Quote:
Originally Posted by striperman36
Yes, we do.
For us Chance the Gardner types.
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when you create too much paper money that isn't backed by anything of real value (like gold), bad things happen.
1. the previous federal reserve dude (Alan Greenspan) printed too much new paper money, because he's an idiot.
2. the u.s. government has been spending more than it has been taking in in tax dollars and fees. so it has to borrow. when it borrows, it creates more funny paper money (in the form of IOU's backed only by the full faith and credit of the U.S. government). you think it's bad now ... wait until medicare spending starts to explode.
3. the u.s. consumer is borrowing too much and not saving enough. when he borrows on his credit card, he creates more funny paper money.
4. the u.s. consumer is buying way too much from overseas.
when he imports more than he exports, he creates more funny paper money (the difference has to be financed with an IOU). China has a lot of IOU's from us, to the tune of $1.3 trillion. all that was created from ... thin air.
what happens when we have too much paper money floating around that gets created out of thin air?
A) inflation and asset bubbles. lots of hot money chasing questionable investments. remember the dot.bomb stock bubble of the late '90's? remember the housing boom? do you know why plugs are selling for $50 now?
B) the dollar becomes increasingly worthless vs. other currencies. so we have to spend more to import things like oil and all other commodities (which, by convention, have been historically priced and traded in U.S. dollars). that's partly why oil has been going through the roof. this itself is inflationary!
we're f*kked, thanks mostly to Alan Greenspan, thanks to the idiots in Congress who can't balance a budget (the Prez is undisciplined too), and thanks to American consumers who have no discipline.