Ries said:
I would like to point out another reason for inflation, both in Argentina and in the USA- China. The chinese economy is growing at a prodigious rate- around 10% per year. A lot of the Argentine inflation is caused by wacky local regulations, but a lot more of it is totally beyond the control of the K's or Obama.
i think you may be over playing the connection between the US and china as a cause of inflation. we need look no further than our own government spending to understand the causes of inflation.
stop government spending. it's as simple as that. don't spend more money than what you take in from tax revenue. we don't need to look any further than that.
and if we have a major trade imbalance with china, then reduce it. but they won't reduce it. why? because our govt. can create and then EXPORT the inflation, by buying cheap chinese goods then getting that money back in the form of loans.....the best of both worlds, until of course our debt becomes untenable, which they all knew would eventually occur at some point - you just don't want to be the schmuck in political office when that happens.
this year alone, our deficit spending is projected to something like $1.4 trillion and that doesn't count for what we're spending on the wars. so in total you're talking about a one year $2 trillion deficit. that is pathetic.
i will agree with you that it is mainly beyond the control of obama but not because he couldn't affect real change if he really wanted to. the simple fact is that he's nothing more than an employee and it's not in his job description to do what's really good for the US - i.e. let the pain come now in order for the healing to begin as quickly as possible. the more you stretch this out, the more painful it's going to be when the collapse occurs.
no politician is brave enough to do what's right because it would mean being extremely unpopular and disliked. he/she will only kick the can to the next politician and let them have to worry about it. obama has spent in 2 yrs what bush spent in 8. it wouldn't be as bad if we had actually contributed to our infrastructure for future growth just as FDR did but we haven't even done that. we spent a bunch of money that inflated the balloon for a bit and now it's deflating, which means another round of QE is most likely on its way.
