The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: axial who wrote (20898)	6/21/2009 1:13:01 AM
From: GST	2 Recommendations Read Replies (1) of 71456

<If the US decides to impose Draconian measures by reducing expenditures, increasing productivity, lowering the standard of living and accelerating repayment, it can return to economic health --- in time> Draconian measures will not come from the US. Draconian measures will come from a world no longer willing to trade their goods for our debt on our terms. Their terms will be far more demanding -- especially as they now see us as in default. Their terms will be for us to pay more for less -- and that is the heart of inflation. In Zimbawe a loaf of bread is 10 billion dollars -- it is not 10 billion dollars because everybody has a nice house and two cars. It is not 10 billion dollars because they found a way to get their money 'out of the vault'. Rather, it is 10 billion because they borrowed money they cannot repay, and now no matter how much money they print, no other country is going to send goods to Zimbabwe for payment on Zimbabwe's terms. That is how you get inflation from debt -- you destroy the value of the currency via default.

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