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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Amark$p who wrote (100603)	8/10/2009 2:15:38 PM
From: maxncompany	Read Replies (2) \| Respond to of 116555

Not disagreeing, just wondering how does one just declare a 50% devaluation in the dollar overnight? Isn't that determined in and by the market?

To: Amark$p who wrote (100603)	8/10/2009 3:26:51 PM
From: philv	Read Replies (1) \| Respond to of 116555

The US dollar is freely traded and its value is not controlled by the FED or the government. It could however, be devalued through excessive borrowing, debt and deficit and profligate spending. Or maybe not! <g>

To: Amark$p who wrote (100603)	8/10/2009 7:22:37 PM
From: mishedlo	2 Recommendations Read Replies (3) \| Respond to of 116555

Can you please explain how it could possibly work? Take into consideration 1) The US dollar floats. How does one devalue it? What are you pegging it to? 2) Could the US defend a currency peg even if they tried it? 3) Japan, Europe, China, and the UK do not want their currencies to rise. Everyone wants a weak currency to keep exports alive 4) China is printing more than the US on a relative scale 5) What on earth makes you think the US would do this even if they could? 6) Why would the US even want to do such a thing, outside of certain nut cases like Mankiw? 7) Assuming the US did this, pray tell why would it increase velocity? I think it would crash it as import prices would immediately rise beyond what people could pay. Mish