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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Cogito Ergo Sum who wrote (77446)	8/8/2011 4:43:14 PM
From: elmatador	1 Recommendation Respond to of 218645

The tight money policy initiated by the FED in the early 1980s drove interest rates on three-month Treasury bills to over 14%. At the same time, the inflation rate began to fall. The result was a kind of international suction machine that drew unprecedented quantities of foreign funds unto U.S. Treasury and other bonds and investments to take advantage of the irresistible combination of high interest rates, falling inflation, and political security. The result of this vast capital inflow was to prevent what would otherwise have been a self-correcting tendency in the foreign-exchange markets. The poor showing of American exports and the success of foreign imports should have resulted in a steady pressure against the dollar. This would have lowered the price of the dollar in marks and yen and other foreign currencies, thereby cheapening our exports abroad and making foreign goods more expensive at home. After a time we would have expected our exports to pick up and our imports to subside, until the one-sided balance ion current account evened out, or at least showed a considerable improvement. The suction machine prevented that. Instead of falling, the dollar rose-and rose to such heights that the balance on current account worsened to the point at which our international economic position was no longer sustainable. Robert L. Helbroner and Lester Thurow . As always said. Blame P. Volcker to have started the fleecing. Now the damage is done beyond repair. Close the FED.