Showing posts with label current events. Show all posts
Showing posts with label current events. Show all posts

Thursday, December 25, 2014

Merry Chistmas to All

AMERC who I stole this picture from did a holiday post that resonated with me. I'm not too worried about Ebola living in central Louisiana and all but between Russia trying to rebuild the USSR, those ISIS jerks being pretty much the worst people in the world, the whole Ferguson/ Long Island/ NYC rioting then recently police shooting mess and the general state of things it is an uncertain and dangerous time in history. I generally do not feel secure about much these days and am not particularly in the 'Christmas Spirit.' Maybe I need some more egg nog. Except after recent experimentation I am seriously considering cutting dairy out of my normal diet. Anyway.

On positive notes gas prices are down as well as silver/ gold. Also I have seen some darn good ammo prices lately. Lucky Gunner has 55gr ball for $309/1k which is an awesome price. If I had the cash in my gun/ ammo/ prep fund I would buy a case if just (because I prefer the 62rd M855) to train with but alas I do not. Anyway I want to leave you with a beautiful song.



This is being written ahead of time so hopefully as it gets to you I am more in the Christmas Spirit. Anyway I hope you all have a great day of family, food and gifts.

Friday, May 16, 2014

Department of Agriculture Looking for a Few Good Submachine Guns

Well the Department of Agriculture is looking to buy a bunch of 40 S&W submachine guns.

I cannot say for sure there are not a few folks on the Dep of Agriculture who have  reasonable need for such armarment. Yet I suspect they are not just looking to pick up a dozen to arm agriculture experts on loan to assist the DEA in destroying pot fields or something.

Here is what Pastor Joe Fox thinks about the matter.


At a minimum, baring the potentially excusable small order, I find this  symptom of the increasing mission creep and militarization of federal agencies. Departments like Agriculture, Education, Social Security, Wildlife, etc all may legitimately need some armed folks but not many. They certainly do not need SWAT teams, MRAP's or hundreds of machine guns and rifles. In fact I would submit the issue with these agencies getting paramilitary wings entirely outside of the scope of their traditional roles is twofold. First boys of all ages who get cool shiny toys want to use them. Additionally administrators with new departments (that make them look good, allow a bunch of jobs to be upgraded a GS level, etc) need to show their departments have a purpose to justify their continued existence.

What do you think?

Thursday, December 26, 2013

First White on Black "Knock Out Game"

HOUSTON (AP) — A white Houston-area man was arrested Thursday on federal hate crimes charges for allegedly shooting video of himself sucker-punching a 79-year-old black man in a "knockout game"-style attack.

A hole cracker punching an old black person isn't any more or less acceptable than an 'urban youth' punching an elderly white person. I cannot condone random pointless violence, especially against the old, young and generally infirm. That being said people in a group reacting to violence against their group is a very natural reaction.  Reactions create counter reactions which can under some circumstances spiral into ethnic/ tribal violence beyond what anyone could envision. Without overreacting to this incident it could be a sign of bad things to come.




Saturday, July 13, 2013

Zimmerman Trial Update

Panthers: “This Time We’re Going Out To Whitey’s Suburbs and Burning Down HIS Community”

 As Wifey said "I think Zimmerman is going to get off, as he should because being stupid is not illegal, and there are going to be problems."

 Am I worried? Personally I am not at all. That being said I currently reside in Southern Arizona. It would probably take us and 2 neighboring counties to get enough angry black teenagers "Urban Youth" to make a decent rap video, let alone have a full on riot. Not to mention that Arizona is a pretty well armed state. People tend to look at the prospect of robbery/ breaking stuff/ hurting people and generally playing Grand theft auto in real life when their potential victims might be carrying guns and almost surely have guns in their homes and small businesses.

Now if I lived in LA, Chicago, Detroit or all but the most rural parts of Florida I would be paying attention to this case. I hesitate to make any predictions but this just might get ugly. Also apparently the mighty New Black Panthers plan to go riot in suburbs. So if you live near Philly it might be a good idea to pay attention.

