This is what Inflation is Made Of

I understand that there needs to be a coordinated effort across many central banks to steady this credit crisis. The move they have made to work together is great. Really.

But the side effect will be serious inflation. That's a whole lot of cash to be pumping into the world economy. The entire world is going to feel it.

The fallout from the world inflation is developing nations are not going to buy into the idea of globalization in the future. Nations are going to insist on their own food supplies being grown in their own countryside.

Further, we as a nation should be embarrassed that these socialist countries that we mock all the time are having to bail us out of our own foolishness and greed.

1 comment:

The Lazy Iguana said...

Inflation has been around for some time now.

It was just not called that. It was called "high oil prices". But what was ignored was the fall of the US Dollar against the Euro.

So either the US economy fell, or the economy of Europe got stronger - or both.

Economic fundamentals in Europe have not really changed much. So that leaves only one option.

And as the USD falls in value, it takes more money to buy shit.

Which is the definition of inflation. When it takes more money to buy stuff today than it did yesterday.

I heard a blurb about how the treasury is going to have to "bail out" the Federal Reserve to replace all the cash the reserve is using to bail out everyone else.

This means one of three things. Printing more money (causes inflation), going further into debt (causes inflation AND the debt has to be paid off) or a mix of both.

This could very well be the death of the neo-conservative movement. The undoing of the Reagan era myth. That regulations are bad, that government is bad, and that business can always be trusted to be ethical. That tax cuts at the top mean more money for those at the bottom. And so on.

And now I know why all my US History classes in that darn liberal public school system left out the 20th century. So that there would be nothing on the Great Depression. So that there would be not a word mentioned about the reasons for the new deal, and regulations.

Seriously, I had to take history in jr high and sr high. Both classes ended in the late 1800s. What little was covered of the 20th century was focused mostly on the world wars.

Nothing about the 20s and 30s. Except for having to read "The Great Gatsby" is English class, and also some poems from the Great Depression.