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Napanee, Ontario | Are you Paul Krugman?? haha, just messing around. but seriously thanks for taking the time to read that post, and to others as well. I wanted to edit it down some, and I did a bit, because it was really a bit much to read. And I know it takes time to go through a book like those sometimes, so appreciate the consideration. I reposed here because it was kind of getting buried down there.
On your points, I guess i will start off at the beginning.... your reference to the "economy [being] so underutilized".....
i would put back - "underutilized or defunct"? If we are talking the unused mfg and industrial production that is available...remember why it left: because it was cheaper to do elsewhere.
Economic demand is still being met with production, just not in the US. That isn't idled supply that overhangs, that is defunct supply. It's gone, - outdated and overpriced help. Fx changes, regulatory provisions and tax incentives and requirements change all contribute too, both ways. Labor only becomes cheaper if the dollar declines, or if household income (wages) continues to drop as it's doing.
So ya, everyone can have a job that pays you in both a worthless currency, and also not very much of it. Sadly, this is the model for the others too like Bank of Japan where they come right out and tell you they are trying to destroy the currency with inflation to get export driven employment back. Welcome to the 21 century - battle for the jobs through currency wars.
"print money and risk inflation"
No, they are targeting inflation, they are not risking it, they are intending it - at 2 some odd percent. The problem is how inflation is measured, namely neglecting certain areas of spending - esp investment and trading assets, real property, among others. This is of course where all the inflation has gone - because that's where the new money has gone. It didn't get circulated to Joe public. Who, btw have a smaller and smaller slice of these assets due to their declining household wage rate against the "targeted" inflation.
You mention Three possibilities for a solution.... well how about a 4th?
The one where we let the chips fall where they should have back on that fateful September day. Instead of printing trillions to bail out the govt, the banks and the rich equity/ bondholders of the system, the folks who took a business risk just like you and I , and failed, why not take that money and give it directly to the people? Maybe pay off some of that 17 trillion that our grandchildren will still be shelling out for 75 years from now.
"That North America is still functioning is a testament to Bernake and his style. Thank God "
A testament to the shrewdness't of Bernanke? By printing money and running up the price of assets so the rich can get even richer? Don't get me wrong, low interest rates havn't hurt farmers' assets either. But there are a lot more people that are choking this "distortion in incomes" down every single day it continues. And that number of people is increasing. This era will go down as a hallmark of social folly to commence the millennium and serve as a bold reminder to our descendants in the ages to come of just how far off the path we can get.
i can just see some kid making a history class slideshow somewhere out in the year 2114 and the music playing in the background for the years 2000-2015 will be Money for Nuthin by Dire Straits.
http://www.youtube.com/watch?v=iwDDswGsJ60&feature=kp
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Redman..from below.