Thursday, July 11, 2013

Adam Kokesh Arrested

Turns out loading a shotgun in a public area in Washington DC and putting the video up on youtube will lead to a raid and your arrest.

Flash Back:  David Gregory violating Washington DC law on National Television.

Rule of law is only for conservatives, libertarians and generally the little people I guess.


Friday, July 5, 2013

Egypt and Brazil: Crazy Stuff Going On Around The World

Egypt is a huge mess right now. To briefly recap. Recently as part of the Arab Spring Hosnu Mubarak the longtime dictator was deposed. The military chose not to get involved on his side, avoiding a Syria like protracted conflict. There were elections and the Muslim Brotherhoods candidate Mohamad Morsi won. President Morsi immediately set forth on an agenda towards a variety of goals including changing the constitution and generally cracking down on dissent as well as other political groups. It was the traditional African/ Middle East "One Man, One Vote, One Time" agenda.

The Egyptian economy, which has a large tourism component, has not been doing well. Death spiral might be too strong but it certainly has not been doing well. People started gathering in Tahrir to protest. They called for President Morisi to step down and were ignored.

The Army then got involved and pulled off a soft coup. The chief Justice of their equivalent of the supreme court was put in charge and elections will be held on a date to be announced later. Much of the Muslim Brotherhood key leadership has been arrested or is still being sought for arrest.

This is not good. The Muslim Brotherhood are not going to take this lying down. Violence has already started. Don't know exactly where it is going to go but probably no place good. Violence may or may not break out into full on conflict or civil war. My guy says the Army can probably hold them down; after all suppressing the Muslim Brotherhood is something they have decades of practice at.

If this is a good thing or not I am uncertain. Honestly Morsi setting up a Muslim Brotherhood totalitarian Islamic state wasn't exactly a good path for world stability anyway. May just be a different branch of the bad tree. While possible that peaceful and fair (well by Middle East standards anyway) election in a reasonable timeframe with this turning out to be a one time thing is possible I doubt that will happen. An alternating combination of military leadership and weak civilian governments a la Pakistan may be the future.

Our government is intentionally not calling this a Coup which it clearly was. Maybe it's just that saying this was a preventative Coup to reinstate lawful civilian leadership is a bit complicated.

Fundamentally this brings up a weak point in American foreign policy. We say that we want democratic governments but in practice we want folks who do not rock the proverbial internatonal boat too much and generally can be dealt with. At least as often as not this means a strong man of some sort.

Aside from communicating with both sides and using soft power to try avoiding a complete blood bath I do not think we should do anything.

The riots in Brazil seems to have tappered out yet it is a bit too early to be sure.

Who knows what will happen next week. In particular I am paying attention to Egypt but who knows what else is going to happen.


Monday, July 1, 2013

The Sentinel

The Sentinel is a daily publication, featuring an eclectic arrangement of news and entertainment for freedom-lovers, patriots, minarchists, individualists and other "auditable" types.  Think the Drudge Report, but for a slightly different demographic.
Our distribution is 1:00 PM, CST, give or take a shake - depending on if the delivery boy has had a proper breakfast and if his bike chain has run afoul, again.
  
Check out the Sentinel today.

Sunday, June 30, 2013

The George Zimmerman Trial

I have been loosely following this spectacle. It has been pretty interesting so far. Of course I have some thoughts. As AM said the charges were clearly motivated not by belief of guilt or the ability to get a conviction but by political considerations.

Prosecutors almost universally have very high conviction rates. One could argue something about the injustices and biases in the criminal justice system which has some merit. However the larger issue is that individuals involved in the "system" (at all levels) do not put forth effort unless they believe it will result in a conviction. Trials, especially major ones, are a hassle and expensive. Sometimes this means people get off free, for that round anyway, because a conviction is not likely. That is unless politics/ public relations get involved. A case like the Zimmerman/ Martin affair spins up huge media hysteria which puts presume (probably from very high levels) onto ambitious political individuals. Moving on.

