Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”.
“If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,” he said.
The Austrian School of Economics has been saying this would happen for years, and now I think it might. Here in Brazil there are talks about our government stop stocking US dollars, and they are probably discussing it all over the world.
Let the chips fall where they may. I am ready for it.
China wont let the dollar fall. They dont have any choice but to keep buying dollars
The Stock Market is the first bubble being inflated by all the trillions pumped into the money supply.
Dick Morris likened it to a rainy day when everyone remained inside the indoor parking garage…until it seemed like the rain would stop…then everyone comes out to drive = hyuper inflation once people feel the bottom has been reached.
Bush, Bernanke, Paulson, Geitner, Congress and Senate, should all go to jail for what they have done.
We could have let the rich lose their ass, on their stupid investments, and soundly run business, banks, brokers, etc would have risen…
Let the dead wood fall, and new growth appears…its healthy.
Instead, our country was taken over by Monopolists…and statists like it that way….
Yea, looks like we’re fucked. If only more people would have listened to Ron Paul…
…Maybe more people will listen to Ron Paul. He’s the only person in Washington who says exactly what he believes no matter what the question is. He also has been predicting this for just as long as all the Austrians have, probably because he follows the Austrian school of economics.
Seriously, maybe we should start listening to the people who have predicted all this and stop listening to all those idiots who couldn’t see it coming.
Oddly enough we’re still listening to the same people who said “everything is fine” and “we have a bright economic future ahead of us.”
Wake the fuck up.
Buy gold and silver, and pressure your representatives to allow competing currencies because it looks like it may get a little bumpy.
#4 Well said…especially the part about not listening to those who have been consistently wrong…whose responses have failed every time…
Some think statists want the collapse…that this explains the stupid stimulus bill and nationalization of industry, and the constant threat to raise taxes on energy and profits…all designed to obliterate new business formation…investment.
Considering how easy it would have been to fix the economy, its plausible…add to that all the Commie czars secretly changing the way things are done…and its more so
Deflation is what’s happening now and it will continue for the time being.
More
#6 The stock market isn’t deflating…
And deflation occurred as American rose to become the world’s premier economic industrial power…so I dispute the premise deflation is necessarily bad.
Hyperinflation is never good.
Price deflation is whats happening right now although that trend is changing in many markets.
Price deflation will continue if other countries decide to buy up all our dollars. However, we have and will continue to see monetary inflation. Those effects can only be ignored so long until it all comes crashing down.
If they stop buying our dollars and start dumping their dollars for other currencies and commodities then that “price deflation” is going to turn into rapid “price inflation”.
#1) You are by no means ready for all the pain this will cause. Nobody is.
#2) China can’t prevent the $ from falling. The American government has to do that and it isn’t. All China can do is try and protect themselves from the results as much as they can.
At which point in time Walmart and friends are going to find it’s not cheaper to buy things outside the states because the value of the dollar just tanked.
Fuel prices will go sky high because the dollar has tanked. Of course this will be true of everything we import such as appliances and electronics, even cloths and Obama and the Dems will have committed Obamascide on the US economy.
Of course the Republicans were heading the same way but this administration sped things up by several years.
Of course I’m sure they will blame it all on the privious adminsitration.
Fact 1) Congress does the spending and it has been Dem for many years now.
Fact 2) You play the hand you are dealt. If you had the brains to know you had a problem you act to prevent the worst possible outcomes and they aren’t/haven’t.
Congress has always acted on the assumption that future generations would be the ones to bare the pain and now it turns out to be us. When it comes to this overspending I’d say both parties are to blame but the Dems have a record of being absolutely demented rather than just completely irresponsible like the Republicans.
I’d say get rid of both parties but I don’t know how to do it.
#7, Alred1
Exactly.
Deflation is not inherently bad. In fact, deflation is a good thing. To put it simply, deflation is what the market does to correct the imbalances. The fed has been inflating the dollar relentlessly to make sure we don’t have any deflation for about 2 decades now. They are essentially trying to fight the market with a printing press.
What the Federal Reserve has been doing is the definition of economic suicide.
Actually, China changed over to this policy a few months back.
You didn’t notice, eh?
#3 – Alfred1 omitted the most obvious criminal in this entire fiasco. The man who turned on the printing presses to pay for his leftist unicorn boondoggles: Obama
The reason we’re seeing deflation despite the printing presses going nuts is because we really do have less money than we did 2 years ago. Recall that everyone had access to a tremendous amount of credit. Now that that credit is gone (or at least not in use), the amount of money is shrinking. If I can borrow 3X my income to buy a house, re-finance 2 years later to buy a car and pay off the furniture loans (and still get a lower monthly payment), that creates more money. If I have to put 20% down on a much smaller house that I might actually be able to afford, it takes a lot of that money away.
Oh, and the Chinese aren’t the only ones who think the Fed’s actions are borderline criminal. If banks need to re-capitalize so badly, why aren’t CD interest rates higher? Well, because they get a better deal from the Fed, so why bother to put a nice, safe investment in the hands of the average person with a few bucks saved up?
Pretty bad when Communists are teaching economics to the idiot Democrats running American government.
And it seems the Dem’s aren’t learning anything.
Heaven knows that Bush didn’t figure it out… but he was a amateur spender compared to Obama.
Remember this when oil returns to $150 a barrel, but only 50 Euro/barrel, not because of a recovery, but because the US dollar isn’t worth it.
I remember reading about south american countries with runaway inflation. The impression from the news sources was that these people’s governments were so rife with corruption that they were sinking under their own greed. To think that the US is immune to runaway inflation is just as stupid as thinking that foriegn interests won’t lose faith in the dollar. Get ready boys and girls, the hard times are only just begun.
It’s still not too late to emmigrate.
Caption this image:
“Make big money in your spare time.”
I won’t be long until the oil producing nations switch from basing a barrel of oil on the dollar to the euro. And when that happens you can expect the price of a gallon of gas to double, maybe even tipple. Price of electricity would soon follow that increase along with the price of food. We are not far of from having to spend ever dollar we make just to pay for fuel, heat/air, and food.
And we think Obama’s “Stimulus” is free money sent from Heaven.
When all is said and done, we will be so horrifically hurt (I give it a year) that we will all with the stimulus never happened.
Why? Because the value of the dollar will have tanked so badly (due to printing money to cover the stimulus) that everything will cost more:
Like Unimatrixo said.
The result of all this is an undeclared tax on all of us. Every one of us will pay more for food, gas, shelter, etc.
And it will hurt the poor the most. Those who can least afford the increase as a percentage of income.
Welcome to true cost of living in ObamaLand!
We will all wish the stimulus never happened.