Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Condor who wrote (55050)	10/28/2004 6:55:41 PM
From: Elroy Jetson	Read Replies (1) of 74559

I'm pointing out why the Fed and our government have decided that driving down the value of the dollar drastically is the best solution to the problem of the US enjoying a higher standard of living than the rest of the world. Let's say you arrange to push down wages by 75%. Automatically, the value of assets will also decline by 75% leaving the banking system bankrupt. Why? Asset prices are determined by the income available to pay for them, and to pay rent on them. If incomes decline, so do asset values. Since the Fed's mission is to protect the banking system, as opposed to protecting American citizens, they think we should instead devalue the dollar by 75%. That way you can still sell your $1 million dollar home for $1 million paper dollars - even though it buys only $250k worth of goods. That way the pilot can still earn $250,0000 per year, even though it buys only what $62,500 used to. Your retirement savings or annuity will buy 75% less, but many prices will be 75% less - however, imported prices, like oil, will remain the same, that is they will cost four times as many dollars. .

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