I am not a lawyer but it seems like Murder 2 was an over reach. That decision was probably political also. From the information I have this scenario seems to lie in the murky area between legal self defense and manslaughter. George Zimmerman created a situation, though not intentionally, where somebody ended up dead. In my mind that is almost the exact definition of manslaughter. That being said Zimmerman almost surely did not initiate the physical confrontation and probably had a reasonable belief his life was in danger at that time. The facts of the case as I know them could be seen as "reasonable doubt". Also it seems that in Florida if the idea of self defense is introduced the burden of proof for disproving the claim lies on the prosecution.

It should be interesting to see how this all plays out. This could get ugly. To put the potential into perspective Rodney King got his ass beat yet lived and LA burned. Trayvon Martin was, at least legally, a child and we have twitter, facebook and cell phoned for people to whip up hysteria and mobalize. This could get really bad.

People who live or work in the type of area where "urban youths" break things, start fires, steal and attack those who do not look like them when there is an injustice (real or perceived) to the Black community should be paying very close attention. You might want to get a bit ahead on work as this gets closer the verdict. That way if this goes to a mis trial or acquittal you will not fall too far behind by calling in sick for a couple days. For what it's worth I recommend claiming explosive diarrhea. It is gross so people do not want to ask about it also it is embarrassing so people figure a person will not lie about it.

What do you think about the while Zimmerman/ Martin affair? What do you think about the trial?


Monday, May 6, 2013

Israel Strikes Syria

Israel struck military targets in Syria. This follows an air strike Thursday.

It would be difficult for me to express exactly how bad this could be. On one hand Israel could have the tacic, albeit silent, consent of the US and several Arab nations in which case not much of anything will happen. However it is quite possible that is not the case at which point this could escalate local tensions and small scale violence or cause a world ending war with a nuclear component (this absolute worst case is very unlikely).

It is interesting that the first target was reportedly a load of Iranian missiles destined for Hezbollah. This doesn't matter really except that it shows the depth of complication this situation has. It is both a civil war and a proxy war. Seriously it's like a game of 3d chess with multiple sets of mortal enemies. Also this strike sort of puts a hole in the "Syria's AA capabilities are so great" argument. If Israel could conduct an air strike the US certainly could. Interesting stuff for sure.

Thoughts?

Sunday, April 28, 2013

Syria- No Easy Options

Analysis- No Good Military Options in Syria for the US
Syria is a large country with a robust anti aircraft capability.  Doing a "No Fly Zone" there would be a lot harder than tossing an F-16 into the air. In fact without significant preparation to destroy their AA abilities that F-16 would likely be shot down. This is not to say we couldn't do it. Sure we COULD own the skies over Syria 48-72 hours after beginning operations. It would take a fair amount of missiles, aircraft and effort. There is a distinct probability that a couple of those aircraft would be shot down. The point is a minimal cost/ negligible risk scenario like Libya would not be possible.

The Syrian AA capability prevents strategic strikes to support the rebel forces, knocking out C2 nodes, armor, etc. Also there is the unwritten truth that people need to conduct targeting then ultimately call in the birds to hit those targets. In today's environment that is problematic. 

Syria's chemical weapons are a concern or to some degree the problem itself. Destroying those weapons, if we can even find them with any accuracy, from the air is at best problematic. Realistically they would probably need to be secured by troops at least temporarily before evacuating or destroying them in place. Can't see us being willing to send in enough troops to make that plan work.

Just tossing guns at the problem is a technique. However as we've seen decades ago in Afghanistan and much more recently in Libya this strategy has some risks. Vetting unknown fighters in a timely manner with few personnel involved is not something that generally works well. This means at least some of the weapons would go to folks we do not want to arm.

So if No Fly Zones are prohibitively costly, securing chemical weapons more so and just tossing guns at the situation isn't a great choice what is left? I haven't even talked about Russia's influence which even further muddles the waters. Doing nothing is a valid realpolitik option. So far that has seems to have been our plan.

