One of two things is going to have to happen to our economy, either deflation, or hyper-inflation. Right now we're in deflationary mode with the housing death spiral, but odds are pretty good that Helicopter Ben will try to inflate our way out of this mess. Remember, our total debt including treasuries is over $50 trillion. Our economy is barely a fourth of that.
To make up the difference, we're going to be forced to hyper-inflate the dollar all to hell as Hong Kong's Puru Saxena explains.
Saxena's not kidding. No democracy ever defaulted, they always inflated out of the mess. The value of the dollar is going to disintegrate and our standard of living will go along with it. We will have to pay China, Japan, and the Gulf oil states back the trillions we owe them or default. They will not be able to afford our debt much longer. When they come calling, our time is up.
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