| Talkback | |
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Title: | For Anton # 4 | |||
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| Name: | Clickfool | | |||
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| City: | Sussex | State: | England | | |
| Americans are colossally in debt to the world. Setting past prodigality to one side for a moment, the critical problem is that even now, month by month, they are still importing vastly more than they are exporting. The US Treasury is funding this by issuing great rafts of promissory notes, all denominated in dollars. Though the dollar is in steep decline, they have to persuade the world to squirrel away this GUARANTEED-TO-BE-A-POOR-INVESTMENT paper. If the world should decide that it no longer wishes to take this funny money, America is in TERRIBLE trouble, for how else can it pay for the goods? The only answer would be to hike the interest rate on its promissory notes until it covers the dollar depreciation risk. This would have an enormous impact on the real economy, causing a major slump. It is a catastrophic slump that will correct the vast excesses of the past, but at a terrible cost to the people, not only of America but the world. It won`t be a smooth, painless landing |
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