Sunday, September 19, 2010

The Train At The End Of The Tunnel

New Supply Floods U.S. Housing Market: "With permanently depressed wages, massive unemployment, the most over-supplied market in history, no personal savings, and an economy in the early stages of a Greater Depression, there is no “light at the end of the tunnel” here – not in five years; not in ten years.

If this nightmare already sounds as bad as it could possibly get, you’re wrong. I (and other commentators) have said for years that reckless U.S. money-printing by the Federal Reserve, and even more reckless fiscal policy from the U.S. government has made U.S. hyperinflation inevitable.

With the entire U.S. economy drowning in $60 trillion in total public/private debt (plus an additional $70 trillion in “unfunded liabilities”), there is no way to even service this mountain of debt with the U.S.’s (relatively) tiny $13-trillion economy. The U.S. government must drive the U.S. dollar down to near-zero – so that all these U.S. dollar-denominated debts “evaporate” with inflation. However, what also evaporates is the wealth of all Americans (or at least all wealth which has not previously been converted into gold and silver)."