"consumers crushed" & us "economy collapsed", page-10

The inevitable collapse of all fiat currencies.

It could not be more scaremongering than that.

This people are really unable to understand what a liquidity trap means, including that when you are in one orthodoxy is going out of the window.

They cannot accept neither the idea that for the private sector (households and corporations) to deleverage without causing a depression the public sector as to move in the opposite direction nor that when people want money not for transactions but as a store of value the central bank has the obligation to supply that extra money, which will end stored or parked somewhere doing nothing.

The problem is that they are not alone as the concept of liquidity trap is banned from the Austrians lexicon.
Therefore in reality it should not be surprising to hear gold bugs, notwithstanding all the evidence to the contrary, insisting that hyperinflation is here but being hidden from us by fake statistics, that interest rates should already have exploded if it was not for government constant meddling with the money supply and horror of horrors, that the end of all fiat currencies is near, very, very near.

http://krugman.blogs.nytimes.com/2012/04/01/billion-price-update-2/


http://www.interdependence.org/wp-content/uploads/2012/03/Paul-McCulley-Fellows-Paper.pdf