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Strategies & Market Trends : The coming US dollar crisis
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To: Don Earl who wrote (14681)11/19/2008 4:42:43 AM
From: Real Man  Read Replies (1) of 71456
 
A lot of bearish folks including Fleck praise Volcker for
fixing the US economy through
shock therapy, raising rates through the roof, but yes, things
are different now. During a currency crisis induced by a
collapse of sovereign debt financed by foreigners a country has
no choice but raise rates through the roof during economic
depression to avoid hyperinflation, which is why these kind
of crises are so ugly.

This is usually needed as stable currency restores the
country's manufacturing base, and that eventually leads to
recovery. We are not there yet. A complete loss of confidence
in US currency will be devastating and much worse than the
Great Depression. However, hyperinflation is even worse
than a run on the currency. It's a persistent run on the
currency.
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