Why is the US bound to collapse because of inflation?

[Tornado69]

I love watching Ron Paul videos about the federal reserve and I was just wondering why this system is bound to cause a collapse and won't work anymore? Is it because inflation will eventually cause the middle class to become poor and not spend $ like they used to and it will cause and economic downslide ? How will at all work ? Deep details about this would be great, thx.

[GoodCallYouWin]

Consumption / spending doesn't really lead to economic growth it's all savings (which are channeled through investment to lead to capital accumulation).

[tolbiny]

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I love watching Ron Paul videos about the federal reserve and I was just wondering why this system is bound to cause a collapse and won't work anymore? Is it because inflation will eventually cause the middle class to become poor and not spend $ like they used to and it will cause and economic downslide ? How will at all work ? Deep details about this would be great, thx.

[/ QUOTE ]

The federal gov borrows most of the money it spends and pays it back in dollars. The more it inflates the money supply the less valuable the repayments are -> the more borrowers will demand in interest -> the more the gov has to inflate the money supply. Sooner or later loaning money to the US won't be seen as a good investment opportunity.

[kimchi]

The current money system centres around debt. Economies expand with the exponentially increasing debt held by governments, businesses and individuals. This expansion of debt uses more of earth's resources which are finite. Expansion of the money supply is usually accompanied by inflation, and only economists and madmen believe exponentially increasing systems can go on for ever. If there is no debt, then there is no money. Money no longer is an asset in the modern banking system - it is someone else's liability and promise to repay a debt.

[bobman0330]

Politicians need to scare people to get great power. Ron Paul is a politician who wants great power. How's he going to scare anyone by saying that GDP growth would be a percentage point higher without the Fed?

[theseus51]

http://video.google.com/videoplay?do...24545087333822

Probably the best Ron Paul video on the collapse of the economy, based on using fiat paper currency. The host is kinda creepy, just FYI.

Cliff Notes: Historically, no country has survived for very long using paper. The federal reserve is evil. Because we are the reserve currency of the world, when we print paper money, the world treats it as gold, so we keep printing a LOT of it. Eventually the world will wake up, and we will be screwed.