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

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To: Mike Johnston who wrote (72653)12/22/2007 3:07:14 PM
From: sixty2nds  Read Replies (1) of 116555
 
The problem I have with Shiff's article - Shiff assumes "the result will be far fewer products available for Americans to consume" I've got to ask - When is the last time anybody read about production capacity being strained, let alone used up??

......"Many mistakenly believe that when the U.S. economy falls into recession, reduced domestic demand will lead to falling consumer prices. However, what is often overlooked is the fact that as the dollar loses value, the rising relative values of foreign currencies will increase consumer demand abroad. As fewer foreign-made products are imported and more domestic-made products are exported, the result will be far fewer products available for Americans to consume. So even if the domestic money supply were to contract, the supply of goods for sale would contract even faster. Shrinking supply will be a major factor in pushing consumer prices higher in America."......
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