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alstry (35.69)

Inflation NOT an Option for the Fed

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8

May 25, 2010 – Comments (4)

By cutting off credit to the private economy, income to the private sector is shrinking rapidly and America's tax receipts are evaporating.  It is becoming more and more difficult for America to meet its obligations...both public and private.

MOODY'S: Debt Level, Spending Pose Risk to America's Aaa Credit Rating...

HOWEVER:

The Fed cannot pursue a policy of inflation because America's entitlement obligations, including rapidly growing Social Security and Medicare/aid are indexed to inflation.

Thus, any rise in inflation would be offset by equally rising entitlement payments.

America's only choice is to decrease the obligations or flat out repudiation.  One way to decrease the obligations is through deflaton......another way to repudiate or void the contract altogether, and all contracts for that matter, is an Act of God or War.

Here is a War update from Drudge:

US Prepares for Largest Battle in Afghanistan...
NKorea bracing, severing all ties with South....
New Chinese aggression..
Israel drill raises tensions...

OBAMA TO SEND 1,200 TROOPS TO MEX BORDER...

Any military guys out there knowledgable about the importance of sealing the boarders prior to any major action?

4 Comments – Post Your Own

#1) On May 25, 2010 at 10:19 PM, rd80 (99.10) wrote:

Thus, any rise in inflation would be offset by equally rising entitlement payments.

Only if the rise in inflation is reported correctly.  It is the government that calculates inflation rates used to escalate those entitlement payments. 
To paraphrase Stalin -  those who see inflation determine nothing, those who calculate inflation determine everything.

The answer (which is very consistent with many of your posts) is the government will inflate away the debt while publishing artificially low official inflation numbers to keep a cap on entitlement payment growth.

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#2) On May 25, 2010 at 10:52 PM, oshiri (< 20) wrote:

And don't forget Comrade Chavez's Venezuela . . .

     Boeing's latest robot helicopter, the A-160T Hummingbird, has been equipped with the "Forester" radar that U.S. Southern Command wants to use to track activities in the triple-canopy jungles of South America.

http://panamericandefense.files.wordpress.com/2009/06/a160-01-1.jpg

     So please explain to me, all you Leicester Longwools, why is it that the military command that oversees South America needs a robot helicopter to see thru three layers of jungle?

     I must say Sempai Alstrymous, this is all exciting. 

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#3) On May 25, 2010 at 11:09 PM, oshiri (< 20) wrote:

It is high-yielding and stylish . . . 

http://www.leicesterlongwool.org/ 

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#4) On May 26, 2010 at 1:14 AM, SamTheHobbit (30.80) wrote:

Agree with rd80, which is why the US bond market is even more risky than the US stock market.  Real inflation is much higher than the official estimate, so US bonds only guarantee a sure loss over time.  The only uncertainty is how big.

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