Why so many people believs a strong currency equals a strong economy?

Discussion in 'Economics' started by crgarcia, Jan 9, 2008.

  1. The top two economies in the world (USA and Japan), have very devaluated currencies, and they remain at the top.

    For example Spain in the colonial era, had so much gold from latin america, that salaries skyrocketed.
    With such high costs nobody would produce anything. A similar thing is about to happen in Moscow and Venezuela, because of oil prices.

    Yet so many people believes a super strong currency is good for the economy...
  2. I guess so............

    The rest of the world has decided to extend credit to the biggest subprime borrowers in history...US and Japan..

    Isn't Japan debt 1.3 times their GDP?

    borrow that much cash and you can have a helluva good time for years....
  3. The money is not real as it is all borrowed. So if your neighbor has a $10m house(at 5% interest), a boat, a helicopter with its own pad on the roof, on a 200k net worth, he may APPEAR rich and wealthy, but all it takes is one sharp adverse fluctuation in the underlying prices of his holdings to not only wipe him out, but leave him bankrupt and possibly in a shelter. Your neighbor is a retard.

    His excuse is, "well, prices have been going up and up for years and years, it is extremely cheap to borrow, and my bank only pays me 3% interest". (This person is death for an economy)

    Another person lives in a place where money is very expensive(interest rates at 13%) low home prices and low inflation. He keeps all of his money in the bank and earns 10% on it. He owns his property which is the same size as your neighbor for 300K outright and owes no money. He has 20K in the bank and a hyundai, brand new.

    WHO has more wealth? Who appears to have more wealth? There is your answer. With the entire population feeding on your neighbors ideals, the other person and his neighbors buys all of your properties when in default for pennies on the dollar. Spenders currency goes down while the savers currency sky rockets. So which economy ends up NET positive? there again, your answer. p
  4. :D :D :D , when its all gone, party over? borrow more? Who cares, we will worry about it when the time gets there. For now, grab a keg and meet me at my house at ten.
  5. tyler19


    The real question is can the United states still be a leading in the economy with a devalued Fiat currency...
  6. Still be? like how? we have not led anything since 99 except for a meltdown. Yes, we did lead.
  7. i have a sense that the rest of the world still gives us a credit card since they know we'll send some Marines in if they get their collective asses in trouble

    so we prop up 90% of the world's tryrants in return for reinvested petrodollars and imported plastic crap....
  8. maxpi


    If Ms. Clinton gets in office there will be change.... overnight a weak dollar will be a good thing...
  9. There are plenty of nations across the world with near worthless currencies. Why don't you move there for a while and check out just how great their economies are.

    On the other hand, stick around in US for a while and you might experience the same.
  10. Let's not forget what a fiat currency is. Our fiat currency is a federal reserve note; a debt. If I borrow from you today and I intend on repayment of less than I borrowed tomorrow, I am more or less stealing from you.
    #10     Jan 9, 2008