[ExI] Warren Buffett is worried too and thinks Republicans are "asinine"

[BillK]

On Sun, Oct 20, 2013 at 4:29 AM, spike wrote:
> This world must not depend on money which has value based only on trust and faith.
> We need money that represents actual wealth, based on evidence and frequent verification
> by exchange.  Otherwise it enables whichever nation which mints the faith-cash to borrow
> real wealth at any arbitrary rate based on nothing.  This is a form of unchecked power,
> which always results in unchecked corruption and eventual chaos.
>
> Your counter-evidence is in pointing out the attitude of some Tea Party candidates on
> a perfectly irrelevant and unrelated topic, creationism.  The Tea Party holds no position
> on that subject.  You have produced no evidence to convince me that we can continue
> to borrow three billion dollars a day and sustain that indefinitely.
> That idea is to economics as creationism is to biology.  I am still not buying that notion.
>
> My shocking theory: all governments and all nations must live within their means.
> All governments must balance their books, including that fortunate nation which mints
>
>

It's complicated. :) As shown by the wildly differing opinions.

Fundamentally, a nation that prints it's own fiat currency can never
go bust. It can always print enough currency to pay all the debts. So
what is the problem?

Currency hyperinflation. e.g. Weimar Republic, Zimbabwe, etc.

So how can the US continue to print so much money and avoid
hyperinflation? (up till now, anyway).

First, control what gets counted in the inflation statistics.
(Who cares if rare champagne costs 100,000 USD a bottle if it is not
in the CPI stats?).

Next, keep the income of the majority of the population low, thus
avoiding hyperinflation of the basics, like food and clothing. (Nobody
wants wheelbarrows of money to buy food).

So, where is all the US money printing going?
Look at the growing inequality in the US. The 0.1% ultra rich and
their corporations are getting richer. And the things they spend their
money on are increasing rapidly in price. Look at the multi-million
corporation deals, planes, property, islands, art objects, lobbying
costs!, etc. All things not in the CPI calculation are wildly
inflating.


So there is still a problem with US money printing. It is just not
that obvious yet what it is.
There is a huge transfer of wealth going on and the 0.1% are very
happy with the situation.


BillK