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Old 11-16-2007, 01:35 PM
Zygote Zygote is offline
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Join Date: Jan 2005
Posts: 2,051
Default Re: borodog\'s mistaken understanding of M3...don\'t listen to his drive

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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.


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The statement was regarding fed intervenion, not free market trading. When the fed intervenes and issues reserves out of air, this has a negative impact on the value of the dollar.

Same is true for fed monetizing the debt.

When fed prints money, without backing, dollar goes down just like if any other counterfitter prints money.

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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).



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I support making things clearer [img]/images/graemlins/smile.gif[/img]