US is bankrupt – Puru Saxena

Oh my!! Someone’s running around saying the US is bankrupt.

OK – Puru is an inflationist. To be exact he’s a hyper-inflationist. But it’s still a good video and a, generally, good argument. I, however, am in the deflationist camp. In essence, governments can print all the money they want but they cannot force institutions to lend or entities to borrow.

Also, in a situation whereby most entities, be they corporations or individuals, are already having trouble servicing debt, giving them money (the now famous helicopter drops) will not guarantee that this handout will be spent in the economy. Most entities will use the money to pay down debt thereby depressing the velocity of money thus guaranteeing deflation.

http://www.cnbc.com/id/15840232?video=1065391533&play=1

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