IMHO The One-Two Punches of Inflation/Deflation Could Knock Out the US Economy...

[Blackhatjack]

As more $$$ is issued in the billions by the Fed, the relative value of the dollars in circulation goes down and the price of necessaries goes up.

As people can no longer afford the necessaries they begin living day to day any way they can, converting dollars to useful commodities as quickly as possible.

This will have a negative affect on people paying their mortgages and credit card bills. AS the pool of potential real property buyers shrinks, the inventory of homes for sale will continue to rise --pushing sales prices down. THis will result in deflation of the value of all housing in this country.

Since credit issuers will be suffering from huge defaults in payments from borrowers, if they can find a way to survive, they will just refuse to issue any new credit. THis will destroy the pool of buyers for anything other than necessaries, and result in crashing consumer prices for non-necessaries.

Layoffs and unemployment will spike as the economy comes to a screeching halt. As unemployment rises and prices fall as people sell everything at 'firesale prices' deflation will rule the day AND make it possible for the wealthiest to pick up valuable assets for pennies on the dollar.

So the poor will get poorer, and the ultra rich will get incredibly richer.

THis is an extreme scenario, but it could happen exactly as laid out above --and the worst of it would likely occur under the next Democratic President. More tax cuts are nto the answer. Those who have profitted most under the last 7 years of Bush must be required to participate in the actions necessary to turn the economy around.

Vote accordingly ...

[msongs]

1. if you work and save you are punished, if you speculate greedily you are bailed out nt

[Deja Q]

2. An expensive condo building nearby not only has many units for rent,

the whole kit'n'kaboodle is for sale too.

A couple stores are offering leashes.

2 posh homes are for sale, prices reduced...

Another 2 are foreclosed...

Aren't the rich suffering right now because of the unstable market they helped to create?

[LakeSamish706]

3. The problem is that if the US economy goes down I think it will take the...

rest of the world with it. If anyone has been paying attention to markets today, you will note that all European and Asian markets have dropped significantly over nite. The Canadian TSX has been down as much as 635 points today, and if the US markets were open they would no doubt be way down as well.

[ayeshahaqqiqa]

4. World wide economic realignment

I don't think the rich will get off scot-free, either. There were riots in the 30s (Bonus Marchers, anyone?) and then the rise of dictators and fascism (hey, that's already started). What I see is the rest of the world cutting their losses as fast as they can, and heading to the hot markets of China and India, leaving the US as a poor debtor nation to be ignored when it cannot be exploited.

[Deja Q]

5. On the plus side,

the Indians and Chinese who think they have it real great... they will be "betrayed" too.

Unless globalization helps out everybody in the end, when will the transition finalize? Or is it in the process now? Is it what they are thinking? What we are thinking? Something else? A total restructuring? Asian markets are falling right now too...