If Obama bails out California will hyperinflation be certain?

hyperinflation only occurs if massive amounts of new money are printed

Who knows? All the band aids that are being proposed and applied are experimental. No one has had an economic picture like this to follow. It’s worse than putting together a 500,000 piece puzzle with no idea what the finished product is supposed to look like.

I love Peter Schiff.

Arnold ought to do a couple of movies and use the money earned to bail out the state.

@YARNLADY It has happened many times before in the past. They think it is new because they have no knowledge of economic history.

@walterallenhaxton In the ancient past you mean, or in US past? I’d be curious to know more about when this type of economy has happened in pre-industrial US.

There never was a preindustrial USA unless you are talking about the Indians. I don’t know how they handled the money problem. They had fiat money during the revolutionary war and I am certain that you have heard the saying worthless as a Continental. Also in the early 1800’s they had another inflation that wrecked the paper. The French went broke and decided to fix the problem by printing currency. Many died during those 4 years including merchants who refused to sell their products for nothing. They were both looted and hung by the authorities for disobeying the price fixing laws.
There were many other cases of state chartered banks printing too many notes in the USA and causing bank panics. There have also been cases of states declaring their debts void and refusing to pay them. I expect that to come up eventually.

I agree with Paul Krugman, liberal economist/writer/economics Nobel prize winner in this article

@YARNLADY He is not an economist. He is a writer on economics and a political hack.

@walterallenhaxton he IS a professor of economics at Princeton.
Krugman earned his B.A. in economics from Yale University in 1974 and his Ph.D. from the Massachusetts Institute of Technology (MIT) in 1977. From 1982 to 1983, he spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers. He taught at Yale University, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining Princeton University in 2000 as professor of economics and international affairs. He is also currently a centenary professor at the London School of Economics, and a member of the Group of Thirty international economic body as well as the Council on Foreign Relations.

sounds like an economist to me.

@walterallenhaxton Maybe you have been reading too much “Huffington”. This man is an expert in his field in every meaning of the word.

@ragingloli What a waste. He still does not have have a clue as to the economic value of saving. There are other big gaps in his knowledge too. Those are not very respected schools in economics anyway.

@YARNLADY He certainly is an expert in telling politicians what they want to hear and profiting from it while the rest of us go straight to poverty because of what they do following his advice. But after all that is his business. I quite agree with you. He is expert at it.

@walterallenhaxton Now I’m really curious. Not respected schools? So what would you name as respected schools in economics? Also – I think a Nobel Prize is about as expert as you can get in any field.

@walterallenhaxton saving is useful to create a backup amount of money for less fortunate times, e.g. times of positive economical situations. in times of economic uncertainty, like we experience today, saving is actually contraproductive.

@YARNLADY There are noble prize winners who win the prise for of Alfred Nobel 2008
“for his analysis of trade patterns and location of economic activity” Krugman and those who win it for something meaningful for peoples understanding of how the world works.

“for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena” Friedrich August von Hayek
http://en.wikipedia.org/wiki/Friedrich_Hayek

There is a fundamental difference between the two of them K got his for analyzing statistics and H got his for thinking and producing a new understanding of society.

@walterallenhaxton
“for his analysis of trade patterns and location of economic activity” sounds pretty meaningful and useful to me.

@ragingloli Any librarian can do that. It might be useful if you are looking to invest in a factory and wanted to know where to put it. Certainly valuable and nothing world class about it. I bet there are tens of thousands of research departments in companies around the world with people doing exactly the same job.

@walterallenhaxton I have to question your understanding of the situation, if you believe that.

Back to what schools would you name as being better respected than the schools that Dr Krugman has attended or worked?

@walterallenhaxton I seriously doubt that. Analysis is not just finding out what happens, but most importantly, why it happens. In a subject as complex as economics, this is not possible without extensive knowledge and expertise, something a librarian doesn’t have.

also here is a quote from the actual prize commitee:
“By having integrated economies of scale into explicit general equilibrium models, Paul Krugman has deepened our understanding of the determinants of trade and the location of economic activity.”

http://nobelprize.org/nobel_prizes/economics/laureates/2008/ecoadv08.pdf

@ragingloli Give me an example of his reasoning which improves my understanding. Models don’t work in economics because all of the players affect the market so you would need a model that included every player. ( Marginal players determine prices ) Then you will have to solve the problem of the players not knowing the details of how they will act until the actual transaction takes place.
Models work by limiting complexity. So they have limited utility. He is probably using one on the cap and trade deal. He does not know the numbers to put into it so he is saying that they are low for political reasons. What ever predictions he makes are certain to be wrong. You can’t limit one part of the economies ability to produce and get accurate information on the whole one with a model. Reason will tell you that where the economy is limited is where businesses will have to move away from. Depending on which businesses move and at what time they do move It can be most destructive of the local economy.