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Not in 'real' terms, eg. purchasing power. If you are
Posted on: August 5, 2025 at 14:39:21 CT
JeffB MU
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earning a few percent APR and inflation spikes up into double digits you are losing purchasing power. That is all the more true if you have to pay taxes on the "profit" you made on the interest, which of course, wasn't even keeping up with inflation.
If your bank failed you might also not be fully reimbursed by the FDIC depending upon how much you had in the bank. On top of that, during the so called "Great Recession" in '08 and following, we saw European banks giving their depositors "haircuts" regardless of government guarantees. When asked, the Treasury(?) admitted that the same could theoretically hapen in the US, though it didn't that time.
Given it's power to "print money" I doubt the US would default, but most economists readily admit that there is no way the US could pay back its debt without inflating much/most of it away.
Given the fact that other nations are moving away from the dollar as a reserve currency bit by bit, we may be closer to a catastrophic hyper inflation event than we care to admit.
Many Americans don't realize that that has already happened in the US twice in our history. Both were during wartime, as is often the case. The first was after the Revolutionary War. Our first currency, the Continental, became worthless, hence the old saying that some worthless things was "Not worth a Continental.". The second time was after the Civil War, when the Confederate Dollar became worthless.
Those wars won't be repeated, of course, but as they say, History may not repeat itself, but it rhymes. The US is on the verge of war with at least 3 countries at the moment, 4 if you count N. Korea, and we're already at 2+ trillion deficit, which is being piled atop the $36 Trillion official debt, and that is in peace time!
The bottom line is that the full faith and credit of the US government is less robust than it used to be, to put it mildly.
Edited by JeffB at 14:41:12 on 08/05/25
If your bank failed you might also not be fully reimbursed by the FDIC depending upon how much you had in the bank. On top of that, during the so called "Great Recession" in '08 and following, we saw European banks giving their depositors "haircuts" regardless of government guarantees. When asked, the Treasury(?) admitted that the same could theoretically hapen in the US, though it didn't that time.
Given it's power to "print money" I doubt the US would default, but most economists readily admit that there is no way the US could pay back its debt without inflating much/most of it away.
Given the fact that other nations are moving away from the dollar as a reserve currency bit by bit, we may be closer to a catastrophic hyper inflation event than we care to admit.
Many Americans don't realize that that has already happened in the US twice in our history. Both were during wartime, as is often the case. The first was after the Revolutionary War. Our first currency, the Continental, became worthless, hence the old saying that some worthless things was "Not worth a Continental.". The second time was after the Civil War, when the Confederate Dollar became worthless.
Those wars won't be repeated, of course, but as they say, History may not repeat itself, but it rhymes. The US is on the verge of war with at least 3 countries at the moment, 4 if you count N. Korea, and we're already at 2+ trillion deficit, which is being piled atop the $36 Trillion official debt, and that is in peace time!
The bottom line is that the full faith and credit of the US government is less robust than it used to be, to put it mildly.
Edited by JeffB at 14:41:12 on 08/05/25
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Not in 'real' terms, eg. purchasing power. If you are - JeffB MU - 8/5 14:39:21