What do you think the chances are for inflation
When I see the congresss passing stimulas plans or what ever name seems to fit, and other countries doing the same
How much deficit spending can we tolerate. I would say a lot, so long as int stays low
Now here in Canada we have had a looney worth much less than the USD
We are sort of like SA in that our currency allows us to make a profit, growing corn and beans. The trick is to sell more dollars than you spend
What I am constantly reminding the family is our experience with 22% int
Keep the debt low and if you do have debt, look for the flexibility to refi at fixed rates
Some short term variable is okay as one has to think low int will be with us for some time
But what about a 25 yr ammortized farm land purchase
Today, the USA banks will likely be the banker to the world
A crisis of confidence is hard to see at this time, as all other banks are also in the game of printing of fiat
The warning signal I look for is when wages fail to keep up to rising prices
If posssible, keep the option open to go to fixed rate
Nothing says we will have low int rates for the next 10-25 yrs
I don't know what russia and china could do, to foster a loss of confidence in the USD, if they floated a gold backed currency
The thing that I think about is this
Does china really want a loss of confidence in the USD
Would that not make their exports more expensive and un-competative
I think the USA will ramp up some domestic manufacturing, so maybe china doesn't care to sell as much to the USA if they can destroy the USD
Maybe china is putting their future in the silk road with markets from china to the English Channel
A gold backed currency is some thing most people have forgotten and have no experience with such a concept