We are seeing Deflation and it is fugly.

Discussion in 'Economy' started by Neubarth, Oct 19, 2010.

  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    No rise in Social Security benefits for two years now. Some commodities are going up in price, but that always happens due to supply and demand.

    The question to ask yourself is WHO IS GOING TO TRY TO MOVE THE DOLLAR DOWN IN VALUE. Remember what I have posted before about the insanity of economists. I have never met any two who agreed with each other. Yet, they will tell you that economics is a science. Ha! Taint nuttin scientific about it!

    Remember, the dollar is not on the gold standard for the simple reason that the US government spending is greater than all of the gold reserves in the world. You can not use gold as a standard when it can not meet demand.

    The dollar like all the major currencies in the world is based in value upon the productivity of the country that it originated from. Our manufacturing is twice that of China. Our production of farm product and other resources dwarfs the other countries of the world.

    In fact all of the other leading economies of the world are totally dependent upon sales of their product to the United States to ensure their profitability. They can not afford for the dollar to go down in value. I have been pointing this out to people for years, but they just do not understand. THE OTHER MAJOR COUNTRIES DO NOT WANT TO SEE THE DOLLAR FALL IN VALUE AS THE ENSUING DECREASE IN SALES WOULD DESTROY THEIR ECONOMIES. If you start doing that, the entire global economy will slow down and continue to slow down with the decrease in the American buying capacity.

    The potential for American Dollar deflation is very real. I can not promise that it will continue, because nobody can predict the political movements in other lands. All I know for certain is the past performance of the countries of the world. Collectively in the past they prop up the dollar. I expect that they will continue. Right now it looks like they can not afford not to.
     
  2. Norman
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    Norman Gold Member

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    I think exactly the opposite.

    Inflation.

    And that US is not really the manufacturer you make it out to be.

    For farm produce US is just a bit on the surplus side, almost everything else (save services) is a trade deficit. If US makes so much food and stuff how come are there no exports? Fat americans :lol:?

    No country is so reliant on exports that they export and get nothing back. Only reason to export is to import. Dollar is overvalued, same way the housing market was (it's a bubble). We will see what happens.
     
    Last edited: Oct 19, 2010

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