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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: long-gone who wrote (6416)6/15/1999 1:10:00 PM
From: Hawkmoon  Read Replies (4) of 81957
 
Richard,

Have you read Krugman's "The Return of Depression Economics"??

Very insightful and compact reading and written in layman's term even you should be able to understand.

He especially rails against economic austerity measures in stricken economies. Those policies are flawed attempts to "preserve" the concept of "hard currency" through drastic hikes in interest rates and cutting deficits.

Trying to preserve the sanctity of a hard currency in the face of declining investor confidence is a losing battle and results in a slow economic death by a thousands cuts.

Better to get any devaluation over with in one fell swoop so that investors can say.. "gee.. that was bad and I lost money, but it looks like there is nowhere to go but up from here so I'll take another chance and average down".

His logic is extremely compelling. I suggest you pick up a copy at your local bookstore.

Economics is all about psychology, both consumer and investor confidence.

Regards,

Ron
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