I'd say, "both". The guvmint has been spending like crazy, and the fed is using new and novel techniques to continue greatly expanding the money supply, yet the economy is still not inflating. So, when this musical chairs spree of stupidity slows and stops, as it must, instead of the common inflation in prices we are used to, we will see deflation in prices of goods, relative to the USD. Wages lower. Jobs lost. The US economy actually contracting. Depression, probably a bad 5 years. Somewhere towards the end of that, the absurd growth of fiat currency in the world that just happened will reach out to bite us at the other end. The USD will lose (pretty much) its Reserve status, a financial fiction that has helped create this mess. When that happens, the USD will drop in value relative to all hard assets, and most other fiat currencies. Which ones, how far, that is still conjecture. But the loss of Reserve status is coming, or else our trading partners and holders of way too many USD are idiots. China, as a long term thinker in this area, is not idiotic. (Not sure at all how this devaluation will work, but the price deflation that precedes it looks ever more clear with each passing month.)
The guvmint has been spending like crazy, and the fed is using new and novel techniques to continue greatly expanding the money supply, yet the economy is still not inflating. So, when this musical chairs spree of stupidity slows and stops, as it must, instead of the common inflation in prices we are used to, we will see deflation in prices of goods, relative to the USD. Wages lower. Jobs lost. The US economy actually contracting. Depression, probably a bad 5 years.
Somewhere towards the end of that, the absurd growth of fiat currency in the world that just happened will reach out to bite us at the other end. The USD will lose (pretty much) its Reserve status, a financial fiction that has helped create this mess. When that happens, the USD will drop in value relative to all hard assets, and most other fiat currencies. Which ones, how far, that is still conjecture. But the loss of Reserve status is coming, or else our trading partners and holders of way too many USD are idiots. China, as a long term thinker in this area, is not idiotic.
(Not sure at all how this devaluation will work, but the price deflation that precedes it looks ever more clear with each passing month.)
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