Comments on: This Just In: Government to Borrow More Than $500 Billion

By: miranda

miranda — Wed, 05 Nov 2008 12:27:36 +0000

You probably have a good point. Especially about inflation. I’ve been worried about that as well. With so much “money” being put into the system, it seems inevitable that we’re going to end up with inflation issues.

By: Lindsay

Lindsay — Wed, 05 Nov 2008 09:15:08 +0000

I doubt tax increases will be that noticeable. They’ll just keep on the road they’ve been on: devalue the dollar so they can pay their debts.

The CPI hasn’t been an accurate reflection of inflation for a long time (all sorts of govt manipulations make it next to worthless), and I’ve heard various experts estimate the real rate of inflation at anything from 10-15%. That was *before* they agreed to pump all this newly made money into the system.

Inflation is the hidden tax we’ll all pay, and as usual it’ll hurt the middle class most of all.

By: miranda

miranda — Mon, 03 Nov 2008 22:00:07 +0000

Yeah it is pretty crazy. And I’m heading over to check out your post :)

By: Moyo

Moyo — Mon, 03 Nov 2008 21:58:48 +0000

“There isn’t even PAPER money to cover the “wealth” circulating out there”- That is right on the money!
You know what’s funny, we’ve been told that these policies wouldn’t be monetized, and i’m like “yeah right!”, that’s the same way Mr. Paulson told us 6 months ago there wasn’t any housing crisis!

On the point of the Chinese IOU, i’m of the opinion that these guys would wake up soon enough and realize that they cant go on this way lending money to the US and having the US spend money like…..u know the rest!

i have a post on shorting US treasuries on my blog, it is related to this whole China burrowing craze. let me know if you’re interested

By: miranda

miranda — Mon, 03 Nov 2008 21:50:49 +0000

Thanks! *Grins at intellectual stroke* At any rate, the scary thing is that we’re at the point where money comes from nowhere. We keep saying we’re borrowing it. And we throw out numbers, but really, it’s just us saying it. There isn’t even PAPER money to cover the “wealth” circulating out there, and we were behind on having hard assets to back the paper money.

Bottom line: It’s all data and numbers and pulled out of nowhere. But as long as China and other creditors accept our I.O.U., then it works as currency (albeit inflated and expensive currency).

By: Moyo

Moyo — Mon, 03 Nov 2008 21:47:00 +0000

Geez…there are smart people around! I vote you for Fed chairman, or at least a member :-)

but really…i’ve always asked the question “where is all this money going to come from”….and we here there’s a proposition for another stimulus package, and i’m like, from what deposit account?