<...it is a question which fire need to be put out first.>
DJ, in this instance, Uncle Al can put out two fires at once. If you believe that the US$ is overvalued [I'm not all that convinced, but I understand the point], then by printing lots of US$, he'll soon reduce the value of the US$ in relation to currencies which aren't printed at a matching rate.
I suspect there is a currency printing race on and the US$, Yen etc are being printed in bulk, retaining parity and because of the economic woes, there isn't any inflation. Yet.
That printing and interest rate cutting will make people swap money for other investment assets and will cause people to borrow money to fund things they would like to have done, but were too expensive if don't on borrowed money.
So, there will be an economic stimulus to production and spending while whacking away at the value of the US$. Two fires for the price of one.
The stability of the US$ needs to be related to global production because the US$ is used for a lot more than US transactions. When I look at CDMA phones and the 1990 analogue phones, I think we are doing better than single digit productivity improvement. In most spheres, productivity continues to improve dramatically = producing more $$ value with less cost. Because competition whacks away, unrelentingly, the productivity improvements tend to disappear into thin air and end up as quality of life improvements rather than actual extra dollar values on any bottom line.
I have CDMA cellphones and can save myself a lot of annoyance by being able to chat to somebody. So it improves my productivity, but that just means a better lifestyle for me, because I don't have a bottom line. Ideally, we don't need much money at all and just get all the stuff we want for 1c or two. We aren't there yet, by a long shot, but we have gone in that direction.
What real estate bubble? That can be fixed with low interest rates and lots of printing to avoid a collapse. Which will also help reduce the value of the US$ [if that's what you want].
The way out of the bind is for Uncle Green$pan to do what he did and for everyone to get back to work, nursing a huge Y2K post-party economic headache. The party's over folks. Stop consuming luxury fun stuff, start producing essential goods. Stop buying Dom Perignon and first class air travel. Start buying CDMA cyberspace devices.
I was pointing out how metres etc are stable, fixed units [gravitational variability notwithstanding] but money is a puffball of politics, luck, foolishness, hope, technological developments and demographics. We can compare them in that they are all units of measurement. But one is at the whim of people. So the whim needs to be restrained, as Alan Green$pan is. Turn politicians loose on it and we've have Weimar currency in no time.
Thanks for your comments. Alan Green$pan has done a great job for three decades, two centuries and two millennia.
Thinking out loud,
Mq
PS: When we have triple witching = Nikkei, Hang Seng and Dow all on 10,000, that will be the magic cusp and away we'll go on the world's biggest economic expansion, with Hu, CDMA and China showing the way. Who is Hu you might ask? Message 16584074
This is how they'll make some money: Message 16587224 See Samsung's and Korea's CDMA incomes if in doubt.
Dow 16,000 Feb 2002 [my old mantra isn't dead yet though the prospects are looking dim]. |
