formal dollar devaluation??

[phillychoppin]

The author of this article on Forbes seems to think that a formal devaluation of the dollar might be on the way. I could see it as a possible outcome of the next G20 meeting (ETA: G20 info for those not in the know: http://www.g20.org/G20/ ).

It would be great for people in debt but horrible for savers.

What do you guys think?


http://www.forbes.com/finance/invest...apbox_inl.html

PC

[imperialism2024]

It's why I bought a new car in September. While I can easily pay the loan now, I bet on inflation's making it easier for me to pay it off in the future. My logic was that I could buy my car for $35,000 now instead of $35,000,000,000 in a few years, when everyone is making $20,000,000 an hour and gas costs $3,000,000 per gallon.

I wonder who's face is going to be on the $1,000,000 bills that we use in vending machines...

[phillychoppin]

It's why I bought a new car in September. While I can easily pay the loan now, I bet on inflation's making it easier for me to pay it off in the future. My logic was that I could buy my car for $35,000 now instead of $35,000,000,000 in a few years, when everyone is making $20,000,000 an hour and gas costs $3,000,000 per gallon.

I wonder who's face is going to be on the $1,000,000 bills that we use in vending machines...

Good point. Inflation (or currency devaluation) in general can be a good thing for your debt. The only problem is that many times it's accompanied by high-unemployment and often wages do not keep pace with inflation for those that do hold onto their jobs.

Scary times.

My $.02....think about gold & silver.... check out this article:

http://www.financialsense.com/fsu/ed...2008/1211.html

PC

[H.E. Pennypacker]

I'm pretty sure a devaluation is what we're trying to do by giving banks 100s of billions of dollars, cutting Fed rates to basically zero, and, of course, continually printing money.

Plus I wonder how a country like the U.S. could implement this...and this would cause problems for other currencies that are pegged to the dollar.

[phillychoppin]

I'm pretty sure a devaluation is what we're trying to do by giving banks 100s of billions of dollars, cutting Fed rates to basically zero, and, of course, continually printing money.

Plus I wonder how a country like the U.S. could implement this...and this would cause problems for other currencies that are pegged to the dollar.

Well...I agree that the trillions of dollars we're giving left and right will result in a significant inflation and consequently devalue the dollar. However, what's being proposed in the article from my first post is an orderly devaluation of all the currencies of the member nations of the G20.

Check out the article. This has been done before. To summarize, there will be no warning if they do this... one day they will simply announce that all currencies are now worth 30 (or whatever) percent less...theoretically all assets and wages will be increased by the same percentage. In short everything costs more, you get paid more, but your debt remains the same and therefore is now easier to repay....that's the theory anyway.

[Dredly]

There are way to many businesses in the US that are owned by parent companies in other countries. The Global Economy will prevent something like this from happening.