I don't know. I have no idea. I am way out of my depth with this economic stuff. But so are all the "experts" right now. Nobody really knows what's going on, or where it will all end.
But some people obviously have more credibility than others. Take this ABC interview with Steve Keen, who has been warning about dangerously high debt levels in both the USA and Oz for some time. He's talking radical solutions:
STEVE KEEN: The crazy thing is they have to somehow cause inflation; domestically-caused inflation to reduce the debt burden is about the only way out. And this is ultimately ... Bernanke himself concluded this when he was talking about Japan. So, I think he has got an ineffective weapon in his hands.Keen says the only solution is to "completely break the monetary rules, and this is what America did during the Great Depression when you had the New Deal coming along, which was really a directing of political power in America back towards workers, away from firms".
The one thing they could do - and this sounds quite heretical and in some ways it is - the one way you can actually cause inflation is by putting up the costs of firms and one of the ways that can be done is by wage inflation. But of course in a funk (phonetic) like this, wages go in the opposite direction and they actually compound the problem.
ELEANOR HALL: How likely is it do you think that he might adopt that strategy?
STEVE KEEN: Less than zero probability.
ELEANOR HALL: So Steve Keen, do you see America getting out of this problem in the near future?
STEVE KEEN: No...
Sounds good to me.