Language

Plot line derivation

Submitted May 2, 2004 - 1:31 pm by Bill Conroy
Sorry, on number 4 above in Plot Line, I should correct some unclear reasoning on my part. The reason the U.S. government eventually has to bolster the value of the dollar is to address its own deficit woes. A cheap dollar pisses off all the capitalists who have bought U.S. debt, because they are in effect getting ripped off. They bought the Treasury notes, or whatever, when the dollar was worth, say one Euro to one dollar. When the dollar is devalued, say to 80 cents to one Euro, then guess who feels ripped off when they only get 80 cents back on the Euro they lent out, instead of $1. That tends to drive the investor class away from the U.S. debt markets.

So the capitalists force the U.S. to buck up the value of the dollar. If the dollar actually goes above $1 to one Euro, then U.S. debt actually gets cheaper. But, of course, the stronger dollar screws economies who have been sucked into dependence on the low-value dollar, like Mexico in the example above.

It's like playing a card game where certain people at the table, primarily by privilege of birth, are allowed to change their wagers after the cards have already been called.

And all the $/NP, JPM EMBI+, bps jargon bandied about by investor-class sophisticates doesn't change the fact, that in this game, the house always wins.

Reply

Our Policy on Comment Submissions: Co-publishers of Narco News (which includes The Narcosphere and The Field) may post comments without moderation. All co-publishers comment under their real name, have contributed resources or volunteer labor to this project, have filled out this application and agreed to some simple guidelines about commenting.

Narco News has recently opened its comments section for submissions to moderated comments (that’s this box, here) by everybody else. More than 95 percent of all submitted comments are typically approved, because they are on-topic, coherent, don’t spread false claims or rumors, don’t gratuitously insult other commenters, and don’t engage in commerce, spam or otherwise hijack the thread. Narco News reserves the right to reject any comment for any reason, so, especially if you choose to comment anonymously, the burden is on you to make your comment interesting and relevant. That said, as you can see, hundreds of comments are approved each week here. Good luck in your comment submission!

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.

More information about formatting options

User login