Is this like drinking oneself out of being drunk???
Devil's Advocate
"Obama: U.S. Must Spend Itself Out of Recession"
Dänk 1010011010
wrote:
> http://www.newsmax.com/newsfront/obama_jobs_speech/2009/12/08/295829....
>
> "Obama: U.S. Must Spend Itself Out of Recession"
This isn't such an outrageous statement. Recessions are caused by a
lack of spending, which is caused by a reduction in the money supply.
Japan experienced a severe recession after deflation began to occur.
People began putting off purchases because they knew the prices would
continue to fall, and the economic system began to collapse.
The solution is to inflate prices by adding money to circulation. As
prices rise, people begin purchasing more because they want to avoid
paying even higher prices later. This does not necessarily mean that
people are wealthier, just that they are trying to avoid holding on to
currency that is devaluing.
A mattress full of dollars will soon devalue to worthlessness, but
invest those dollars in a new automobile or other tangible good and
the value is somewhat protected. This revives the economy, but also
has the effect of reducing net purchasing power, as inflation rises
faster than wages and interest.
What this means for us is that Obama intends to devalue the dollar,
which not only encourages spending but also makes debts easier to
repay. The additional dollars in circulation also makes it easy to
give away 'free' money in an attempt to purchase political support at
election time, and the resulting inflation can be blamed on greedy
merchants instead of corrupt economic policies.
Poetic Justice
> On Dec 9, 1:59 pm, "Devil's Advocate" <Devil'sAdvoc...@devils.xxx>
> wrote:
>> http://www.newsmax.com/newsfront/obama_jobs_speech/2009/12/08/295829....
>>
>> "Obama: U.S. Must Spend Itself Out of Recession"
>
> This isn't such an outrageous statement. Recessions are caused by a
> lack of spending, which is caused by a reduction in the money supply.
How do you spend what you don't have?
> Japan experienced a severe recession after deflation began to occur.
> People began putting off purchases because they knew the prices would
> continue to fall, and the economic system began to collapse.
Japan Spent money they didn't have.
> The solution is to inflate prices by adding money to circulation. As
> prices rise, people begin purchasing more because they want to avoid
> paying even higher prices later. This does not necessarily mean that
> people are wealthier, just that they are trying to avoid holding on to
> currency that is devaluing.
So what will they do once they have spent all their resources?
>
> A mattress full of dollars will soon devalue to worthlessness, but
> invest those dollars in a new automobile or other tangible good and
> the value is somewhat protected. This revives the economy, but also
> has the effect of reducing net purchasing power, as inflation rises
> faster than wages and interest.
We can't buy a car before the prices go up, we need that money to buy
food after prices are raised, we need to buy gold and bullets. Or we
will starve while waxing our new car.
> What this means for us is that Obama intends to devalue the dollar,
Which is a tax.
> which not only encourages spending but also makes debts easier to
Easier? how will you heat your house or feed your kids while sending
money to car payments. You are paying less in real dollar value but
there is no security in making more discretionary bills when you will
have other necessary fixed costs rising.
What will the car seller do with cash that is being devalued with ramped
inflation? Of course they will turn it into gold or food or bullets
rather than low interest bank accounts or buying more cars to sell.
> repay. The additional dollars in circulation also makes it easy to
> give away 'free' money in an attempt to purchase political support at
> election time, and the resulting inflation can be blamed on greedy
> merchants instead of corrupt economic policies.
Won't matter by that time.
--
Devil's Advocate
> On Dec 9, 1:59�pm, "Devil's Advocate" <Devil'sAdvoc...@devils.xxx>
> wrote:
>> http://www.newsmax.com/newsfront/obama_jobs_speech/2009/12/08/295829.
>> ...
>>
>> "Obama: U.S. Must Spend Itself Out of Recession"
>
> This isn't such an outrageous statement. Recessions are caused by a
> lack of spending, which is caused by a reduction in the money supply.
>
> Japan experienced a severe recession after deflation began to occur.
> People began putting off purchases because they knew the prices would
> continue to fall, and the economic system began to collapse.
>
> The solution is to inflate prices by adding money to circulation. As
> prices rise, people begin purchasing more because they want to avoid
> paying even higher prices later. This does not necessarily mean that
> people are wealthier, just that they are trying to avoid holding on
> to currency that is devaluing.
And if the rest of the world loses all confidence in the dollar and it
crashes, things will REALLY hit the fan!
We're gonna wind up with a country like rural Mexico, because of the
Democrats and Obama!
Devil's Advocate
> So what will they do once they have spent all their resources?
Then it will crash anyway. This process is like giving opium to an addict,
to keep them from having withdrawal symptoms, then the opium will run out
and they die.
This opium is OPM - Other Peoples' Money.
Dänk 1010011010
wrote:
> And if the rest of the world loses all confidence in the dollar and it
> crashes, things will REALLY hit the fan!
>
> We're gonna wind up with a country like rural Mexico, because of the
> Democrats and Obama!
Mexico is a perfect example, with a corrupt ruling party that has co-
opted every conceivable special interest group and which gives away
'free' pesos to purchase political support, then prints new pesos to
pay for it. Inflation erodes the purchasing power of existing pesos,
leaving the people worse off than before, but they don't care because
they get 'free' money.
The Mexican government tried to put a positive spin on the devaluation/
hyperinflation, by pointing out that a weaker peso would boost
Mexico's exports. The economic strategy succeeded, and Mexico
increased its exports of Mexicans by over 500%, exiled to the USA to
work and send back dollars for the ruling party to steal.