Perhaps we're looking at this from different time perspectives?!...

Perhaps we're looking at this from different time perspectives?! After reading your latest post, i now realise that you're espousing the implementation of turbo presses once the depression has set in- not before hand.
Correct. Debasing the currency would be a last resort after all other remedies have failed. The US still has a few options. Greenspan has another 3 caps in his gun with interest rates 3% above zero. They could boost the budget deficit and/or they could talk down the USD. If all these actions failed and they were still stuck in a 30s style recession they might consider the economic equivalent of the nuclear bomb: running the printing press in overdrive. Some economists have noted that this option might be more tempting for the US that other countries because of its enviable position of having its foreign debt denominated in its own currency. Of course, this would come at a high cost in credibility. By debasing the USD it would be permantly displaced by the euro as the worlds premier currency.

Your answers to all my earlier questions referred to the pain and severe financial distress Jo Public would be suffering- thus making the benifits of an increased money supply greater than the negatives i have outlined- thus the policy not being unpalatable.
Exactly.

But do you stand by the policy of turbo printing presses in say- 18 months time- when the US is in a severe recession and only a mild deflationary environment?
Technically the US pulled out of recession Q4 last year. Leading indicators are mixed with consumer sentiment deteriorating but firms expectations of hiring increasing. This weeks economist magazine says "the best best is a prolonged period of sluggish growth". I don't think the US is heading for a severe recession unless there is another terrorist attack involving a weapon of mass destruction.

Would the perceived benifits outweight the significant negatives (esp. the increased cost of key imports) on the JOURNEY TO depression?
No. The costs are too high. It would only be used if the US were stuck in an intractable long term depression.


Nickoo, you advocate cash. What type of cash? If the US economy is in a recession, Australia as a commodity exporter will be in serious trouble. What is your preferred alternative? The Euro?