Quote from: tee-rex on July 04, 2014, 05:32:57 PM

Quote from: boumalo on July 04, 2014, 04:30:50 PM

tee-rex : savings are good, consuming on credit is bad

What about savings versus direct consumption? Which one is better? You won't get away with this question so easily.

Correct but you cannot have a healthy economy with increasing salaries (in real terms!) and increasing standard of living if you consume on credit but your industry is stable or decreasing, your taxes are going up, your trade&public deficit are going up, your unfunded liabilities is going up, the number of employed people compared to the total of the population is going down and the quality of the jobs is going way down (look at the last jobs reports : mostly part time jobs and full time jobs are destroyed at an alarming rate!)

Quote from: CoinsCoinsEverywhere on July 05, 2014, 04:49:31 AM

Quote from: boumalo on July 04, 2014, 04:30:50 PM

Prices going down were the only good thing in the Great D, do you think prices going up would have been better for people having very limited ressources?

People have less money in depression times so it is good that prices are lower not higher

Sure it's beneficial for consumers for prices to be lower when they go to the store and buy things, but the lower prices don't make up for the lack of consumption due to the hard economic times. Aggregate consumption falls, even though prices are lower.

Quote from: boumalo on July 04, 2014, 04:30:50 PM

China will fair well after the USD collapsed and the dust has settled

I guess it depends on how far in the future you look. They would almost certainly recover better and faster than the US, but a USD collapse would greatly hurt their economy. It would destroy a lot of US demand for their exports, and because of our close economic ties with Europe, the European financial system would also probably collapse, which would destroy their demand for Chinese exports as well. It's impossible to predict how bad it could get, but I could see a USD collapse leading to a global depression.

It is reasonable to make those assumptions; the collapse of the USD will have huge negative consequences for many but China will be able consume what they produce, the shifting will not be overnight but it will happen eventually; many other asian countries are on the right track and some European countries are strong as well
It is stupid to say the world economy cannot live without the USD, the world economy will be better off without the price to pay to have the USD as a world reserve currency and world payment currency