29 Jan '12 02:57>
Here is a question for you kids, if the US dollar ceases to be the world's reserve currency, wouldn't that triggor hyperinflation in the US?
Originally posted by KazetNagorraI'm rather less than expert but it's interesting to have a go.
How exactly does not being the world reserve currency trigger hyperinflation?
Originally posted by finneganI'm not sure my macro-economics is still 100%, but I think I spot some problems in you analysis. For one, a falling dollar would stimulate exports, as the price of products will fall in foreign currencies if the dollar price remains stable. The increased demand for American products will increase prices for American products (in dollars) in the USA itself, increasing inflation.
I'm rather less than expert but it's interesting to have a go.
Supply and demand. If there is less demand for the currency, then its value falls in relation to alternative currencies. This will result in the need to charge more in dollars for exports and pay more in dollars for imports. Hence exports will earn less (less competitive) and imports will ...[text shortened]... t.
I don't quite see where hyperinflation comes into this. Would it not be deflationary?
Originally posted by BartsI would trust your analysis more than most self described experts, like Tim Geitner, who can't figure out how to use Turbotax.
I'm not sure my macro-economics is still 100%, but I think I spot some problems in you analysis. For one, a falling dollar would stimulate exports, as the price of products will fall in foreign currencies if the dollar price remains stable. The increased demand for American products will increase prices for American products (in dollars) in the USA itself, inc ...[text shortened]... 's something that's very hard to judge for someone who is not an expert in macro-economics.
Originally posted by whodeyIt could, but the hyper inflation's cause is already out there, and loss of the reserve currency would only be a possible trigger, among many others. The cause of an avalanche is massive snow drifts on the mountain side. It is probably going to come down, regardless of what triggers it.
Here is a question for you kids, if the US dollar ceases to be the world's reserve currency, wouldn't that triggor hyperinflation in the US?
Originally posted by Bartsa falling dollar would stimulate exports, as the price of products will fall in foreign currencies if the dollar price remains stable.
I'm not sure my macro-economics is still 100%, but I think I spot some problems in you analysis. For one, a falling dollar would stimulate exports, as the price of products will fall in foreign currencies if the dollar price remains stable. The increased demand for American products will increase prices for American products (in dollars) in the USA itself, inc ...[text shortened]... 's something that's very hard to judge for someone who is not an expert in macro-economics.
Originally posted by normbenignOr too many dollars coming home because foreign countries are using them less. The world reserve currency is able to export inflation. A reduction in the world reserve status would have the opposite effect.
It could, but the hyper inflation's cause is already out there, and loss of the reserve currency would only be a possible trigger, among many others. The cause of an avalanche is massive snow drifts on the mountain side. It is probably going to come down, regardless of what triggers it.
The cause of hyper inflation is too many dollars being created out of thin air.