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Thread: Catastrophic inflation (death of the dollar)

  1. #21
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    [QUOTE=Ryanferr;2668167]It's just a hypothetical, but there is plenty of historical precedent. We purchased the Louisiana Territory from France when the French Treasury was gearing up for war with Britain, for example. The sale was for reasons beyond just shoring up the Treasury, but that was certainly an aspect of it and part of the purchase price included the forgiveness of some French debt. There's nothing theoretically stopping us from doing the same thing now in the present day. While it's a common trope to complain about the US debt, people forget that 1) the upper bound of the fiscal debt load is significantly higher than many had previously thought; and 2) the US remains asset rich and has other forms of repayment beyond tax receipts.


    Sounds good in theory, but if assets such as these were sold to pay off our national debt, what happens to displaced US citizens???? do we take away their citizenship?
    ALSO it would put on huge display the horrendous lack of fiscal responsibility by our government. (would that be dollar positive?)
    And finally who would be the buyer????? you need a buyer! would it be an intelligent strategic move to sell Hawaii to say CHINA??, besides,the whole world is so debt ridden that who could pay 22 trillion in cash??
    the buyer would have to come from another planet, flying in on a solid platinum asteroid.
    I revert to my original assessment of the situation.

    Ag guy
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  2. #22

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    Quote Originally Posted by Ag guy View Post
    Sounds good in theory, but if assets such as these were sold to pay off our national debt, what happens to displaced US citizens???? do we take away their citizenship?
    ALSO it would put on huge display the horrendous lack of fiscal responsibility by our government. (would that be dollar positive?)
    And finally who would be the buyer????? you need a buyer! would it be an intelligent strategic move to sell Hawaii to say CHINA??, besides,the whole world is so debt ridden that who could pay 22 trillion in cash??
    the buyer would have to come from another planet, flying in on a solid platinum asteroid.
    I revert to my original assessment of the situation.

    Ag guy
    I have no disillusions that this will ever happen. It's a fun theoretical, but the fact remains it is an option (however unlikely) and there has been historic precedent for this type of action. Lastly, the buyer doesn't necessarily need to be another sovereign. What if the tax payers of California decided buying Hawaii was attractive and raised private funds? What if ExxonMobile paid a handsome sum for additional gulf drilling rights? It's more just a thought exercise to help us frame the conversation about national debt as creditors lend against the tax receipts as well as assets of the borrower and view US debt as investment in our attractive economy. In the case of the US we have the ability to tap significant sums of both tax receipts and assets in the event repayment become a concern, and investment will likely continue so long as the US economy / market place remains incredibly attractive.

    This all adds up to the reality that the fiscal load our country can carry is quite high -- in fact far higher than everyone from the past had assumed. Japan suggests the US has significant run room before concern of the debt load manifests into anything beyond theoretical and academic discussions. That said, I am sure we are both in agreement that we would prefer the debt load be lower than where it currently is for a variety of reasons, so trust there is some commonality in our views -- I'm largely just playing devil's advocate with you.
    The answers are in the data

  3. #23

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    Quote Originally Posted by Ryanferr View Post
    It's just a hypothetical, but there is plenty of historical precedent. We purchased the Louisiana Territory from France when the French Treasury was gearing up for war with Britain, for example. The sale was for reasons beyond just shoring up the Treasury, but that was certainly an aspect of it and part of the purchase price included the forgiveness of some French debt. There's nothing theoretically stopping us from doing the same thing now in the present day. While it's a common trope to complain about the US debt, people forget that 1) the upper bound of the fiscal debt load is significantly higher than many had previously thought; and 2) the US remains asset rich and has other forms of repayment beyond tax receipts.



    The ability to pay taxes with USD certainly helps and plays a role.
    I honestly believe thats what is going to happen wth the majority of Northern California north of San Francisco and Sacramento to southern and parts of Oregon. And to the Pacific ocean. They will probably throw in Hawaii too.

