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From what I understand, currencies tend to reflect purchasing power parities. Something as arbitrary as the currency used in oil sales won't change US productiv
by ivankirigin 19y ago
From what I understand, currencies tend to reflect purchasing power parities. Something as arbitrary as the currency used in oil sales won't change US productivity, which is the most important component of wealth.
So I'm not too worried about this kind of thing.
I can imagine some disruption caused by reaction to this though, especially if congress tried to solve the problem.
Either way, I have a mortgage. Nothing would make me happier than to have my debt mean less which a falling dollar :-P
- jraines 19y agoWhat, do you get paid in Euros?
- ivankirigin 19y agoMy mortgage is a fixed contract, while my salary is fluid.
- sbraford 19y agoChildren playing with stacks of worthless currency, Germany 1923: http://sablog.com/wp-content/uploads/2007/08/weimar2.jpg http://sablog.com/wp-content/uploads/2007/08/weimar2.jpg I'm not saying it'll happen in the US, but anything's possible (especially to degrees, see current subprime crisis), especially with a reckless leader at the helm who doesn't understand that we need to, you know, actually pay back all this debt we're accumulating as a country one day. Great article on the subject: http://www.bitsofnews.com/content/view/5955/ http://www.bitsofnews.com/content/view/5955/
- ivankirigin 19y agoThat must be come foil to Godwin's Law, right? Talking about economic matters and bringing up Weimar :-P
- dpapathanasiou 19y agoNothing would make me happier than to have my debt mean less which a falling dollar Unless you get paid in Euros or Yen (or even Canadian dollars), that doesn't make sense.
- tocomment 19y agoPerhaps he's talking about inflation in general which would mean his income goes up but his mortgage stays fixed. Which is certainly good for him. How is inflation related to a falling dollar? I figured they were basically the same thing, but perhaps not.
- ivankirigin 19y agoYou're right, that's what I'm talking about. A dollar fall would hurt my purchasing power on imports and when I travel, but that is short term. My original point about PPP is that these exchanges adjust to match levels of wealth. There is little reason two countries with similar wealth should have different purchasing power on imports because of their currency. I don't know enough about inflation vs. currency fluctuations on comment on the differences.
- dpapathanasiou 19y agoInflation doesn't mean income goes up (unless your job contract guarantees inflationary increases), it means prices increase. So while his mortgage may be fixed, the prices of all other things will increase, while (more than likely) his income will stay flat. It's not a recipe for eliminating debt, so he shouldn't be cheering that scenario.
- ivankirigin 19y agoWhy would my income stay flat in the mid term? Yes, prices would increase, which would be bad. I'm not sure if I'd end up on top on balance.