Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Snowshoe who wrote (71427)	12/5/2009 11:20:02 PM
From: Maurice Winn	1 Recommendation Read Replies (1) of 74559

Borrowing cheap money to buy a speculative bubble is risky, as millions of people have learned to their dismay. <They're borrowing cheap money and using it to hoard garlic. China needs to quit printing cheap money > When the money becomes expensive again, with 20% interest rates, the cost of holding the hoard could get really ugly really fast and especially when the price is dropping fast as hordes try to sell their hoards at the same time and buyers wait until prices look as though they have stopped dropping. But why should China stop printing yuan? It's great fun to have a money machine. When a fiat currency is on the way up, it's great fun for the owners of the printing presses, who get rich. On the way down the other side, it's hideous for those left holding the bag, who are those foolish enough to accept the promissory notes in exchange for real things. The yuan is on the way up. They can keep printing for years. Mqurice

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