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I think the only thing left here is to start a real inflation going. I am not takling about 2% but more like 20% for a couple of years. This way the system will be purged of debtUnfortunately, a pleasant reflation is not one of the options before the policy makers. The only two choices are either a long-term deflationary depression (i.e. where the dollar gains significantly in value against ALL assets) or hyper-inflation (i.e. where th dollar is destroyed almost overnight).If the Fed or Treasury actually started to print money to any significant degree (which they are not doing today), the dollar would become worthless within a week as investors around the world immediately moved their assets our of the greenback. Worse,the US government would be unable to finance its operations anymore since demand for T-bills would have vanished.This (i.e. the destruction of the dollar) is simply not an option any policy maker wants to have occur under their watch.This is why I believe we are going to be facing a massive deflation, where the dollar appreciates massively against nearly every asset there is (e.g. real-estate, stocks, precious metals, commodities). There is just no way to avoid deflation when there are massive amounts of non-performing private debt that need to be unwound. Japan had found this out the hard way over the last 20 years.I have outlned the case for deflation with an in-depth podcast:bit.ly/YlmXD Rate this comment: 0 0
By: | Mar 12, 2014 | Report Comment
starwithsomethig
bocmes | Region 4
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