Bush’s folly was/is Iraq. Will Obama’s be the stimulus?
Peter Schiff in the Wall Street Journal:
It would be irresponsible in the extreme for an individual to forestall a personal recession by taking out newer, bigger loans when the old loans can’t be repaid. However, this is precisely what we are planning on a national level.
The hope, with all of this printed money, is that it will stimulate the economy to grow again and that, once the growth begins, the Fed can start taking dollars out of circulation without undoing what it just did. It’s a very, very delicate act they’re trying to pull off and Schiff is arguing that, ultimately, it can’t be done. At some point, the piper will have to be paid.
I don’t disagree, but I do think we have to forestall a massive depression. Recession, yes. Long and hard, yes. But let’s not have 25% unemployment ever again. Let’s have plenty of pain. Just soften the blows a little.
On an even gloomier note, Marc Faber says short treasuries and buy gold. Hyper-inflation is coming and it’s going to be brutal.
This I believe. I don’t know the timing, but we are going to have massive inflation at some point likely coupled with a lagging economy (stagflation).
The only solution after we run through this cycle? Some day, and not far off, America is going to go bankrupt. We are all going to lose our shirts and suffer the harsh austerity measures of a vengeful globe’s bailout (or conquering).
America, we need to take our medicine now. It’s time to cut spending everywhere. By all means, Obama, borrow and spend, but phase in cutting, too. I can see $100 billion from defense right off the top.
This simply can’t go on forever.