| John Burns - 1/29/2016 20:51
You are correct, in my opinion, that deflation is the default to correct a credit expansion phase. The only other alternative is the destruction of the currency if the credit expansion is continued until the point the currency is debased so much people are no longer willing to hold the currency for any length of time because it is loosing its purchasing power so rapidly.
John
And, wouldn't you agree that destruction of the currency would be an absolute last option chosen? Think about what that would entail - not only for most of us, but for the people making the decisions.
A quote from the "gobeldegook" (g):
"America’s private debt/income ratio has fallen slightly, to its level in 2004 (see the graph). It probably will drop far more during the next generation. Doing so by rapid economic growth seems unlikely (unless the Third Industrial Revolution kicks in soon). The only alternatives are deleveraging through fast defaults or slowly working it down. We might not get to choose." |
John, another look at where we have come to
