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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: LLCF who wrote (28456)3/13/2005 12:54:56 PM
From: benwood  Read Replies (1) of 110194
 
DAK, my debt is only easier for me to pay back if I get my hands on more dollars, regardless of how worthless the dollar has become relative to other currencies. That only makes it easy for a foreigner to buy my house. You are assuming that a declining currency is accompanied by an equal wage inflation. It may, as in your Germany example, or it may not.

This is the exact reverse of all those years of our appreciating clownbuck -- we could travel more and more easily abroad, but that didn't help the locals at all. In reality, it generally made it worse for them because their import bills went up. We'd suffer the same fate, at least from the 1/2 the world that's unpegged, and so we'd need some wage inflation just to keep up with buying the stuff to live. There may or may not be a surplus that makes it easier to retire the old debt.
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