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249 comments on DrumBeat: May 2, 2007

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Bruce Scott on May 2, 2007 - 1:12pm Permalink | Subthread | Parent | Comments top

Gail, in your monetary collapse models, do you have a scenario in which the US Dollar undergoes such a collapse due to fundamentals (exposed as it ceases to be a reserve currency), but the Euro and the Yen survive?

ciao,
Bruce

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Gail the Actuary on May 2, 2007 - 10:55pm Permalink | Subthread | Parent | Comments top

Bruce,

That's a good question. It seems like the collapse of one major currency would tend to bring the others along, because of the interconnectedness of the economies. At best, there might be hyperinflation in the US, and a lesser (but still significant) impact on the Euro and Yen.

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Dezakin on May 3, 2007 - 4:00pm Permalink | Subthread | Parent | Comments top

Thats not how hyperinflaction happens though. That happens when you use the central bank to print money instead of using taxes.

You can have a sudden currency correction where it loses say 50% of its value (certainly extremely painful) if say a country dumps all of its foreign currency holdings, but absent flooding of the money supply hyperinflation doesnt occur.

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249 comments on DrumBeat: May 2, 2007

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