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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (1654)	5/21/1999 4:11:00 PM
From: Sam	Read Replies (1) \| Respond to of 3536

Wayne, <<What about the scenario where one country is trying to run a "very" loose monetary policy (like Japan) and that causes money and savings to flow to other countries (like the U.S.) where money is just "less" loose?>> Why would that be a winning long term strategy? It seems to me that any country following that policy as a norm would just end up with hyperinflation and would effectively bankrupt their citizens (except for those who keep their money in other currencies). It is only a policy which can work for short periods of time, and will always have costs, no matter what. In Japan's case, the costs have already appeared (they were too restrictive for too long); they are trying to correct that. It remains to be seen if they will be successful, since they are also paying for other sins of hybris as well. The problem with gold seems to me that it is arbitrary and inflexible. That is also its appeal. But if we really do maintain freely traded currencies, I agree with Henry--gold is and should be dead.