[beforeobamabans]

Originally Posted by barbedwiresmile

Interesting conversation.

Be very careful here, my friend. The paper markets are outrageously manipulated right now and, as we find with the LIBOR scandal, have been for some time. This includes equities, capital markets, and paper commodities (COMEX, etc). Just ask those former MF investors who have to listen to Corzine be referred to as 'the honorable'. Algo driven and highly manipulated. Be careful. When contractual rule of law crumbles, all other law follows and we default to law of rule (which is where we are at today).

I always try to be careful, LOL.

When I said "cash", I wasn't referring to any market but rather cash on hand, in the matress or maybe in an FDIC protected account, although at some point, this will become risky too. We are used to an inflationary economy where prices continuously rise making cash worth less. This encourages a "buy now" mentally and has crippled our savings rate. Deflation, not surprisingly, calls for exactly the opposite, that is conserve your cash because it can buy more tomorrow, eliminate debt because the principle is increasing in value, and save more. Guess what these laws of physics mean for an economy based on 70% consumption?

When you truly look at the big picture of where we're headed, it is frightening indeed!

[evlbruce]

Originally Posted by cowboy1964

I don't get Japan. That much debt for this long? Yet no one ever talks about that.

I just don't get it.

Japan is circling the point of no return, it just seems that foreign investors and international economists are the only ones truly concerned.

I'd chalk it up to their culture of trusting the state to provide good governance.

[pugman]

Originally Posted by ChuteTheMall

It's been going on for nearly half a century so far.

Having experienced high inflation, I absolutely prefer lower inflation, although I've done well enough under both. YMMV.

Disaster delayed is, um, disaster postponed? Prevented?

72 years to be exact. The debt has increased every decade since 1940. The ramp up really started in the 70's. The problem is what used to take a decade to add to the debt now takes 6 months. The public debt and entitlement programs are just like credit cards: you can max a card in a month and take 5 years to pay it off.

During inflation, deflation, stagnation...anything one thing has stayed current: the fed spends more money, runs up more debt and is simply running out of "wiggle room." Politicans on both sides of the aisle haven't been responsible mangers of this country for decades.

Every disaster has a starting point - the gravy train will end at some point.

I can run simple mortgage like numbers and show if 1) the budget was balanced tomorrow 2) taxes increased 3) interest rates on all public debt were reduced to 0% 4) entitlement programs were frozen we could dig ourselves out in about 50 years. Now enter reality.

What took 50 years to charge up could take hundreds of years to pay off. Our Republic won't last this long.