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To: kcar
My fear - of not having a legit hard currency to flee to - is more societal. How do we bill export invoices? How does Cost Accounting value assets? When does trade have more currency risk than entrepreneurial risk? Does it break down?

That's a good point.

The US, UK, Switzerland and Japan are in for quantitative easing. The renminbi is quasi-pegged to the USD and the Chinese won't want to lose the war of competitive currency devaluations. There is enormous pressure on Western Europe to force the ECB to go along with quantitative easing. The Germans at least remember what hyperinflationary depression looks like.

What is quantitative easing? And whose currency is the renminbi?

What would global hyperinflationary depression look like?

That would be ugly.
17 posted on 04/11/2009 5:21:38 PM PDT by CottonBall
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To: CottonBall

Quantitative easing is when the central bank eases (increases) the money supply, not to reach a lower targeted interest rate - at this point it is as low as it can go - but to just to provide easing for the economy or to fight deflation in prices. It does this mainly by buying the government’s treasury and agency debts directly. So for instance, the Treasury creates notes and sells them directly to the Fed. The Fed writes a check and poof - new money is created and starts being spent by the government, payable by future tax serfs. This is purely monetary inflation. We started doing this formally in early to mid-March, the Brits started in January.

The renminbi is the yuan, the Chinese currency. The Chinese want at least 8% annual growth in GDP, so they are going to at least inflate in tandem with everyone else, because otherwise their currency would become stronger and so their exports would become pricier.


18 posted on 04/11/2009 6:55:21 PM PDT by kcar
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