The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: re3 who wrote (3935)	2/6/2008 10:20:32 AM
From: Real Man	Read Replies (2) of 71406

I don't know. Fixing the mess requires some pain. However, if that pain is spread over time, then it becomes less drastic. My hope is: 1) gradual devaluation of the dollar against Asian and oil currencies to address current account balance. Not sure if a gradual devaluation is possible, since they are keeping the peg. Until it blows up, I guess. 2) Addressing the fallout from the credit mess through reflation without blowing new bubbles. Try to keep housing prices stable, while mopping up the mess. Press a money pedal whenever it drops, stop it whenever it gets bubbly. 3) Stay... where it is for some time, until everything is fixed WITHOUT a huge crisis, i.e., "abrupt and adverse consequences for the currency". Get it down SLOWLY - it appears what they are really after. The key is to reflate while keeping the nominal debt stable to slightly increasing. We'll see. It will take time. Honestly, I don't really want stuff to hit the fan, but there is that risk. Some pain is inevitable in the process, hopefully not something like the Great Depression.

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