From: Mike Lorrey (mlorrey@yahoo.com)
Date: Sat Jun 14 2003 - 21:29:34 MDT
--- Dehede011@aol.com wrote:
> In a message dated 6/12/2003 11:43:06 AM Central Standard Time,
> shade999@optonline.net writes: Personally I'ld rather see the dollar
> deflate terribly than
> endure MORE of my tax dollars going to patch a currently (and
> inevitably)
> downward spiraling dollar. They could start By allowing other
> currencies to be
> used for the purchase/sale of oil, and of course, by eliminating all
> the
> hard-currencies flowing out of the country for drug sales. Not that
> Any US
> politician would have the balls to do such a thing.
They could start by letting states negotiate group rates for
prescription drugs for their residents. As it is, more and more people
are ordering their prescription drugs out of the country over the
internet.
Keep in mind also, the Columbian cartels and the guerrilla groups that
have many billions of dollars in the bank seem to be dumping the dollar
as a tactic of financial combat against the backer of their enemy. This
is becoming a pig pile tactic by many countries which import more from
the US than they export and don't like our "we're not a punching bag
anymore" foreign policy.
Keep in mind that deflation is not the same thing as devaluation.
Deflation is when prices decrease (normally occurs when the value of
the dollar increases), while devaluation is when the dollar is worth
less of competetive currencies. Most of the deflationary pressure is
from falling energy prices (and prices that are impacted by energy
prices). Since energy prices were previously inflated solely due to war
jitters, this should not, IMHO, be considered a bad thing, and the
deflation is not a sign of anything systemically wrong with the
economy.
The dollar, somewhat contradictorily, is also devaluing, mostly because
many countries pissed at our foreign policy are changing how their own
currencies are anchored, from a dollar standard to a euro standard.
This also IMHO is actually a paper tiger that is more likely to help us
than hurt us. It gives the French the false prestige they crave, while
at the same time inflating the prices of their exports, which will
negatively impact their economy.
With decreased demand for dollars overseas, this makes our money cheap
internationally while at the same time paradoxically of high value
domestically. This can only be a good thing for the US, and will result
in a return of many manufacturing jobs to the US, especially skilled
blue collar jobs. Imports will decrease and exports will increase. The
trade deficit, an artifact of our currency being the lingua franca of
international finance, will fade from view and might even become a
trade surplus. I predict that within a decade the US economy will
resemble Japan of the 70s and 80's. Consumer savings will skyrocket. A
speculative bubble of a size never before seen will occur across the
entire economy, which will last as long as people are confident that
they are making rational decisions (and so long as the facts they are
basing those decisions on remain accurate).
=====
Mike Lorrey
"Live Free or Die, Death is not the Worst of Evils."
- Gen. John Stark
Blog: Sado-Mikeyism: http://mikeysoft.zblogger.com
Flight sims: http://www.x-plane.org/users/greendragon/
Pro-tech freedom discussion:
http://groups.yahoo.com/group/exi-freedom
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