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Location: Pantego, Texas, United States

Monday, May 18, 2009

I see a lot of predictions the the world is going to stop buying US debt. And China, Brazil and Russia would like to displace the dollar as the currency for international trade. It appears that the US is going to monetize its debt because it will be impossible to raise taxes enough to pay down the enormous debt that is growing out of control. That is an amazing development. Monetizing debt didn't work out well when nations did that in the past. The Weimar Republic did it and got a depression with hyperinflation during the 1920's, leading to Hitler taking over the government. Recently it hasn't worked out well for Zimbabwe. There is a good chance that we will soon have Carter-like stagflation on steroids.

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