Comment: Think about this and tell me if I'm on target

(See in situ)

Think about this and tell me if I'm on target

I'm not sure that all of these numbers are right, but these are some of the numbers I've heard floated concerning the cliff.

If avoiding the cliff means 800 billion in spending cuts over ten years and the Fed is creating 85 billion per month that means that in ten months the Fed will have created the full 800 billion plus an additional 50 billion to offset inflation. Curiously enough, 50 billion is 5.8% of 850 billion (the amount created through QE/Twist over ten months) and 6.25% of 800 billion (the amount of the spending "cuts" cumulative over ten years). I think those percentages are close to current real inflation numbers. It's all about trying to maintain the status quo.

If we go over the cliff, taxes automatically increase and spending decreases. I've heard to expect an additional 2% of NET pay taken in taxes. I think in a real world scenario that the decrease in savings will be more than 2% by the time wage and consumable good prices increase in order to maintain the same profits being made now, before the cliff. Meanwhile the Fed still continues to print.

I bought 2 pair of work boots and sundry items today. The price per pair had gone up about $35 since the last pair (exact same brand and model that I got today) which was purchased about 1 1/2 years ago.