2010 US Inflation Report

The group www.inflation.us just released their 2010 US Inflation Report. These are the statements I found most interesting:

If the U.S. reaches a point where nearly 1/4 of projected tax receipts go towards just paying the interest on our na­tional debt, it will be a danger zone that it must do every­thing possible to reverse from. The White House budget is projecting an interest rate on its marketable debt in 2014 of only 4%, but history tells us that artificially high interest rates will eventually be needed to counteract the damage being done today with artificially low rates. By 2014, an outbreak of inflation could cause interest rates on our debt to reach 10%, which based on our likely marketable debt at the time of about $15 trillion, would equal interest pay­ments of $1.5 trillion or 43% of projected 2014 tax receipts of $3.455 trillion.

If the free market was allowed to function, it would persuade Americans into having a savings rate of 10% or higher. The Federal Reserve’s manipulation of interest rates to artificially low levels is preventing Americans from increasing their rate of savings to a healthy level.

NIA considers it to be hideous that CNBC and other mainstream media outlets continue to invite on and give credibility to people like Dave Ramsey. Ramsey calls pre­cious metals, “dumb”, “speculative”, “volatile”, and one of the “weirdest” investments. ... Unfortunately, the majority of Americans don’t think for themselves. They get suckered into believing the financial advice of Ramsey and others who spew the same nonsense.

Eventually the U.S. government will realize that you can’t solve problems that were created by too much debt, but getting deeper into debt at a much faster rate than before. When you have an artificial boom, there needs to be a recession. By trying to avoid a necessary recession by in­creasing government spending through borrowing and print­ing money, the U.S. government is only creating a currency crisis that will lead to the destruction of the U.S. dollar.