However the recent movement of 200 people from 2nd Armored Division shows we are interested in gathering data to make more informed decisions. All my info on this is open source so the exact composition of that group interests me. It might tell a lot about what we are planning. Fundamentally we don't send a lot of folks around the world in support of a plan to continue doing nothing. This means an action of some sort is becoming more likely.

Certainly this could get interesting.

Monday, April 1, 2013

Somebody's Killing DA's in Texas

The Kaufman county DA and his wife were found dead. Maybe it's drug cartel business moving north or something to do with the Aryan Brotherhood. One of his ADA's was shot in broad daylight two months ago. Is this related to that mess with the Colorado prison Executive director getting killed, by a rather white fellow, not so long ago? My gut says a large criminal enterprise( or two) killing important government officials in the same region right around the same time isn't a coincidence.

This definitely is not good.

Friday, November 11, 2011

I Can Haz Economic Recovery



I heard on the news today that our economic recovery is at risk. I wondered what that guy was smoking and if it showed up on drug tests. Unemployment is around 10%, real inflation (I don’t know about you but I can’t magically factor out food, housing  and energy) is nipping away at purchasing power, home prices are down and the markets are painfully in the hole.

Granted the economy is a complicated thing so it is best judged by a broad variety of indicators. To be blunt I would say that finding any indicator that is positive would be difficult and even then it would be an exception proves the rule sort of situation.

In normal people’s lives unemployment, followed by inflation (maybe inflation would go after home prices as home prices trickle into a lot of things but I went inflation first because most people are not buying or selling a home at any given time), followed by home prices and then the market are probably the indicators that matter the most.

Come to think of it the only really positive thing I have heard anybody say about our economy in some time is that it is probably a buying opportunity for real estate and stocks.

The phrase “don’t piss down my back and tell me it is raining” comes to mind.

Sunday, January 30, 2011

Retirement Fun for Boomers and Beyond

I should note that I do not have a crystal ball or a product to sell which will magically fix all the problems I am about to discuss. I am also not an accountant or a financial advisor or anything like that so nothing I say should be seen in that light. By all means read what I say and think about it. If you decide it might have some merit then consider it in your plans. However don't just mindlessly put a lot of money into this or that because I (or anyone else) talk about it if you do that you are a fool and deserve all the bad things that could happen. Be an adult and make your own decisions because you will have to live with them.

With the slew of municipalities being broke and having insolvent retirement funds, corporations dumping pensions whenever they get any excuse and a whole bunch of states broke I would be concerned if a pension was going to fund my retirement. Heck even the federal government isn't doing so great. Consider what would happen if you pension was radically reduced or even defaulted entirely.

Also if you haven't noticed the USA has a real problem with welfare social security and medicare. Like the level of problem Charlie Sheen has with vodka and cocaine. Social security was started by commie FDR with benefits at 65 when people on average died at 62. Also there were lots of workers to pay for it. The numbers don't work and are rapidly getting worse. Too many people are retiring and not enough are working to pay for them.

I imagine a lot of small things will be done to try and bend the exponential curve of welfare entitlement costs.The are to collect full benefits will likely go up, well off people will be charged on more of their income (I think it's 100k right now), and some sort of a means test will likely appear. I believe all of this will only succeed in kicking the can down the road a few years.

Also more significantly generations X and Y realize we are never going to collect meaningfull social security. As boomer politicians screw us with higher rates of theft contribution we will get pissed. Pretty quickly we will get into an age demographic that votes at a far higher percentage and are a significant force there is going to be a reconning. I am not sure how we will screw you the boomers but I bet we will. Best case is that they are going to be paid in inflated dollars. On a more gloomy side it could be significantly inflated dollars. Worst case for them the welfare social security checks will stop entirely.

My point here is that you should plan for retirement without counting on a pension OR social security. If you can collect either of them then go for it. However personally I would want to be able to support myself without either and just have them as icing on the cake.

