If you doubt this problem is real go to a WalMart in any major city on the last day of the month around 11:00 in the evening. Hang around for an hour. Notice who's in there and who goes for the checkstand when the clock ticks over.
These folks know better than anyone, due to their superior IT technology and ability to track sales down to the UPC, along with time of the sale and who's buying, exactly what's going on. When they tell you people are so broke they can't afford a package of diapers until the "magic card" with "government cheese" turns back on at 12:01, you better listen. They're not BSing you.
I've written on this for three years, and have pointed out that debasing the dollar will not help - it will in fact destroy the middle class and below instead. We got a short reprieve from the dollar debasement occasioned by the equity collapse in 2008 and early 09, but now we're in the phase where instead of engendering support for the stock market a dollar decline will crash valuations instead.
Competitive devaluation cannot work, as we do not control the world. When we do it the rest of the world will respond by doing the same thing. All we do is tighten the vise - actual help for the population is not in the offing from these policies. "Begger Thy Neighbor" - exactly what we are attempting to do now - was a big part of why The Depression lasted 10 years, and it is also a big part of why it ended in a World War.
Nothing has changed folks. I said in 2007 that the only way out of this was to pull liquidity and force the bankrupt to take their medicine, whether we wanted to do it or not. It doesn't matter if the rich and powerful banksters "think" this is a bad idea, mathematically it is not possible to inflate out of this, nor to stabilize the economy with ZIRP and QE. All we've done is enable the federal government to temporarily paper over the insolvency of half the population (and all of the major banks) by borrowing and spending 12% of GDP, building in even more damage that now has to be corrected and ensuring that even more pain must be suffered.