For the foreseeable future, deficits will be measured in trillions, not billions. To put these vast sums into perspective, consider just one billion, or one thousandth of a trillion. A billion minutes ago, Jesus was alive. A billion hours ago, humankind was in the Stone Age. But in just the past eight hours and twenty minutes, even before Obama’s budget clicks in, the Government has spent $1 billion! FULL ARTICLE
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4 comments ↓
Not really sure what the future will bring – especially relative to other currencies and other countries’ economies – but what I do know is pretty straightforward….you don’t fix a problem caused by too much spending, debt and inflation – with more spending, debt and inflation
What’s going to happen to our purchasing power when all this new money starts circulating through the economy? I think the dollar is toast – and none too soon.
Good Commentary:
I am surprised by the dollar’s rally as well.
Remember last summer when oil climbed over $140 a barrel, and the prices of commodities soared? Yet there were no lines at the pumps for gas, or shortages of foodstuffs. Investors were fleeing the dollar, and seeking a refuge in commodities.
The run-up in prices finally collapsed when speculators realized that the collapsing economies were hurting demand for commodities.
Today we have a deficit of $1.75 trillion, and the Fed is monetizing derivatives contracts. And the dollar is rallying, go figure. The only thing holding up the dollar right now is fear.
But it won’t last.
Global investors have no other safe haven for now. Europe’s troubles are even worse than ours, so the Euro is in real trouble. The real winner of this will of course be the Chinese yuan, as soon as they float their currency on the world market.
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Scott, I think you’ve hit the nail on the head here. The Yuan is set to explode if they let it float. Not an easy currency to invest in unless you’re going with something like the Merk Asian currency mutual fund, but it’s possible. The Chinese, if they’re smart, will at some point start focusing in building their internal economy, and when that happens, it won’t be dangerous to have an expensive Yuan, because they’ll be able to produce, sell, and consume their own product internally.
That’s an economic powerhouse.
Meanwhile, here in the US, our idiotic leaders are telling us to take on more debt, buy up toxic US stocks, and save nothing.
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