It actually turns out I am not the only one worried.
But economists have warnings for Obama’s public works stimulus plans as well as the bailouts. That includes some economist worried, though they are split, that the bailouts, liquidity infusions and stimulus outlays — which now total $8.5 trillion — could result in inflation and a weakened dollar.
Peter Schiff, an economist and chief global strategist for Connecticut-based Euro Pacific Capital, worries the bailout and stimulus money could result in hyper-inflation because of all the money being pushed into the economy by central banks and the federal government. Schiff worries the markets and consumers could lose confidence in the U.S. dollar.
“It’s very easy for the public to lose confidence, especially when the government is printing too much of it, which is what is happening in our economy. The government is trying to create additional consumer spending and they are trying to do it by printing more money,” Schiff told Toronto-based IWT-Real News Network.
Schiff, who predicted the current financial and subprime downturns, said a worst-case scenario would be an inflation-fueled depression of the U.S. economy.
Hyper-inflation occurs when prices rise as currency values and confidence diminish. Hyper-inflation has periodically hit Third World economies such as the present situation in Zimbabwe and in post World War I Europe including Germany.
I know, I worry too much but this really has me concerned. What is going to be the cost to us of all these bailouts and economic stimulus? Will the cost be too high? How can we protect ourselves? I wish I knew the answers to these things.
Get the banks to foreclose the homes, sell them for whatever, reapraise property values for todays value and cut spending at ALL levels of government. Spending taxpayer money to avoid saying you made a mistake is stupid, wrong and very expensive. Besides I don't think there are enough cows and pigs around to tax our way out of this one.
Just FORECLOSE the damn homes and move on!
Mike in Milford OH
w/Ziggy the non-farting Office Kat.
I'm appalled at the idea the way out of this mess is to encourage more spending of money that isn't there for things that in many cases aren't needed, beginning with those economic stimulus checks many of us received that now have ballooned into these giant economic stimulus checks being written to banks and corporations.
On the other hand, my tired old brain can't wrap itself around this and I don't know what to do either --- other than limit my spending to the money I do have for what I do need and can afford, then keep my head down.
This is why I keep screaming for the banks to sell the foreclosed properties, re-finance them and get the banking system loaning again. We could have another interest rate drop tomorrow but who cares no one can get a loan.
The next problem after Obama is in will be how the banks finally open up to loaning money again. This could cause inflation but I'm not sure we couldn't handle that better than a down right depression. As for all that money we're printing up right now, I haven't got the damnest idea where it's going, except into bank vaults??
Mike D
& Ziggy the (non-farting) Office Kat no methane tax for him!
My reading lately has indicated that banks and people are hording money that the government is printing. Once that money starts coming out into circulation, WATCH OUT.
I can't do the math on a hand calculator too many numbers but think about this 2.5 million homes in foreclosure today, median average cost per home is $155,000 (per FDIC website) now 3 million mortgages(per 60 Minutes 12/14/2008) are set to "reset upwards" in 2009. This will put 5.5 MILLION homes valued at 0 yep ZERO by the major banks. So if my bank is holding on to say 500 homes with a value of zero what would the Bank of Sarpy Sam lend me using those homes as my colaterial[sp]. Multiply that by all the banks in the US. It's no wonder they don't trust each other, they will never trust normal people.
So my fix for the problem appraise the homes in foreclosure, either refinance them to the present owners or sell them off to someone who can pass a credit check and can put down 20% and start building good equity in the banks again. Then bank to bank lending will begin, houses will sell and the banks can lend to business AND the auto dealers/buyers again.
A bailout isn't needed if people can/will buy cars and dealers can get the financing to sell 'em.
This is complex and my business classes were several years ago but truely this is a global horror story. If you voted for or against Obama I feel sorry for him, this crisis will keep his administration nibbling at the edges but impossible to take on any major projects. My bet is that his hair will be totally grey is 4 years and he'll look like he's 102 by 2012. $20 bucks per bet any takers?
Mike D & Ziggy the non-farting Office Kat (not subject to the methane tax).