Tuesday, March 24, 2009

Why would any creditor agree?

As the days go by, it becomes clear that the Obama "plan" to erase his projected multi trillion dollar deficits (up to half of each projected annual budget is deficit spending!) is the same as the Carter "plan" from the '70's - - inflation and bracket creep.

Printing trillions of dollars to pay the government's bills (Carter only printed billions) will devalue the dollar. Inflation will go wild. Although your purchasing power will decrease, your paper income will increase, as will your tax bracket, resulting in increased payroll tax revenues. Most importantly, the dollars with which we pay back the national debt will be worth less than the dollars we borrowed.

A good deal for the borrower. But, why would any of our creditors agree?

Answer: They won't. China will refuse to hold, lend or accept repayment in dollars.

Wait and see.

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