Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: russwinter who wrote (31528)	6/6/2005 10:41:52 AM
From: mishedlo	Read Replies (1) of 116555

Since we are discussing the present and near future, one measure of the value of the US$ is whatever it will currently buy or in the near future what it will buy. Then again, since the US$ is backed by nothing as is the YEN, the pound, and the RMB etc etc etc they are all eventually worthless. What happens between now and eventually is what I have been talking about. One measure since everyone thinks housing is a huge sign of inflation, is how much house dollars will buy say 3 years from now. I contend that a dollar will buy more house 2 years from now, three years from now, and quite possibly 6 years from now. I do not know if dollars will buy more steak or chicken or oil two years from now or not, and no one else does either. I would suspect the US$ will hold its own against the pound in that timeframe but regardless, the pound is no more a store of value than the US$ is. In the end as long as unbacked US$ are accepted to buy goods in the US (which will likely be a long time), the only measure of value that makes any sense is what it will buy. Housing is the biggest expense and I expect it will buy more house in the future than now. Mish

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