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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (5515)	4/24/1999 10:09:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 81821

and probably will start moving their money back home.. don't you find it a bit scarey? Certainly I find it scary. But I find the possibility of a renewed capital flight from the periphery of the global economy to the US far more plausible until after Jan 1st, 2000. I'm sure that those nations ONLY NOW becoming aware of their IT sytstem's vulnerabilities to Y2K are more frightened than we are. And the Asian nations are apparently the worst off in this regard. Also, Europe is facing SERIOUS restructuring challenges of their own as their socialized society find it difficult to compete with US productivity gains. You worry about wage inflation, but think about how much more difficult it is for socialized nations to deal with their extreme social entitlement programs. So until we see families able to sustain themselves comfortably on one salary, I think wage inflation is an economic red herring. (But I could be wrong on that, of course). Inflation has been defined as too many dollars chasing too few goods. What we currently have is too many goods chasing too few dollars. Until that issue is resolved in one form or another, inflation seems to be effectively dead. And since inflation is the only thing that causes currency to diminish in perceived value(minus a breakdown in society by whatever cause), and the only competition a global reserve currency has is gold, that shiny metal will be hard put to justify a place for itself until the whole world is sparking on all cylinders again and stressing the available supply of commodities, thus resulting in price increases and diminished purchasing power for currencies. Now think about this scenario. Many nations in Latin America have been toying with the idea of converting to a dollar based financial system. So for them to manage this, they have to have a substantial supply of dollars available to back their economies. What the ultimate impact of seeing more and more of the world's money "dollarized" is something that I'm still struggling with. But suffice it to say dollarization should result in increased demand for greenbacks. Regards, Ron