Quote:
Originally Posted by fintstone
Don't feel bad. Lots of relatively smart folks got it wrong.
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Problem with Krugman is that he lets his ideology get in the way of his thinking.. He was specifically predicting a disaster with Trump..
My thinking is that the Trajectory of this nation of which the advent of Trump or a Trump like figure is just part of the program...a scene in the larger play. Nothing is changed the nation is still manipulating the currency with low interest rates and a $1,000,000,000,000.00 USD DEFICIT PER YEAR GOING FORWARD EVERY YEAR.
How many more Trillions on the Card will make everything you have worthless? It is like Whiskey right off the Still it is around 140 proof or 70% alcohol. The more water you add to it the less the alcohol content there is..until if you add enough water you might as well just be drinking water...That is your situation.
The irony is that will all that dilution of the money one would expect inflation, but with the situation we have of weak consumer demand making it a DEFLATIONARY situation. All that new liquidity/money, cheap interest rates to keep the cash flowing and debt which is a money creation of sorts does is keep deflation at bay. It is like pouring money into the Black Hole of Deflation, it gets sucked right up with virtually nothing to show for it..
They (the political, bureaucratic, corporate sic biz, Wall Street and Academic leadership) thought that by priming the pump with liquidity that the engine of the economy would catch fire once again..and everything would be swell again. Just like it has always been before. It didn't work and won't work.
It is NOT SWELL if you are borrowing a Trillion a year, HAVE TO keep interest rates low and have to keep a large Central Bank balance sheet. As stated back in 2011 or so you are going to see Growth at roughly the rate of population increase...which if you subtract that number out of the Growth rate gives you minimal real growth.
I guess it is the natural learning curve is to try everything that has worked before to see if it works this time or not...throw it up against the wall to see if it sticks. Almost all of the Leadership and certainly the peons don't get it...The Global economy of scale does not have a viable consumer base to sustain it. Thus deflation and eventual collapse when they can not borrow or print anymore. At some point the rubber band snaps....