In an even darker scenario the dollar and subsequently paper investments denominated in the dollar could take a nasty hit. Maybe it could be a slow slide or a fast crash, I don't know. In any case the have money in investments and live off interest/ dividends plan would fail in this scenario. To be honest this is relatively unlikely (slow slide to a currency among many versus world reserve currency and a moderate loss in purchasing power is more likely) but it would be a bad one. Most retirees would be devastated. The truly rich would generally be fine (somehow they always are) but middle and upper middle class folks would mostly be destroyed.

What can be done for those who are worried about this relatively unlikely (the extreme version anyway) scenario? The first thing that comes to mind is to have your basic financial house in order. For those close to retirement age having very minimal or no consumer debt and having your primary residence paid off is so huge. I watch a lot of those financial shows and the amount of people who are trying to retire with car loans and very little equity in their home (let alone having it paid off) baffles me. If you are debt free and retire then something happens so you face a drop in income at least this way you can shred your expenses. It would suck but as long as you can pay property taxes, fuel and food you will be OK if not happy. However if your pension fund fails/ the stock market and subsequently your investments collapse and you have all sort of stupid consumer debt and a high mortgage payment it will get ugly fast.

My next thought also flows well with what is likely reality for most boomers. The reality is that many of them saved like they have a cushy defined benefits retirement plan when in fact they have a 401k. Too many of them continued to upsize their home and used home equity like an ATM instead of paying off their home. Fundamentally a lot of people are approaching retirement age and just can't afford to retire, at least in the way the Greatest Generation did. Some will be able to retire and live modestly (versus lots of travel and recreation) while others will need to keep working in some capacity or another.

The advantage is that earned income (vs from dividend's, stocks, interest, etc) is pretty flexible. You can, at least in theory, renegotiate the deal for future services to reflect a changing economic situation. That could mean getting paid to reflect the real value of currency, in a stable currency, PM or barter. Hard to do that with your pension or retirement account. If something this ugly happened a lot of people would be headed back to the workforce in a seriously damaged economy. The way to get ahead of the game would be by working in some capacity already. Maybe you could work part time, consult or just have a couple clients. Even a modest income could (in addition to making todays retirement economics more comfortable) be the difference between making it and not.

Where you choose to put your money is important also. I am not against precious metals for an alternate currency/ store of value but have concerns about them for retirement. The reason is that they do not benefit from interest, dividends, etc. Every silver dollar or gold eagle you spend is coming strait out of your principle.

The reason that truly rich (maybe wealthy is a better word) people do not get wiped out is that they own businesses and real estate that produce income for them. If currency values change radically a solid business will continue to earn some money. People will continue to rent apartments, homes and commercial space.

Things that produce income are good things to buy. A lot of the downsides of real estate (and to a lesser degree businesses) are minimized if you pay cash. I would rather have some money in the bank and the market and a modest rental house or twelve in decent areas earning me income than a bunch of money in the market.

I don't know what is going to happen so I hesitate to suggest putting all your eggs in any basket. If your finances are in order, you earn a bit of income and have at least some of your money in tangible things that produce income odds are you can weather whatever comes.

Thoughts?

Sunday, July 4, 2010

Oh The Stuff That Pops Into My Head

"I'm in it to win it like Yzerman. Can drink about 15 Heinekins"
- General Petrayus didn't quite say that but it would have been a lot cooler if he did.

