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|User Info||What, You Mean It Works?; entered at 2012-06-07 06:04:50|
Registered: 2008-02-12 Southern England
By devaluing the dollar the system puts pressure on the consumer by reducing the stuff they can buy with their limited dollars. The consumer has a choice between reducing consumption or adding more value.
Those who export or do things which have an international benchmarked value (and therefore add value) will do well in nominal dollar terms (income will go up).
But to the rest -the world looks increasingly austere.
The criticism of the current method of currency destruction is that it specifically injects the debasing units into the very parts of the system that caused the problem in the first place and therefore does nothing to clear the system.
The current plan is about trying to protect people of a favoured status.
The approach both provides some of the necessary pain but maintains the disease.
Unfortunately this will lead to both more pain and an escalation of the disease- until they change course or circumstances overwhelm them.