| In economics, inflation is a rise in the general level of | | | | but, also less demand for copper, oil, steel, concrete, |
| prices of goods and services in an economy over a | | | | etc. and thus, they could still have profits even with |
| period of time.The term "inflation" once referred to | | | | fewer exports. They may not be large for years but, |
| increases in the money supply (monetary inflation); | | | | there are two sides to U.S. consumption. It drives up |
| however, economic debates about the relationship | | | | both the price of goods and the price of things to |
| between money supply and price levels have led to its | | | | make goods with when we consume a lot. |
| primary use today in describing price inflation. | | | | Peter Schiff goes as far as to say the world's |
| In economics, hyperinflation is inflation that is "out of | | | | exporters would actually be better off without us |
| control", a condition in which prices increase rapidly as | | | | increasing demand for raw materials so much due to |
| a currency loses its value. Formal definitions vary from | | | | our consumption. |
| a cumulative inflation rate over three years | | | | However, just as it takes a depression for us to go |
| approaching 100% to "inflation exceeding 50% a | | | | from debtor nation to creditor nation, it will take a global |
| month." In informal usage the term is often applied to | | | | recession at the minimum to go from a global |
| much lower rates. | | | | economy dependent on us to one that isn't. |
| I think a lot of things will be much higher in price, | | | | Consumption is touted as this big "cure all," but, it isn't. |
| including oil, next year or maybe later this year. But, | | | | Production and making things faster than debt rises, is |
| don't confuse price with value. | | | | the cure all. Spending less than you earn, saving so you |
| If there is any economic recovery globally and the | | | | can spend in down times, budgeting, and sensible |
| dollar is falling, we could see any possible price you | | | | investing vs. "gambling" on stock moves is the "cure." |
| want to imagine but, it would be in dollars, and not other | | | | Less government, not more, less government spending, |
| currencies. | | | | not more, fewer programs not more at the federal |
| There are several analysts that are predicting a large | | | | level is what we need. |
| drop in the dollar and that will even give the markets a | | | | If we aren't already there then soon we will be more |
| boost. Using an extreme example, you could see | | | | of a drag on the global economy than aid to it. Peter |
| DOW 50,000 by the end of the year if the dollar gets | | | | Schiff, if not right now, soon will be. |
| dumped but, while you would have seen over 40,000 | | | | Think of it this way. You make things. I buy from you |
| more pts. you couldn't buy any more at 50,000 than | | | | but, to keep buying from you, you have to keep loaning |
| now, if you sold it and probably a lot less. | | | | me money from what I pay you. To make it worse, I |
| The price of the DOW doesn't reflect value, just price. | | | | pay you back with devalued money so that you are |
| Oil is the same. If there is a recovery globally, oil | | | | even losing buying power with every new loan to me. |
| demand will rise and with all the supply being cut now, it | | | | How long are you going to keep selling to me? You |
| will cause oil to go back up for all nations but, if the | | | | end up better off making something else and selling to |
| dollar is falling, even if they don't pay more, we will. We | | | | somebody else or just making the stuff for "trade" and |
| could pay $1,000 a barrel or $10,000 a barrel or $1 | | | | "sale" with people you buy your raw materials from. |
| million a barrel as that is what happens when a | | | | In the last couple of years, one oil nation, Venezuela |
| currency collapses. | | | | has done just that. It "trades" some of its oil instead of |
| For those who say that would crush our economy. | | | | selling it for things it needs from nations that don't want |
| Correct 100%. That too, is what happens when a | | | | to "buy dollars" to buy oil with and that have materials |
| currency collapses. The world basically moves on | | | | that Venezuela needs. |
| without you. | | | | Iran stopped using dollars, too. It even got Japan to buy |
| If that happens to the U.S. then the world will move on | | | | the oil it gets from Iran in Yen as well as sell in euros to |
| but much slower than before. Because we are such | | | | other nations. |
| large consumers there is good news and bad news in | | | | In short, there are no certainties going forward except |
| that. | | | | that we have to change the way we run this nation |
| The countries that move on would find fewer buyers | | | | from top to bottom. |