Economy, Satire

The Other Shoe Drops

For months I’ve been echoing the warnings of Peter Schiff and others:  when China stops buying American debt, we’re in deep, deep trouble.  The possibility for hyperflation, prices rise by double-digits on daily or weekly measures, becomes palpably high.

Even though this article from IHT failed to suprised me, I have a sick, frightened gnawing in my stomach:

China has bought more than $1 trillion in American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home – a shift that could pose some challenges to the U.S. government in the near future but eventually may even produce salutary effects on the world economy.

Thanks to Hank Paulson’s Bailoutpalooza followed by Obama’s promises to pile on more bailouts and $1 trillion or more in stimuli, the US single-year deficit for 2009 will be between $1.2 trillion and $2.5 trillion.

There are three ways to finance that deficit: tax, print, or borrow.

A tax increase, as we have been told, could push us into a deep depression.  We don’t want that.

Printing $2.5 trillion in new cash would lead to hyperinflation.  Unless you want to buy bread for $3,000 a loaf, that’s not good.

Borrowing delays the reckoning.

One way or another, we will deal with depression, hyperinflation, or–like Germany in the 1930s–both.  At least in a depression with deflation, cash will save you.  In hyperinflation, it’s every man for himself.

Author: William Hennessy

Co-founder of St. Louis Tea Party Coalition and Nationwide Chicago Tea Party Persuasive design expert Latest book: Turning On Trump: An Evolution (2016) Author of The Conservative Manifest (1993), Zen Conservatism (2009), Weaving the Roots (2011), and Fight to Evolve (2016) I believe every person deserves the dignity of meaningful work as the only path to human flourishing.