Saturday, August 29, 2009

Deficits are Bad

This is why I do not like the US running federal deficits. This is why I do not like running massive deficits on "stimulus plans" that have no positive, sustainable impact (Bush in '08 & Obama in '09). This is why I say no to public option govt healthcare right now. Japan is a huge buyer of our debt. If they pull the plug, it's a nosedive for the currency. If the currency nosedives, we have an Argentina in 2001 situation where the dollar loses 20-50% of value quickly. If the USA issues debt in another currency besides the US dollar, we are screwed as well since we will not be able to inflate our way out of debt. Look at the pie chart in the column. If Japan will not accept the debt in US dollars, then how could we say no to China, Saudi Arabia or Kuwait? When your sovereign debt is in another currency, then you are open to hyperinflation. This is important. One of the concepts that we base modern society on is having a medium of exchange we can trust.You can't form any meaningful contract without trusting the means of compensation.

Check out www.zerohedge.com. It has quickly risen up to my #1 spot for finance discussions, government-wall st crony connection exposing, and investigative posts on the shenanigans going on today. A good sign is that the mainstream media is constantly trying to out who is Tyler Durden and discredit him... even though different people use that moniker to post.

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