It's deficit spending now more than ever. We are creating money that doesn't exist - anywhere. The demand is to pay for things we can't afford and don't have the money for, in doing so the USD continues to lose value. Until the U.S. Gov't can balance the federal budget, the USD will continue it's decline. It's being dilluted rapidly, very rapidly.
I'm with you coleguy. The USD continues to lose value? Value measured how? If the USD is losing value at the rate people suggest - seems to me one of the best investments a person could make is incurring as much longterm fixed rate debt as possible.
Although incomes will surely fall, inflation will remain with us. Energy prices have risen slightly causing food costs to rise. Medical costs have risen and will continue to do so. As a person on a "fixed" income, I am very aware of inflation eroding my life. The way inflation is measured falsifies reality. The fact that Yachts, Airplanes and Diamonds cost less does not reflect the offsetting rise in the price of necessities. There are 2 distinct worlds here now that are becoming more widly divided. Those with wealth and those without. The war on Poverty is nearly over. The rich Won.
According to the Federal Reserve website, year to date M1 is up around 6% and M2 is up around 3%. The data doesn't support the bloggers. Another thing to consider is that problems with rising debts have historically be associated with deflation, not inflation. Also, the Fed is far better at managing these things today than central banks have been in the past. Will we have hyperinflation or deflation? I put the odds at 50/50 so it is best to be prepared for both.
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