Economics and the future of humanity, what can we expect?

cancer81 wrote:

Source Thread: 'Rating downgrade - beginning of the end, hyperinflation next'
how about some comments from you instead? to kick this off?
hey ForeverAlone!!
this guy!! this is the guy, you need to talk to!!

cherry6 wrote:

USD/EuroZone 'Rating downgrade - beginning of the end, hyperinflation next' [alt link]
Will communist China next rule the world, will we have hyperinflation and then the rise of a new world government and the rise of a new world currency?
Prey tell, what are the challenges facing the new generation who are now faced with the debts of their parents generation.
Will new generations faced with the debt problems of previous generations sill respect the ideologies of their elders?
Do politicians of today have the necessary answers?
- comments?
Pray tell....

Everything tt I wrote in my FP is a possibility. With China holding more USD debt than any other country, China can easily sink the USD economy by simply selling the USD debt it holds on the open market- one will then see overnight hyperinflation in the USA- less any other draconian measure by the US such as using military means for instance: e.g. declaring war on China and thus declaring all US debt held by China as immediately null and void (can U even imagine the chaos that this will precipitate in both giant countries)?- Americans will be the new Greece and the Chinese will topple their govt in retribution for a >US$3Tril colossal mistake, the Russians and the Indians will then have to decide which side to take- the recipe for WW3 as I see it - there will be massive mayhem in the world (this is digression I agree).

Anyhow, I foresee the debt crisis as one big reason why the young generation of tomorrow might not respect their elders- the theory that politicians use: that the economy can simply be stimulated by borrowing (government/ sovereign debt) and then that debt be solved by simply printing $$$ to inflate the GDP (nominal, not real GDP mind U) is plain dishonesty. The poor and the middle class have little if no assets that are inflation resistant unlike the rich who own massive properties, gold and other investments- the effect of inflation in currency supply (printing $$$) is simply a silent tax upon the poor and the middle class to erode their retirement savings. The entire concept of borrowing/ printing to stimulate the economy is simply premised upon reckless economics perpetuated by morally bankrupt political leadership.

Now faced with sudden government spending cuts, a gargantuan federal debt and perhaps a sudden increase in taxes, I wouldn't be surprised if many of the young and jobless grow in hatred for the inept decisions of their forefathers in electing the wrong persons to government- persons of a glib tongue but whose moral conscience is zilch.

Perhaps the real solution as I've said before is perhaps a debt haircut so that overnight government debt is halved. Commercial banks unable to repay their liabilities will have to be liquidated and then nationalized- their depositors will receive up to whatever is backed by govt guarantee ($50k per account in SG case). Pensioners will be heart broken due to pension fund losses in govt debt (haircut) but there is no choice, the large govt debt in the world is just unsustainable.

An increase in overall consumption tax encompassing progressive property taxes for the top 20% expensive properties will help raise money that the got would otherwise have risen from bond markets and perhaps a cut in fuel subsidies will help save govt $$$. Only the very poor should be helped and $$ be spent on schemes to educate and unite society.

There is no other way to reinstate faith in 21th century economics except a promise by govt not to borrow and the print (aka steal) money no that the gold standard of currency exchange died and was buried in 15Aug1971 [see: Bretton Woods system]- govts henceforth must promise not to steal $$$ for the poor but raise $$$ through fair and transparent taxes.

Without faith in government and its ability to manage the economy fairly ad transparently, there remains no hope for 21th century economics, let alone the future of humanity.

The major religions in this world have much to teach, all we have to do is to begin by talking to each other nicely, though if poorly approached... Blind Men and the Elephant [YouTube] can have a negative outcome as well.


Exodus 20:15 [NIV] "You shall not steal."

It is pointless for governments across the world, through mindless inflation in currency supply, to steal from the middle classes and poor to help the poor by presumable 'stimulating the economy'.

If governments need money, then transparently increasing taxes on either income or consumption is necessary (don't forget the property part); borrowing limitlessly or printing $$$ (stealing from the poor) is a despicable and shameful means of raising money.

The answers are out there, if only we seek. Shouldn't we have literacy, shouldn't access to information be free?
Without these, there is no participative democracy, without which, all society is mired in trickery and deceit.
My religious book is open, it shall soon speak.
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25June2012: 'Rating downgrade - beginning of the end, hyperinflation next'