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G Sharp · 03-21-2003, 03:31 PM

Good post, Flash Freak. It makes some sense. Another element that the article left out which is key is the notion of signorage... this is a 2 to 3% discount off inflation when a currency is used OUTSIDE of the country that issues it. Since the USD is the currency of choice for oil [although Euro is gaining], other countries use the USD as the currency for savings or as a more stable replacement for the local currency. All over the world, many countries buy and save dollars cuz they trust it more than their local currency. This has a minimizing effect on AMERICAN INFLATION since not all the cash printed is NOT circulating here or in active exchange but being saved up overseas. This signorage effect will be greatly reduced and cause inflation and economic turbulence in the US if overseas people cleared out their stores of USDs and replaced it with Euros.

03-21-2003, 03:31 PM
G Sharp So Fucking Banned Join Date: May 2002 Posts: 1,343	Good post, Flash Freak. It makes some sense. Another element that the article left out which is key is the notion of signorage... this is a 2 to 3% discount off inflation when a currency is used OUTSIDE of the country that issues it. Since the USD is the currency of choice for oil [although Euro is gaining], other countries use the USD as the currency for savings or as a more stable replacement for the local currency. All over the world, many countries buy and save dollars cuz they trust it more than their local currency. This has a minimizing effect on AMERICAN INFLATION since not all the cash printed is NOT circulating here or in active exchange but being saved up overseas. This signorage effect will be greatly reduced and cause inflation and economic turbulence in the US if overseas people cleared out their stores of USDs and replaced it with Euros.