    The mis management of our forest and the almost compleat distruction of the renewable logging industry plus the outlawing of even small hobbie miners to use small dredges.

    The area now only has one major industry and that is pot, that now is selling for as little as $50 a ounce for the good ligjt green stuff, in the 80s it sold for $380 a ounce. Plus with the only private industries now being mostly pot heads that brings in the filth, the jails are full of molesters and sickos. Meth heads and illegals run amuck. Forest and whole towns are burned out...

    There is still hundreds and hundrefs of tons of gold in them hills, plus the redwoods are worth billions what ever the monies are....
    Small business is the incubator of employment. As it declines, so too do opportunities for first jobs, second chances and economic independence.

  4. #24
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    Even higher interest rates and inflation will be a boon to mortgage debt nholders with a fixed rate and a silver hobby?

  5. #25

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    It's been my experience that politicians will sell anything they can get away with selling. As an example, when I first moved to NYC, my neighborhood was dotted with a bunch of small parks. When Guilani got into office, he sold them off to real estate developers for $1 each. The explanation for the low price was a need to soften the housing crisis in the area. I expect that other incentives also existed. He later floated the idea of selling the Brooklyn bridge to a private firm that would then recoup their investment by charging tolls to the people who used it. In the past, selling the Brooklyn Bridge was a joke that implied the perspective buyer was a rube, because it was unthinkable to sell the bridge. Under Rudy, the unthinkable was proposed & implemented many times. I also saw similar examples of graft & corruption in Boston, when I lived there.

  6. #26

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    Quite frankly, I think we're already seeing the slow death of the dollar. Considering that the FED is unwilling to raise rates and stated they will end the balance sheet unwinding in Septemeber, just a sign that the dollar's days are numbered due to the massive debt. However, for some reason wall street and other investors do not see this. Perhaps they believe the dollar or U.S. bonds are still the best assets to hold compared to all others, it's crazy really.

    However, I believe once the FED is forced to revert to rate cuts along with QE sometime after, we'll see the dollar go back down to new lows, and that's when the inflation will really kick in.

  7. #27

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    This post nailed it. That's why the Fed wants inflation.
    "Political correctness is a doctrine, fostered by a delusional, illogical minority, and rapidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."

  8. #28

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    Yes, everything is a slow death except metal and the sun?, but the the fed can change the game midstream. I've heard goldbugs say 100 trillion is not out of realm of possibility. Since rates are headed to zero bonds might have a negative return but still beat inflation. If savings go negative, into the stock market all will go to one day achieve prices beyond our wildest dreams, anything denominated in the fiat can be inflated, I mean look at crypto, what a strange phenomena. If their is possibility of return it will be chased, or herded.

  9. #29

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    I'm thinking selling Hawaii would take a constitutional amendment. How else could you disenfranchise all those US citizens.

  10. #30
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    As a high school youth, I recall coming of the thought that some day, the rest of the world would rebuild and become as self-sufficient and self-interested as we - and, when that time came we would lose much of our special advantage. In thinking this, my mindset was that we, not "they" would have to adjust. Everything changes. America has always been an adaptable nation.

    I did not fully realize then that the global trading and financial transactions systems we were building to migrate the defeated countries back into competition and prosperity would be necessary to use as weapons of "control" against stress points that would eventually come. I learned that later. I also did not realize how stern and able was were the forces of global socialism to craft and knit America into a more common union.

    The current "western system" which we led and sort of guaranteed and financed (with benefits accrued) in under stress. Our benefits from that system are threatened. Were I Chinese or Russian, I'd be doing a cost benefit analysis as to join, change(adjust) or replace the current systems. China seems in the process of playing the system while it replaces it.

    What powerful country with it's own (different) ideologies and historic cultures and traditions would want to be suseptable to America's (and the west's) economic power and control. We seem either in the earlier stages of economic war or major negotiations on a new "blend". I'm betting a war.

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