Report: debt undermines US economy

[tcaudilllg]

http://www.cnn.com/money/2011/06/08/...yment/?cnn=yes

Is is time to just write off old debts? Apparently, people aren't spending because they are still paying off their debts. Economists (well, INTPs) have projected this process to take about five to six more years. So that means five to six more years of high unemployment.

What I think is this: the people who run these oligarchic businesses (many of whom received tax payer bailouts) are deliberately scaling back their product until they get what they are owed. And yet... they've already been paid back what they are truly owed... what they are being paid now, is the enormous interest created by their weak hiring.

These people are nothing but thugs. The government stands dysfunctional and unable to act. I approve vigilante justice to strike fear into the hearts of these people and coerce them to begin hiring. Obama has no one but himself to blame for his failure to act. It is his fault that law and order are breaking down in the United States. He alone bears responsibility for failing to defend the national interest.

[tcaudilllg]

updated with link and commentary.

[Korpsy Knievel]

updated with link and commentary.

You forgot the list of INTPs, O all-seeing eye.

[Anonymous]

http://www.cnn.com/money/2011/06/08/...yment/?cnn=yes

Is is time to just write off old debts? Apparently, people aren't spending because they are still paying off their debts. Economists (well, INTPs) have projected this process to take about five to six more years. So that means five to six more years of high unemployment.

What I think is this: the people who run these oligarchic businesses (many of whom received tax payer bailouts) are deliberately scaling back their product until they get what they are owed. And yet... they've already been paid back what they are truly owed... what they are being paid now, is the enormous interest created by their weak hiring.

These people are nothing but thugs. The government stands dysfunctional and unable to act. I approve vigilante justice to strike fear into the hearts of these people and coerce them to begin hiring. Obama has no one but himself to blame for his failure to act. It is his fault that law and order are breaking down in the United States. He alone bears responsibility for failing to defend the national interest.

Debt does not undermine the U.S economy. The U.S economy is primarily based around debt. Every bit of money in circulation (90% of it is an abstraction which exists on a computer) is a debt owed to a private lender. When banks cease giving out loans it results in a crisis because the amount of money in circulation stagnates and money becomes a commodity in which there is not enough to go around. This is known as 'deflation'. One does not need a degree in economics to understand that those who control the money supply control the destiny of a nation.

I believe Rome had a similar issue.

[Adam Strange]

http://www.cnn.com/money/2011/06/08/...yment/?cnn=yes

Is is time to just write off old debts? Apparently, people aren't spending because they are still paying off their debts. Economists (well, INTPs) have projected this process to take about five to six more years. So that means five to six more years of high unemployment.

What I think is this: the people who run these oligarchic businesses (many of whom received tax payer bailouts) are deliberately scaling back their product until they get what they are owed. And yet... they've already been paid back what they are truly owed... what they are being paid now, is the enormous interest created by their weak hiring.

These people are nothing but thugs. The government stands dysfunctional and unable to act. I approve vigilante justice to strike fear into the hearts of these people and coerce them to begin hiring. Obama has no one but himself to blame for his failure to act. It is his fault that law and order are breaking down in the United States. He alone bears responsibility for failing to defend the national interest.

This isn't the dumbest post I've ever read on this forum, but it's up there. It reads like it was written by an IEE, not, as claimed, by an LII.

[RBRS]

It would be absurd to write off debts I think. I'd like to see where's the correlation inbetween debt and unemployment.

The problem the american economy has is that it's completely reliant on america's geopolitical position. It is well-known that 40% of US dollars has been put into circulation in the last years, yet hyperinflation hasn't hit yet because of the constant global demand for US dollars.

There's a constant demand for US dollars in the global market because OPEC's oil is traded on US currency due to some geopolitical maneuverings during the cold war.

I think this probably effects the quantity of trade other nations are willing to engage in with the US, and has a huge importance for the classic american trade deficits.

