|
Central Missouri | Inflation is an event where not enough goods are chased by too much money. That doesn't look to be the problem. Hyper-inflation on the other hand is a currency event caused by the debasement of the currency due to printing whether it be printing the paper bills or injecting electronic money in the system. Hyper inflation due to currency devaluation will continue to be the concern forward and here is why. The foreign countries that are financing our debt by purchases of bonds/bills/notes and agency debt are becoming unsettled and here is why:
These numbers aren't exact but are used for illustration.... The U.S. had to finance lets say 2 trillion of debt this past year. Well next year we wiull have to finance roughly the same amount plus the amount of our deficit. The year after that we have to finance that amount plus the next years debt. Who is gonna buy all of that. In 2 years its gonna be an extra 2.5 trillion. Well if we can't sell the bonds/bills/notes then the Fed monetizes it by the federal reserve buying the bonds/bills/notes..
That is just electronic printing and creating money out of no where and devalues every dollar that is in the system already. No wealth was created to back-up that money so it devalues. So yes a loaf of bread could cost 6 dollars not because there isn't enough bread but because the maker of the bread demands 6 dollars because the dollars are worth less due to all of dollar devaluation. The fed buying the tresuries bonds/bills/notes is called quantitative easing and there doesn't seem to be an end in site for 2 reasons.
1. The congress/whitehouse has no intention of reducing the budget on the contrary they are increasing it. All to get re-elected and force through a socialist agenda
2. Receipts to the treasury aren't going to increase any time soon due to a contracting economy. Income tax both personal and corporate are way down on bothe the fed and state level. That can't change unless the economy grows or taxes or raised. | |
|
Debt and deflation
