This is a good article, even though I disagree with the politics and the objective of the writer. But he summarizes our economic problem nicely: Consumer Household Debt.
With the level of personal debt this high, the consumer has no interest or ability to buy more stuff. He's maxed out to his eyeballs.
This is why there's no "velocity" of money through the economy. This is why there's no inflation. Joe Consumer can't get a loan, and he doesn't even want a loan. He's trying to start paying down his debt and saving money for another rainy day. He's now living his life like a tight-fisted Japanese consumer.
Meanwhile, Bernanke is desperately trying to create inflation, or at least prevent a deflationary spiral that will cause another Great Depression. He wants Americans to think he can make the dollar valueless, so they will rush out and buy equities and more "stuff" they don't need, which will ultimately drive the economy.
Bernanke would love to monetize the debt, so he can make $16 trillion in national debt worth $8 trillion, and cut consumer debt by 50%, all through the magic of inflationary money printing. But every time he tries to print more money, other countries simply follow him, so they don't end up with a strong currency and a trade disadvantage.
Just remember, anybody talking about "inflation" is probably another huckster who is trying to sell you gold. We are re-living the 1930s, except this time, we have Fed Stimulus.
BEHOLD THE HOUSEHOLD; Seeded by Hugh Everett
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This is a good article, even though I disagree with the politics and the objective of the writer. But he summarizes our economic problem nicely: Consumer Household Debt.
With the level of personal debt this high, the consumer has no interest or ability to buy more stuff. He's maxed out to his eyeballs.
This is why there's no "velocity" of money through the economy. This is why there's no inflation. Joe Consumer can't get a loan, and he doesn't even want a loan. He's trying to start paying down his debt and saving money for another rainy day. He's now living his life like a tight-fisted Japanese consumer.
Meanwhile, Bernanke is desperately trying to create inflation, or at least prevent a deflationary spiral that will cause another Great Depression. He wants Americans to think he can make the dollar valueless, so they will rush out and buy equities and more "stuff" they don't need, which will ultimately drive the economy.
Bernanke would love to monetize the debt, so he can make $16 trillion in national debt worth $8 trillion, and cut consumer debt by 50%, all through the magic of inflationary money printing. But every time he tries to print more money, other countries simply follow him, so they don't end up with a strong currency and a trade disadvantage.
Just remember, anybody talking about "inflation" is probably another huckster who is trying to sell you gold. We are re-living the 1930s, except this time, we have Fed Stimulus.