The Next GFC?

[onlinebiker]

Negative interest rates will solve this problem

AKA, printing more money, There's a downside to that, but it might work in the short-term.

Might as well take a pen and add a zero to all printed currency.

I.e. 1 becomes 10, 5 becomes 50, 10 becomes 100.

When that quits working add a second zero, a third a fourth ect.

It works out to the same thing.

[I_am_not_mafia]

AKA, printing more money, There's a downside to that, but it might work in the short-term.

Might as well take a pen and add a zero to all printed currency.

I.e. 1 becomes 10, 5 becomes 50, 10 becomes 100.

When that quits working add a second zero, a third a fourth ect.

It works out to the same thing.

Ordinarily yes, but you also need to take into account deflationary pressure from people paying off loans. This effectively destroys money in the system.

Money is created when people take out a loan. Money is destroyed when people pay a loan off. This is because debts need to be repaid back with interest and the money for the interest is created from future earnings. There is literally never enough money to pay off all the debt in existence. This is also why a certain percentage of the population will always fail in life. It's built into the system that they will.

Sometimes deflationary spirals occur. During deflation, money increases in value. But your debts also get larger. Deflationary spirals happen when more people are in debt than those who have savings because debt always increases faster than the money supply. So what happens is because debts become harder to service, people either default or start paying them off as soon as they can. This deepens the deflationary spiral which then makes the situation even worse. It's at this point that central banks start printing money to offset the deflationary pressure. Central banks have very few mechanisms to stop a deflationary spiral, which is why a continued economic growth of 2% is aimed for, to allow room for error.

The difficulty then is recognising when to stop printing money because the deflationary pressure has eased and to wean yourself off it. When economies fail, sometimes they go into a deflationary spiral followed by hyperinflation.

[Angrboda]

Our debt is out of control, and the allegedly fiscally responsible Republican party is simply making it worse. It's going to become a drag on global economy at best, a major U.S. crisis at worst.

[Minimalist]

The stock market took it up the ass today.  DOW down 800+ points.

[Minimalist]

Down another 545 points today.

How long until the Orange Turdfucker starts trying to blame Obama?

[ignoramus]

America coughed, China shit her pants and little Australia wipes off $100b off the SX this week!
It's starting...

[AFTT47]

Global Fucking Cataracts?