It is easy to tell scary stories about how this all might play out. But it only takes inflation far below disaster levels to keep kicking the fiscal can down the road for many decades. All developed countries have some form of welfare for old people. The US does it in a typically convoluted American way. But anybody who thinks the pending collapse of social security payments under current law will not be changed needs to think more clearly about what matters to congressmen.
I'm with Low Risk, below. Invest in productive assets and you will end up OK.
Thanks. We aren't going the way of Weimar Germany, much less postwar Hungary, but there is a surprising degree of exceptionalism in dismissing the possibility that Americans' real standard of living will suffer because of these imbalances. As I wrote, Congress can decide to act. In fact, I'd put good money on that happening. "Fiscal space" has never been a constraint in our lifetimes. It almost certainly will be in the not-too-distant future. The path of least political resistance is cheapening the currency and/or engaging in financial repression, putting a negative real return on savings, because you never have to raise taxes or cut benefits. I agree with you and "Low Risk" that productive assets will beat fixed income by a lot in that environment. That doesn't mean they'll do as well as in the last few decades, but everything's relative. Good luck.
YES! My mom says those bastards at Walmart Budapest were changing prices for gyulai kolbász every 10 minutes. I hope the assistant manager enjoyed doing hard labor in Siberia.
All fiat currencies eventually go to zero, but betting that will happen during our lifetime is a very low probability bet. Keep saving… just make sure you use those savings to invest in productive assets instead of bank deposits, lest your purchasing power evaporate.
It is easy to tell scary stories about how this all might play out. But it only takes inflation far below disaster levels to keep kicking the fiscal can down the road for many decades. All developed countries have some form of welfare for old people. The US does it in a typically convoluted American way. But anybody who thinks the pending collapse of social security payments under current law will not be changed needs to think more clearly about what matters to congressmen.
I'm with Low Risk, below. Invest in productive assets and you will end up OK.
Thanks. We aren't going the way of Weimar Germany, much less postwar Hungary, but there is a surprising degree of exceptionalism in dismissing the possibility that Americans' real standard of living will suffer because of these imbalances. As I wrote, Congress can decide to act. In fact, I'd put good money on that happening. "Fiscal space" has never been a constraint in our lifetimes. It almost certainly will be in the not-too-distant future. The path of least political resistance is cheapening the currency and/or engaging in financial repression, putting a negative real return on savings, because you never have to raise taxes or cut benefits. I agree with you and "Low Risk" that productive assets will beat fixed income by a lot in that environment. That doesn't mean they'll do as well as in the last few decades, but everything's relative. Good luck.
So you're saying that inflation is caused by corporate greed?
YES! My mom says those bastards at Walmart Budapest were changing prices for gyulai kolbász every 10 minutes. I hope the assistant manager enjoyed doing hard labor in Siberia.
All fiat currencies eventually go to zero, but betting that will happen during our lifetime is a very low probability bet. Keep saving… just make sure you use those savings to invest in productive assets instead of bank deposits, lest your purchasing power evaporate.