Monday, April 12, 2010

Reader Question: Hyperinflation and Currency Devaluation

I love the photos and captions - esp. the one about the fighter plane. Keep 'em coming. Since my eldest got out of the Army a few years ago, we've been a little short of military humor.
Now a question - I dont really expect you to know this answer, but no one else I've asked has had one for me. Maybe you know someone you could ask.
Anyway - the scenario:
The Govt decides to devalue the dollar. We wake up one morning and we are told that we have to turn in all our Federal Reserve notes and we will be issued new currency at a, say, 2:1 ratio. That is, we turn in two dollars and get one dollar in new currency back, or a 50 percent reduction in buying power. (This is pretty much what happened to the people in North Korea recently and it didn't turn out well.)
What happens to all the coins we've stashed? (I heard that when this happens, the govt pretty much ignores coins because few people have more than a small stash on their dresser or  in their pockets or something.)
What happens to govt pensions? Say Im a retired fed getting $2K a month. Do I now get $1K or do I get $2K in new money? Since it is directly deposited, it's all ones and zeros anyway until I cash it out.
What about Medicare or Social Security recipients? Are their payments cut in half or just converted to new money in cash? How would this affect their debit card system?
What happens to fixed mortgages? Do they stay the same amount and you just have to pay them in new money? Or, since you had to turn in your old money, did that magically cut your mortgage in half, too? Remember, you have a contract with the bank on the mortgage.
I know how it affected other countries (like Argentina - ferFal wrote about it a lot), but that isn't quite the same, because the conversion was based on the money's relationship to the dollar. I.e., the peso went from 1 peso to one dollar, to 3 pesos to one dollar. That just resulted in basic, ordinary. crappy inflation.
What do you do when it's dollar to dollar?
Do you think the Fed will just use inflation as it's Tool of the Month, rather than actually devalue and reissue the currency? There has been a lot of discussion on the doomer blogs about the govt already having different colored money stashed for such an emergency....In fact, one of the storage facilities is supposed to be a big building down the road from where I live. We know what it REALLY is (nyahaha).
Thanks for your thoughts.
SaddleTramp
TOR here: I think Saddle Tramp wins the award for the hardest question. Usually reader questions are hitting from a T easy but this one is a real fast ball. Anyway first I think it is important to say that nobody knows what could actually happen. We are talking about a very complicated scenario. The best we can do is to look at what has happened and our knowledge of America to make some informed guesses.

First of all I think we need to look at how currency devaluations work. I would say that currency devaluations are more of a desperate last stand than an intentional plan. Basically due to government overspending usually on a large military or various welfare programs (sound a bit familiar?) the government can't bring in as much as it is spending so they borrow and print. Inflation starts getting really bad and the currency becomes close to worthless or entirely worthless. The government then comes out and says that they made some mistakes  blah blah blah and in order to address this crisis they are going to re issue the currency. It would be more likely that a New Dollar/ Blue Buck/ Amero/ Whatever would be issued and we could change in our old and close to worthless dollars at a fixed exchange rate. Governments do not do this unless things are really out of control. I imagine an exchange rate more like 10 or even 100 to 1 would be likely.  
For various South American nations (they pretty much all did it at some point) this devaluation usually meant changing how their currency was pegged to the dollar. I am sure if this happened in America some theoretical "we are adjusting the value to get more in line with current world blah blah blah" stuff would be said. However that doesn't matter. What matters is that overnight you lose a zero or two off your cash savings. Governments say that in theory the new currency is worth more (and at the official exchange rate it is) but it never seems to quite work that way. In reality the new currency isn't worth much more than the old one and you have a lot less of it. Either the free market values the currency where it should be (lower than the government values it) or we all of a sudden have price controls.  People have their life savings destroyed overnight.
As for coins. If I recall in Zimbabwe they did not re issue new coins so people were searching to find old Zimbabwean piggy banks and coffee cups (or whatever the cultural equivalent is) full of them.  Either coins would be re issued or they would not, really it is anybodies guess.