Therefore I think the US depends on it's geopolitical position and on the world's need for oil to make it's economy survive or atleast maintain it as strong as it is right now, reason why any menace to petrodollar (Gadaffi) or to more solid trade between OPEC and Europe (Assad) has been dealt with, usually with devastating consequences for those countries.

[Anonymous]

@RBRS

Hyperinflation has not hit nor will it hit because the money that is created is used to facilitate production. You get inflation when the increase in money supply is not accompanied by a proportional increase in the amount of goods and services.

[Adam Strange]

Hyperinflation occurs when your trading partners decide that you won't be able to pay them back in full in real goods, so they need more and more of your currency to do a deal with you.

This only happens once in a while, and usually when the productive capacity of a country is destroyed. It happened in Germany in the 1930's when the victors of WW! saddled Germany with war debts that they might have been able to pay, had not France confiscated the coal and industrial region that formerly belonged to Germany, leaving Germany without fuel or a functioning industrial center.

It also happened in Rhodesia/Zimbabwe when, in order to pacify the fighters who put him into power, Robert Mugabe gave them ownership of the farms which had previously been managed by whites. Since the farms produced the only thing of value that the country exported, and because the inexperienced new owners wrecked the farms, the international community decided that they were not going to be paid back in anything of value for the foreseeable future, so the value of the currency (which is really based on future production) was reduced to the value of the paper it was printed on.

Same thing happened in Somalia. https://www.youtube.com/watch?v=8Ul-Efi1Xys

As long as people believe that the US can repay its debts (the money it prints) IN SOMETHING OF REAL VALUE, it won't see hyperinflation.

And really, you'd have to be a complete moron to bet against the future of the US.

[RBRS]

@RBRS

Hyperinflation has not hit nor will it hit because the money that is created is used to facilitate production. You get inflation when the increase in money supply is not accompanied by a proportional increase in the amount of goods and services.

I consider this a valid counter-argument for you both @None and @Adam Strange.

Unlike low inflation, where the process of rising prices is protracted and not generally noticeable except by studying past market prices, hyperinflation sees a rapid and continuing increase in nominal prices, the nominal cost of goods, and in the supply of currency. Typically, however, the general price level rises even more rapidly than the money supply as people try ridding themselves of the devaluing currency as quickly as possible. As this happens, the real stock of money (i.e., the amount of circulating money divided by the price level) decreases considerably.

Almost all hyperinflations have been caused by government budget deficits financed by currency creation. Hyperinflation is often associated with some stress to the government budget, such as wars or their aftermath, sociopolitical upheavals, a collapse in aggregate supply or one in export prices, or other crises that make it difficult for the government to collect tax revenue. A sharp decrease in real tax revenue coupled with a strong need to maintain government spending, together with an inability or unwillingness to borrow, can lead a country into hyperinflation.

https://en.m.wikipedia.org/wiki/Hyperinflation

40% of US dollars in history have been printed in the past year, and it has been spent on "rescuing" the american economy from the effects of the pandemic if I'm not wrong. It is true that if the increase in money supply is accompanied by an increase in goods and services there should be no problem but if the said money is spent on rescuing businesses, financial firms or even households that's probably not going to cause the necessary expansion in goods (Hence why deficit spending and money printing can be a very good measure on crisis situations or even in normal economic states if spent in productive endeavors like, for example, infrastructure, if done right)

https://www.google.com/amp/s/www.bro...covid19/%3famp

The actual reason for the strength of the US dollar is it's demand in the global market, and it's demand has it's foundation in the fact that is one of the few currencies that's not fiat but backed by a material resource (Oil) which is needed for most modern economies to thrive and function. Most of the oil trade is done in US dollars, so the price of oil is nearly always put in dollars (Lately, the chinese are pushing petroyuan forward so that might affect it).

