Is Cash for Clunkers Our Economic Destiny?
Although we had vowed to let the by-now tiresome inflation vs. deflation debate simmer for a while, it came to an unexpected boil last week after some provocative comments were posted by “Senor Cuidado” in the Rick’s Picks forum. Like us, the Senor finds it difficult to imagine how all of those printing-press dollars the banks are currently sitting on will find their way into the consumer economy. So far, the banks have recoiled from the idea of lending out their digital funny-money, using it instead mostly to purchase U.S. Treasury…
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Consumer ‘Surge’ Downgraded to a Blip
Yesterday’s selloff on Wall Street was attributed to disappointment over consumer spending data that suggest a hoped-for surge in recent weeks is looking more like a blip. Who could possibly have believed the economy was returning to life in the first place? Actually, one guy does come to mind – our telegenic friend Larry Kudlow — but we suspect that even he didn’t really buy into the “green shoots” story – other, perhaps, than as a metaphor that engaged the fancy of credulous news editors for a few short weeks. There’s The Wall Street Journal, for one, where editors have found reason to celebrate an uptick in…
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Hyperinflation Won’t Be Like Germany’s
I thought I’d overdosed on the inflation vs. deflation debate, but that was before I started reading Adam Fergusson’s When Money Dies: The Nightmare of the Weimar Collapse. Fascinating stuff. Anyone who thinks it couldn’t happen here is right in one respect: It won’t take ten years to play out in the U.S., as it did in Germany. Far from it. My guess is that our own hyperinflation nightmare – and we will have one once deflation has had its way with all who borrowed more than they can ever pay back — will be over within ten…
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How Quickly Could the Dollar Collapse?
We popped up on the “wrong” side of the inflation/deflation argument here the other day with a hyperinflation scenario that seems to us not just possible but likely. Although we hold fast to a prediction that deflation is going to run its course, throwing tens of millions of Americans into bankruptcy, before relief comes to debtors, we are persuaded that at some point well down the road the U.S. will throw the switch to hyperinflate. Even so, we believe that the attendant collapse of the dollar will play out far more quickly than the…
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Sadly, Recovery Hopes Are Riding on Shoppers
Here’s ignorance all ablaze, high atop the front page of Wednesday’s Wall Street Journal: “Reluctant Shoppers Hold Back Recovery”. So there you have it. If only we would all make a beeline for the mall and shop-till-we-drop, just like the good old days, then we would have the kind of recovery that warms economists’ hearts. And it is evidently the economists, more than anyone else, who are clamoring for a return to the halcyon days of binge shopping in America. In a survey conducted by the Journal last month, 60 percent of the…
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