I liked Scat, but he is blinded by what is right in front of them...FWIW, he basically invited me to be put on his ignore list since I wasn't going to stop with my criticism of the boomer generation's fixation on always choosing the easy route in addressing the issues... Basically I can agree with him on the other 95% of the issues, but I've seen him erupt and put others on ignore at the slightest provocation...so that's that.
You guys actually had a good thing going there and from what I could tell, you are very similar in your views. The difference seems to be who to blame (boomers vs. government), but the conclusion was basically the same. I say job well done!
Let me explain more clearly America's real relationship with China. The Chinese want to export to the United States for their peoples employment; in order to export they must take dollars in exchange for goods, with these dollars they buy treasuries; what else can they do with a trillion dollars? They are stuck with dollars, so they park them in treasuries. The United States could bring about China's total collapse overnight by simply banning Chinese imports - and it would mean nothing to the United States, they have Mexico, etc. The importer has all the leverage, exporters are at the mercy of importers. China has zero leverage over the United States, they are never getting that money back and they know it, they aren't stupid; but whats their choice, stop taking dollars and completely collapse their economy overnight? Of course, as I said the Chinese aren't stupid and they are attempting to re-align their economy towards consumers, equaling less exports; however, it will take decades to implement this vision.
We have a world debt supercycle acting like a black hole demanding constant QE and ZIRP just to stave off deflationary collapse into depression.
Very good points, though I would say ZIRP is the symptom of the problem, that being a debt supercycle; without ZIRP the whole house of cards implodes.
Perhaps not only the debtors. If we end with hyperinflation and/or currency destruction.... almost everybody whose assets are denominated in $USD will have the buying power of their money destroyed and become effectively bankrupt.
Hyperinflation? Don't get me wrong I was one of the loonies in 2008 yelling to anyone that would listen that QE would turn US/UK/EU into Weimar Germany. But here we are 8 years later with 0% inflation. Commodities getting crushed. In all my years in the market the one adage that always rings true is 'the markets go where they are going to hurt most people'. When Everyman and his dog is expecting hyperinflation it kinda makes sense that the reality would be zero inflation. That's trading! Kicking myself it didn't occur to me. Can't really see where the hyperinflation is coming from personally. Unless we get another 5 or 6 huge rounds of QE
European sovereign debt sold off around 100-130 percent debt to GDP. When it's our turn, and overseas holders dump, yellen will monetize the difference to retain stability. That will push the dollar over the edge. It may not be hyper inflation. But the price level could easily double or triple within a few weeks.
Not saying you are wrong. But you cite Europe as a road map for what may happen in the US. But Europe has even lower inflation than US (despite the bond collapse you referred to) and they still have QE pumping the printing presses