Re: borodog\'s mistaken understanding of M3...don\'t listen to his drive
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"the fed devalues the dollar by printing money" it comes accross as a literal relationship.
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what is not literal about that relationship?
there is obviously more to learn if one wants a more detailed understanding of inflation but i see nothing inherently wrong with that statement. Care to shed some light?
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because if the trading partners lower interest rates by the same amount the dollar is fine.
it implies that every time the IRs are lowered, the dollar falls. this isn't a "literal" i.e. 100% relationship but those who read a statement like that might think it is.
that is all i was correcting in the initial (bfi) thread.
if two people who both understood it said it of course it is fine. i just want to make it clearer to those who don't fully understand the drivers. espeically since currency is probably one of the harder things to truly understand (i had a tough time w/ it so possibly others would too).
Barron
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