hom36rown
Well-Known Member
True, but there is a counteracting force. As the dollar goes down, our products become more competitive internationally. I worked for a company once whose main competitor was Sweden. As the dollar dropped relative to the Euro, the company I worked for received more international business and the Swedish company received less. So eventually the world will level out some. Granted, that does mean we won't make ten times the wage of your average Asian, but it does mean we're not entirely screwed.
This may be true, but it doesnt change the fact that we face a painful readjustment. We have to start exporting more than we import, and that means drastic change. That means living painfully below our current standard of living. Not only will we not be making 10x that of an asian employee, we will be making less. China has a trade surplus, they have real wealth...the collapse of the dollar will cause a studder step in their economy, but in the end they will be better off.
Do you have any way of explaining this prediction? This crisis shrank the money supply, by lowering the value of people's savings accounts. Could you do me a favor and read the three articles I posted above?
Do I have an eplanation...how about the trillions of dollars that has been created? And there is a lot more to come. Like your article explained, we pay our IOUs with IOUs, but like I explained earlier, now that our trading partners realize that this cannot go on forever, especially Now that the naive idea that our economy is too big too fail has been shattered with the failure of so many major banks, they will no longer invest in our t-bonds(this also will cause a huge devaluation in the dollar) and we will be forced to actually pay our debt (actually having to pay our debt, wow now thats a crazy thought). And from the way the government has responded so far, I think they are going to further look to the printing press to pay their debts...a lot like the weimar republic. So the money supply is effectively increased, the value of the dollar drops, people are further robbed of their savings, prices skyrocket causing the markets to stagnate and voila you have stagflation. Also, what do you mean the crisis shrank the money supply by lowering the value of people savings account?
Yes but creating trillions of dollars over short periods of time is not going to keep inflation low and managable. Less foreign credit will also cause a signicant drop in the dollar.You seem to be operating under the assumption that it's a zero-sum game. It's not. Generating money does cause inflation, but if that inflation is low and manageable, it won't cause major problems.
It's not a bug, it's a feature! Seriously though, it enables businesses to get easier credit which stimulates the economy.
And that is exactly how you get fake fuckin bubble economies like the US'. Think about it, what got us into the housing crisis in the first place...easy credit! Easy credit has been what has been giving us the illusion of real wealth, but it is the problem. Americas economy is just one big bubble based on easy credit. Easy credit made the housing market seem like it was booming, but really it was an illusion...just like easy credit has made it seem for decades now that our economy is booming, when in reality our economy doesnt produce much of real value.