The german hyperinflation was a result of the Reichbank printing marks en masse as they tried to deal with their debts and war reparations https://dailyhistory.org/What_Were_t...n_of_1921-1923

It's curious how some can exemplify something with a currency crisis in the 20's (where most currencies were backed by commodities) and then apply it globally to a case where most currencies are fiat (or pretend to be fiat). It's even more curious how some can point out some plausible cause for hyperinflation as a way to deny the one that's mainly accepted and demonstrated over and over.

If anyone wants a modern example for it they can look at Venezuela's case, in which most of the economy was dependent on oil production, and after an oil price "lowering" threw the country into an economic crisis and high risk of "default" the goverment limited trade and started printing money, leading to hyperinflation on levels that make the current state of Venezuela almost a failed one. That will not happen to the US because of a demand for dollars on the global market that is related to the exchange for oil.

In 1910 the british empire was the primary superpower in the world, and in 1950 it no longer wasn't, in 2021, it's a regional power at best, compared to behemoths like the US or China. I wouldn't have bet that the UK would lose it's empire if I was born in 1890, but if I saw it's problems or thought I had seen it's problems I would have pointed them out the same way I'm doing right now.

[Anonymous]

@RBRS Very good post, and this is my fault for not mentioning it but in the modern economy overproduction is also one of the sources of crisis. Now it is an ignorance of mine that I do not know where most of the U.S 'corona aid' money is going, what I do know is that consumers spending money on goods and services is necessary for the economy to function and this is essentially why states support 'welfare' policies.

I certainly am not betting against the U.S losing it's empire. Historically speaking it's a guarantee, and the world will reap the consequences of that.

[totalize]

Saudi Arabia agreed to exchange its international oil surplus for US treasury bonds, revived the US financial system. In return Saudi Arabia granted a free hand in the Middle East, US deployed overwhelming force against Iraq in 1991 because Saudi terrified of Iraq, despite the US giving Saddam Hussein the green light to invade Kuwait, presumably since they believed Saddam would give them the same deal as the Saudis.


Iraq wanted to trade oil in Euros. Hence the US fabricated a reason for war against Iraq and occupied its oil fields.

Venezuela nationalised its oil. Hence the US sabotaged the Venezuelan economy and continues to impose economic war against Venezuela.

Libya wanted to create a pan-African currency for the exchange of its oil. Hence the US persuaded Britain and France to destroy Libya.

Russia-China are co-operating on a SWIFT replacement. Hence the US is now ramping up its propaganda war against both countries.

China's Belt and Road Initiative saw China be able to purchase petroleum on the overland Asian markets through its own infrastructure and eventually in Yuan. Hence the US fabricated allegations of genocide in Xinjiang since the main BRI oil terminal is in Urumqi.

What's next?

Saudi Arabia later allowed to create and fund ISIS so long as Saudi oil profits were recycled with dollars. Saudi Arabia allowed to attempt to crush US shale, so long as Saudi oil profits were recycled with dollars. If Saudi choose to make their own currency and end the recycling of the petrodollar, immediately we will see western media focus on human rights abuses in Saudi Arabia, a topic on which they've been very quiet for a very long time.

Western media has nothing to say about genocidal Saudi campaign in Yemen. Saudi reinvests the funds from oil profits into dollar backed securities and financial vehicles. China attempt to create secure petroleum source purchaseable in Chinese currency, western media immediately fabricates false claims about Chinese human rights records. Coincidence? No.

[totalize]

No country makes war for no reason. The United States has made war on the world since 1945 in order to guarantee the purchasing power of the dollar despite the actual value of the dollar declining every year since 1945 to the point that the 2021 dollar is fundamentally worthless, ie that nothing of use can be bought with it if its exchange value, ie its value in purchasing other currencies, wasn't supported by the US military.

The US military very fucking expensive. US foreign policy very fucking expensive. US system generates debt because US military can protect the value of the dollar against the declining value loss from cash printing.

This must at some point reach a head: the US military can no longer protect the dollar against declining value loss by occupying and destroying countries who act against the US interest. Either the United States will try to fight China, or the dollar will collapse and consequently the United States will collapse.