GoFuckYourself.com - Adult Webmaster Forum - View Single Post - ECONOMICS PRIMER for everyone asking about the US DOLLAR

frippeno · 12-31-2003, 06:42 AM

I agree with ya sorta, except....

Growth in money supply is usually accompanied by inflation, which is what really does the damage.

Yet inflation has remained relatitively low.

I claim there is a different factor at work here. The dollar is falling because the world is becoming less and less interested in holding dollars. Why? Because the huge deficit spending and other irresponsible policies that have been pursued lately make inflation almost a certainty in the future.

Countries who rack up debt that they can never really pay back have a history of inflating their currency, it is an easy way to pay back $.80 on the dollar. The investment world out there now sees that as a real possibility for the US.

Also, there is the issue of which currency, the dollar or the Euro, will be used in major world commercial transactions, such as for oil. The dollar had a virtual lock on that role, but that lock is looking shakier by the month.

12-31-2003, 06:42 AM
frippeno Confirmed User Join Date: Oct 2002 Location: Addison, TX Posts: 133	I agree with ya sorta, except.... Growth in money supply is usually accompanied by inflation, which is what really does the damage. Yet inflation has remained relatitively low. I claim there is a different factor at work here. The dollar is falling because the world is becoming less and less interested in holding dollars. Why? Because the huge deficit spending and other irresponsible policies that have been pursued lately make inflation almost a certainty in the future. Countries who rack up debt that they can never really pay back have a history of inflating their currency, it is an easy way to pay back $.80 on the dollar. The investment world out there now sees that as a real possibility for the US. Also, there is the issue of which currency, the dollar or the Euro, will be used in major world commercial transactions, such as for oil. The dollar had a virtual lock on that role, but that lock is looking shakier by the month. __________________ it only took one brick to make that window drop Last edited by frippeno; 12-31-2003 at 06:47 AM..