I'm with the Austrian deflationists in thinking we're going to have an L-shaped recovery (economic recession will stop at 65-70% of previous GDP followed by a decades-long plateau).
We've spent all of our GDP through 2019 with the bailout. Consumer credit is maxed out and consumer spending (2/3 of our GDP) continues to decline and is not coming back. No one will buy our MBSs anymore, so we'll be unable to re-blow the housing bubble.
I'm thinking we're going to have Japan's economy for the past 20 years writ large here.
Well, the entire world needs a non-fiat currency that can't be manipulated. The Chinese are pushing for a new reserve currency that is a combination of a lot of other currencies, including ours. One currency would be able to gain on the others.
I read that the Chinese increased their own money supply by 28% last year. So it appears to be something like the early 30's again where countries compete in irrational manners. Even the Swiss are engaging in the craziness.
Delaying the inevitable? We pretty much have to default on our debt sooner or later, or we have to find a way to return to fiscal sanity, ie. increasing our exports and cutting our expenditures. There's no way that'll happen. It hasn't happened in a long, long time.
This may be a compelling reason for a global currency -- becoming dependent on exports puts one at the mercy of the currency abuse in another country. I'm sure the Chinese would prefer not to be stuck with all those depreciating dollars.
A global currency backed permanently by gold may be what the world will have to eventually embrace or there will be NO currency that anyone will accept.
Disagree. Something always fills the void. It's the law of competition. There is simply no way to be isolationist in the same sense as a century ago. Economies are too inter-dependent. Someone's going to make a leap and come jumping into the void with a currency people will want to accept.