which is stupid

arrogant=stupid , but one may note that US stopped publishing M3 data hardly because they wanted to pump some money from “China?s Swiming Pool”

Cheers

Panarin is a somewhat mysterious person (former GRU expert), while Khazin is professional economist and, I guess, is more interesting to follow

Very nice video

Cheers,
Dmitry.

I mean, they are not stupid of just pumping by just printing money like Weimar Republic and Zimbabwe nowadays, right?

Let me be arrogant for a moment and say: “Yes, they are”. There is an important difference though between Weimar Rep. and US – dollar is the world reserve currency.

I know this mantra but I don’t quite believe in it. The reason is that, if you take a look at GDP deficit curve and its correlations with oil prices, you’ll see that GDP deficit started to take off well before oil prices dropped significantly to call it deflation (pretty trivial point, isn’t it?)

So the federal reserve is pumping money like crazy

Oh yes, and the problem, as I see it, is that they kept doing that for decades, even, say, on the peak of growing dot com bubble, when there was no smell of deflation whatsoever.

Cheers,
Dmitry.

So the federal reserve is pumping money like crazy trying to inflate the system to fight this, the problem is they are at the zero bound on the interest rates which means they no longer have as much control directly. Fortunately, the interest rate cutting efforts as well as other tools that have recently been put to use seem to be working somewhat, so the deflationary tendencies are less bleak than they were a few months ago.

So yes, eventually in a year or two they will have to be very, very careful about not inflating too much and they’ll have a tightrope problem between keeping the recovering economy growing and taming the urge to keep inflation in check.

Khazin is interesting, and I am familiar with his musings, but I actually meant Igor Panarin and his collapse of the U.S. into 6 states. See e.g.

http://www.supercollide.com/2009/01/end-of-us.html
http://online.wsj.com/article/.....38419.html

I included the supercollider blog because it’s fun that a supercollider blog reported on it, too.

I still speak and understand Russian at some basic level. I used to be very good in it, as a kid, and Tolik Morozov told me that when I visited Rutgers in 1997 for the first time, my Russian was better than my English.

Now it’s just OK but you can still join the crowds of Russian fans of the musician called L.M.:

http://www.youtube.com/watch?v=LgzhG-B4zWM

Best wishes
Lubos

Or otherwise, wouldn’t it even be better if the surplus/deficit were calculated as a proportion to the GDP?

Exactly.

the recent era will be essentially unchanged, while the World War II will generate somewhat comparable deficits to this year.

That’s what I have found, too, the only significant fluctuation is the WWII, while present crisis is nothing special. So, I think I have to doubt that Soros can make his conclusion based only on deficit data. On the other hand, inflation is really noticeable – is it good or bad? Of course, it’s bad: although one can introduce an inflation-related correction to deficit data, this correction is not introduced in reality to your salary

That’s, if deficit is going to be covered partially by you as a tax payer, one might expect certain growth of taxes. On the other hand, if deficit will be covered by printing out more cash (as it seems to be dealt with in recent years), the instability of the situation will just grow.

Anyway, I conclude that the scary thing is not budget deficit but inflation.

the Russian scholars’ seemingly crazy predictions of a U.S. collapse

Lubos, I did not know you are familiar with Khazin’s ramblings I am impressed (do you speak Russian by the way?)

Cheers,
Dmitry.

To revenge, I have followed your example and included a “print this post” button on my blog (individual posts), too.