Peter Schiff @PeterSchiff : "There's no way to bring #inflation down without a severe #recession and a financial crisis. Laffer is correct that we need much higher interest rates. But that will prick America's bubble economy. We can't afford tax cuts. What must be cut are regulations and government spending."
Yup, pretty much. But of course, that will not happen since the government won’t give up its power voluntarily and it doesn’t know how to govern with mouse click money, so how the hell would they with no money. They are not capable. So the likely scenario is a debasement of the dollar, losing its reserve currency status, the fall of a government that has defaulted, and a change of government, and I’m not talking about Republicans and democrats in any kind of way Americans are used to. There is systemic corruption and incompetence that needs to be purged and if the United States manages to somehow still be united and republican, then to get out of the status of a banana republic, they need fresh grass-roots people to take over. Completely The GOP and DNC are way too corrupt and tainted. How will America look with new people? It’s hard to say, but it won’t be the America of the baby boomer generation.
The opposite of inflation is deflation. Deflation is a scary word to central bankers and lenders.
Inflation means the money they borrow can be paid back later with a less valuable dollar. It's great all around. Because there are more dollars around it is easier to pay debts. Not only that but interest rates will recover any losses to lenders that inflation "taxes" away.
Deflation means the money they borrow will have to be paid back with a more valuable dollar. This is unacceptable to them. Less money in circulation means it is more valuable and its purchasing power is greater. Borrowers will have a harder time paying back loans, let alone the interest.
Lenders are also borrowers - except for central banks. They are just lenders. Governments are borrowers and lenders. Commercial banks are borrowers and lenders. Only central banks are not borrowers. The consumer is, for the most part, a borrower.
Essentially, inflation helps lenders and deflation helps borrowers. Deflation though means there will be a lot less consumer borrowers and more consumer savers. There a problem to consumers with deflation, Wages may have to go down. But the problems to lenders in a period of deflation are vast.
There is less borrowing and more saving. There are more defaults on existing loans. Interest rates will be lower. On that point we have seen lower interest rates for the last at least ten years. Why is that? We haven't seen inflation until now. Quantitative Easing was touted as saving the economy in 2008 and you would have to get into a whole other discussion about that.
Suffice it to say the central bankers have put us and themselves between a rock and a hard place.
I know English is not your first language and you do quite well with it. I just wanted to point out the difference between "off" and "of". They are small words that can have about 20 or 30 definitions so trying to understand or differentiate between them when learning English may be hard.
Generally, "off" is the opposite of "on"(another small word with a gazillion meanings). The light is off. The light is on. Hot "off" the press. In this case "off" means "originating from". Off could also mean "not right or correct" as in, "This salad tastes off".
"Of" means "having to do with", "related to" as in, The Queen of England. We don't say "Hot of the press." though because it is not a part of the press, it originates from it.
Many English-speaking people couldn't tell you what of or off or from mean. Because they are used all the time they can determine when to use them correctly. Even a word like "the" would be hard for quite a few English speaking people to define or put in other words.
I have by no means illustrated all of the meanings of these "small" words but hope these differentiations help somewhat. In order to get a good understanding of them you would have to look them up. Unless you want to get really into it I wouldn't suggest a comprehensive dictionary like the Oxford dictionary. A less comprehensive, college level one will suffice for general use.
Krunoslav, I am not (any longer) a republican. But, I think it is unfair to lump them into the same category as the Demos when talking about corruption. Yeah, there is corruption in the GOP -- one of the reasons why I left. But, the DNC is way past that. They are primarily anti-American. Racists, considering they were the slave owners. Horrible at any aspect of economics -- except when it enriches them or their family. Yada, yada.
Both parties need to be done away with and replaced. But, if the enemies of the republic are not first gotten rid of in the DNC nothing good will result regardless of whatever else is done . Almost none of them can be allowed anyway near any reformation. They will taint it.
Just my thoughts. Not really a complaint.