Wrong again...M3(rate or otherwise) isnt falling...over past yr it has risen sharply...and to compare our situation to Japan's is ludicrous...they are one of the biggest creditors in the world and we are the biggest debtor in the world by far...their debt to GDP is just as bad as ours but unlike us, they have savings and are lenders, we are borrowers....big difference...only thing keeping our charade going is that the Fed's can fake data and keep us in the dark much better than anyone else...why do you think everyone is saying asia will be the big power over the next 50 yrs?
PIMCO, the largest bond holders and traders in the world by a huge margin(Bill Gross, El Elzarian) recently dumped all of their US treasuries....these guys are two of the smartest men in the world...what does that tell you about the future of our dollar?
And let me very clear what I think will happen over the next 5 yrs...when I say protests, Im not talking about a bunch of crazy kids marching the streets causing hell...you will see teachers, policeman and fireman protesting because the state pension plans are so underfunded right now they are on the brink...they will have to revise all the pensions that were promised to them and nothing pisses off people like broken promises when it comes to your money.
At some point, they wont be able to extend unemployment benefits for forever and thats when it will be clear how many people are really out of work...you will prob see tent cities go up in the cities...25% UE(measured the old way) is prob the breaking point....crime will go up.
When our national debt reaches above 15-16T the bond mkt will demand higher yields...in order to meet the higher interest rates we will print more money exacerbating the whole problem even further...gas will be over 5.00 a gallon and this will cause most of society to get more involved as the price at the pump doesnt lie.
The protesters will be seen as terrorists and our military will be used against our own people...gonna get ugly.
Am I saying society will completely collapse?...no...but it will be different than anything we have seen before.
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Originally Posted by BTM
Last year it was oh no deflation! Now it's impending hyperinflation! How about, it's been a (somewhat volatile) year and a half of economic stagnation...because that's what it has been. You can list however many economic commentators as you want, I can list just as many who disagree. I'll be happy to eat my words if there is an American revolution within 5yrs. I have a pretty strong feeling I won't have to. I am assuming you're using this number more or less based on the 2014 deadline put forth by John Williams, a man who's made a career out of forecasting apocalyptic economic outcomes for a while now.
Too bad we've had bubbles before, with paper money, and survived them all just fine. Consumer inflation has not rapidly increased as you (and Williams) are predicting it will. If you wanna look at a country who's had prolonged deficit without inflation, take a look at Japan, who's demographic make-up is not all that far removed from the US. While growing in aggregation, M3 as a rate is falling annually. The dollar's short term reserve status is hardly as precarious as you say
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