Reply #33: A simple example [View All]

Lets look at oil.
As US dollars decline in value oil prices will rise in US.
The increase in cost of oil will effect many services and products..
transportation, productions, services.

This increase will drive up the prices. The effect on you is the declining Purchasing Power of your salary. This means that after you pay for what you really need you have less dollars left to spend. This less dollars to spend means that it will create a slow down on income to many other business.

What Snow statement means.... The value of the US dollars is demand driven. When he say he wont defend it means leave it to other. Defending it mean going into the market and buying dollars hence creating a demand.

The likely effect of that statement will be seen as US itself admiting that the dollars is in trouble. Countries will then demand for trade in Euro Dollars. They will start signing contract in Euro Dollars and they will start trading in Euro Dollars. But given the trade deficit as it is US itself cannot correct the suituation. What you sell out create a demand for dollars what you buy wheather in US dollars or other currency has an effect but in this case it simply means you pay out more. So you have an over supply of dollars with very little demand. This call leaving it to market forces.

This country has overspend on military area. It has very little benefits economically both short and longterm. That money could have been put to greater use to help Americans as a whole.

In short US is in a very big hole so deep it cant get out of it on its own.

In simple terms the effects on the US dollars is felt by all wage earners. It has very little effects on Multi National Corporations.
I am seriously confuse by a lot of US decision on its own economy. Some of its net effects seriously errode the wealth of the Americans people both in short and longterm. But this are my opinion and based on what I read and data available to me.