Is this the beginning of the long awaited US$ rally? Maybe. Maybe not. It certainly bears watching.
Besides... I love calling it the "Elvis Trade"... Fat, sweaty... but still "The King" (but not for much longer).
Libertariananimal (at) gmail
Friday, December 4, 2009
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The King, Elvis, died though man, shortly after becoming becoming fat and sweaty.
oOOo:
HAHAHAHAHA!!!
I should have thought of that...
...... and to carry on the Elvis connection, Elvis lived in a fantasy world for years!
Perhaps the dollar will live for ever, flipping burgers in some hick town? ;-)
I get a couple thousand dollars every two weeks. Bank of America takes them. All the credit cards take them for payment. The utility companies take them. The Jewel (Chicago food stores) takes them. The Shell and Marathon takes them. The doctor takes them. The dentist takes them. Point out one entity that DOESN'T take them. :)
Please send me as many $ as you'd like along with an SASE and I'll send you a thank you card ;-)
Moved a 401 (k) to cash today.
Regards,
Coal Guy
sorry, bureaucrat, I take euros ;)
G:
Thanks for the shout. "Fat, high, sweaty, wearing a rhinestone studded jumpsuit, and the world is laughing at us--but still the muthaeffing king--before and since". I just hope we don't expire on the toilet.
Lenny D
BUR:
All transactions within a country are settled in that nation's currency. That does not mean that the currency remains equal to anything.
Just look at the price of a postage stamp over the past 50 years... that is the best indication of the effect of policy on our currency.
The trade deficit, as I think you've mentioned before, is predominantly oil payments to other countries. A good chunk of the rest of it is auto and truck import payments. Inside the country is indeed one thing, but apparently the people with the production/resources (China, India, the oil states, Japan, Europe, etc.), they like dollars too. :)
And I'm not thrilled with the gold bug argument that since 1913, when the Federal Reserve was established, the dollar has lost 97% of its value (kinda like what you're saying about the stamps). But with cost of living/inflation increases, yes, a candy bar doesn't cost a penny anymore like in 1913. But then again, we don't earn just $500 a year at work on average either. Slow inflation does make some sense.
With peak oil, a more realistic inflation rate for the U.S. could be 7-10%, instead of the 1-3% of late. I'm not sure if we can tolerate that for long.
Bur:
Of course inflation makes sense! OUr system depends on 2% + inflation per year, or else.
The point was for SAVERS (as opposed to INVESTORS). Those hoarding cash have been punished over the years, for better or worse. I tend not to worry about macro issues, as I am just a regular guy with a family to provide for rather than a person of political power.
The danger is POLITICAL more than anything. If the US$ continues its decline it is lights out for the US economy, not that I think any power can stop it, though for the next couple of years I am in the deflationists camp (and I have been WRONG) which means that cash/currency should be attractive. In other words I bet the reflation trade runs out of steam here.
Of course, I do not stand on ceremony. If the data changes, or the market goes against me, I will change my mind on a dime. For me this is NOT academic.
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