When it comes to pensions. It is worth noting that hyperinflation and currency devaluation are wild and crazy times. Some people get totally screwed and other groups manage to get an OK deal with little rhyme or reason except their influence with those in charge. Congress and a couple of other influential groups might be able to wrangle a discrete but comfortable deal but most folks would likely get whatever the official rate is or lose their pensions entirely.
To be honest this is really the only scenario where middle age and retired (but not yet feeble) people are in a worse spot than the young. In general assuming they have made good choices middle aged and retired folks have had decades to build skills, store deep stores of supplies, maybe set up a nice retreat and become financially stable. However these folks are far more vulnerable to a hyper inflationary/ currency devaluation scenario because they do not have time to recover. As a 20 something a currency devaluation would suck for me for a few years as I would lose savings but I have 30+ working years to get into a good spot. However for my Father it would hurt a lot. He would seriously need to re reevaluate in what sort of lifestyle, when and even if he could retire at all. For my Grandmother the picture is even worse. She would be OK but she has significant savings in addition to her pension and some real estate but that is not where most people retire. For a person who relies on that check in the mail every month having it be worth far less is a serious problem.

I would say the people who fare the worst are those on a fixed income (well except those who get killed in the protests/ riots and increased crime rates but in the big picture that group is usually fairly small). Remember the pictures of old Russian women sitting in the street begging? They were doing this because the check they got every month was at the official exchange rate which doesn't reflect reality (unless there are price controls but that is a whole different mess) and probably couldn't feed them for a week, let alone the whole month. I can not express what an ugly situation this is for people on a fixed income. Their savings are gone and the check they get every month (assuming they even still get it) buys far less than it used to.
In terms of America I imagine Social Security would stay around as it is called the 3rd rail of politics with a very good reason. However the checks old folks get wouldn't buy much of anything because after being converted to the new currency and adjusted for the official exchange rate they would be a small fraction of what they are now. 
Likely Medicare would just become underfunded and really dysfunctional. People would get health care coverage but good luck finding a Doctor or getting an appointment. Far more scrutiny would be put on all but the most basic procedures and don't even think about seeing a specialist. 

As for fixed rate debt such as mortgages. The conventional wisdom is that your mortgage would just become really cheap which would be cool. Under this theory a mortgage for 150,000 dollars would go to 15,000 Blue Bucks. However as I mentioned above this sort of climate is a wild and crazy time. All contracts would have to be changed to reflect the new currency. Groups with influence can get a paragraph put into one of the numerous pieces of legislation which would be flying through our legislatures to protect their interests. Bankers as an industry have a huge amount of influence and they sure fared pretty well through our most recent troubles. Some sort of exception which made mortgages or other debt be converted at a preferential rate or converted fixed rate debt to have an inflation index is possible.

Our money supply has grown a lot recently but we are a huge economy and a very powerful nation.  When the economy starts to recover and all this newly created money starts moving through the system we will have inflation. I think it is worth noting that hyperinflation is ruinously high inflation. There is no precise numerical definition to hyperinflation but 50% a month is a number lots of folks seems to use. It is just a question of when we shift away from the current trend of massive deficits. When the economy starts moving again interest rates could be raised to shrink the monetary supply and get inflation under control. 

As for what I think is going to happen. The situation I see as most realistic is that  the economy starts moving again at some point at least a year from now, probably 2-5 years off. We start to see inflation rear its head and sooner or later our government will decide to deal with it. They will want to do something gradual in order to not totally slow the recovery and it will take awhile for it to get to the point where it will work. Likely that critical mass will be a couple percentage points higher than anybody would like. I see double digit inflation as very probable and late 70's/ early 80's era inflation around 20% as realistic. However if we continue running at massive deficits which grow the money supply the situation could well be worse than that.

Hopefully this at least gives you an idea of my thoughts on this rather complicated question and a bit of food for thought.

Saturday, January 30, 2010

Maybe It Is Premature To Bet On The Euro

Greece is bankrupt. The regional currency they are a part of doesn't leave much room for economic maneuvering. Also their high level of socialist spending doesn't help matters any. To me this brings up a couple of interesting points. First the Euro is fairly new and relatively untested in times of economic turmoil. Secondly being part of a broad regional currency takes a lot of the traditional tools to fix economic problems away from a country.

Right now the dollar is back up to about .68 Euro. As the true problems of the Euro zone (they got into all the same stupid stuff the US did, just later and to a smaller degree) come to light over the next year it would not surprise me if it slips up into the .75-.80 range. 
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