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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Lee who wrote (3490)11/23/2002 1:59:23 PM
From: Ahda  Read Replies (2) of 3536
 
I agree in regards to targeting money supply and letting the free market set the cost of the dollars in rates.

I do not feel that deflation on a world base is quite the problem Mr Makin does. US consumption and our use of import low costs have increased growth in other nations. The seeds are there and our numbers are small compared to other nations consumer bases.

Japans problem was inflation if you compare global same product cost to Japans. That is precisely what we have had here. Japan was the most efficient producer however wage, property and currency inflation reduced her ability to compete.

If a government is wise and contains its own costs when growth is occurring you have the beginnings of healthy economy. If you limit printing currency the value of the currency will increase more so because technology has reduced the costs of production. You thereby defuse the potential deflation of goods by limiting dollars.
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