their investment in his business, “looosahs”. Donald Trump can’t even run a business like a (successful) business. He’s about two rungs down he ladder from Bernie Madoff.
But lets be clear: most presidents have had a pretty tenuous grasp on macroeconomics. Reagan thought the Laffer Curve was the end-all, be-all. Nixon liked wage freezes and price controls to address inflation and effectively undermined the Bretton Woods system. Clinton dismantled Johnson’s Great Society reforms intended to combat chronic poverty (which admittedly were largely a failure) without replacing it with anything else, or even an effective monitoring system to see how families were affected, as well as presiding over the deregulation of investment banking that led to the 2007 home mortgage meltdown. Trump’s ideas about financing public debt as a hedge against deflation and economic underperformance is at best naive and potentially as ruinous as any economic policy ever espoused by a presidential administration, but it isn’t as if he isn’t in good company. And it is still more of a plan than Bernie Sanders can bluster out.
I absolutely cannot believe that I am coming around to the position that Hillary Clinton may be our best, last hope for a rational administration for the next four years. I don’t have any faith that the words coming out of her mouth reflect her actual beliefs, but at least she can form complete sentences that convey actual policy intent that reflects some view of reality. It’s like playing Liar, Thief, Idiot.
Stranger
It may have leveled out over the month but I definitely remember it hitting 18% at one point.
And what was the rate the US government was paying on its debt at that time?
This is what I’ve been telling people. Thanks for the Bernie Madoff comparison.
problem with “run government like a business” is that business has one motive: profit. Government has (mainly) another motive: to benefit many people. I’m amazed how some of these “we need a bizman types” don’t get that.
Certainly, some loan rates may well have hit 18%, but inflation will be different from that.
Any of the regularly used measures of inflation will have been tabulated on a monthly basis, which never got past 15%, much less 18% since the '50s. I’m not even sure where you’d see a instantaneous or daily measure of inflation, at least one that could even remotely be considered trustworthy.
Maybe you’re thinking energy prices? During the crisis, oil peaked either in Dec '79 or Jan '80 and probably was up 18% if not higher back then before falling by double digit percentages after. Another example of why excluding food and energy prices is a reasonable thing when doing inflation analyses - too volatile.
Could have been energy prices. I’m on my phone now but I’ll look into it later when I get home.
Great… he’s taking a page from my island’s governor, whose position on default is to portray that the bond holders are all outsider hedge fund speculators and then say “I could’t care less what the markets say, I’ll rather pay my police and teacher salaries than outsiders” and demanding everyone come to the table already having capitulated to a giant haircut. (Hint: it ain’t making anything better.)
To be fair, many US and international politicians and bankers do play the game that the USA is the ultimate Too Big To Fail outfit and nobody will dare find out what happens because if we go down, everyone goes down. That’s another whole semester.
I believe what you remember is the interest rate peak. The Prime Rate stayed above 16% from November 1980 to November 1981, with loan rates peaking as high as 21.5
Energy prices were wild in 1973-74 and 1979-80, the first time around oil prices quadrupled when the smoke had cleared.
Also from the linked inflation table I see this (month by month numbers)
1973 3.6 3.9 4.6 5.1 5.5 6.0 5.7 7.4 7.4 7.8 8.3 8.7 6.2
1974 9.4 10.0 10.4 10.1 10.7 10.9 11.5 10.9 11.9 12.1 12.2 12.3 11.0
1975 11.8 11.2 10.3 10.2 9.5 9.4 9.7 8.6 7.9 7.4 7.4 6.9 9.1
1976 6.7 6.3 6.1 6.0 6.2 6.0 5.4 5.7 5.5 5.5 4.9 4.9 5.8
1977 5.2 5.9 6.4 7.0 6.7 6.9 6.8 6.6 6.6 6.4 6.7 6.7 6.5
1978 6.8 6.4 6.6 6.5 7.0 7.4 7.7 7.8 8.3 8.9 8.9 9.0 7.6
1979 9.3 9.9 10.1 10.5 10.9 10.9 11.3 11.8 12.2 12.1 12.6 13.3 11.3
1980 13.9 14.2 14.8 14.7 14.4 14.4 13.1 12.9 12.6 12.8 12.6 12.5 13.5
1981 11.8 11.4 10.5 10.0 9.8 9.6 10.8 10.8 11.0 10.1 9.6 8.9 10.3
1982 8.4 7.6 6.8 6.5 6.7 7.1 6.4 5.9 5.0 5.1 4.6 3.8 6.2
The two inflation spikes (74-75 and 79-81) tend to coincide with the aftermaths of oil/energy crises. The 1970s in general sucked well before Carter and lest we forget the 1982 cool-off included unemployment above 10%.
That almost 40 years later people are still hung up on it as proving something about Carter is, as Mr. Spock would say, “fascinating”.