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Post by unlawflcombatnt on Feb 18, 2008 5:55:39 GMT -6
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Post by unlawflcombatnt on Mar 27, 2010 12:14:20 GMT -6
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Post by cheshireprofessor on Apr 1, 2010 17:30:16 GMT -6
Are you the author of: unlawflcombatnt.proboards.com/index.cgi?board=globalization&action=display&thread=2508-------------------------------------------------------------------------------- Trade Deficit: Inflation vs $ Devaluation Post by admin on Feb 7, 2008, 3:49pm Trade Deficit: Domestic Price Inflation vs. $ Devaluation -------------------------------------------------------------------------------- If so, very well considered, supported, and comprehensive. I ran across it because I was interested in discussions and arguments that differentiated Inflation and Devaluation of Currency. There are reasonable cases made that inflation does not neccesssarily follow devaluation and I submit that the same may be applicable with increasing trade deficits. Trying to avoid the cliche that 'this time is different' however may it not be valid? The supporting history cited always had consumer equity and/or credit available to help drive price inflation - a condition that is generally held to not currently exist. Another point of exploration and consideration might be that with declining disposable income there exists both a relative price inflation and downward pressure on prices. Thx.
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Post by unlawflcombatnt on Apr 1, 2010 23:51:40 GMT -6
Are you the author of: unlawflcombatnt.proboards.com/index.cgi?board=globalization&action=display&thread=2508-------------------------------------------------------------------------------- Trade Deficit: Inflation vs $ Devaluation Post by admin on Feb 7, 2008, 3:49pm Trade Deficit: Domestic Price Inflation vs. $ Devaluation -------------------------------------------------------------------------------- If so, very well considered, supported, and comprehensive. Thank you, and yes, I am the author. Another point of exploration and consideration might be that with declining disposable income there exists both a relative price inflation and downward pressure on prices. Yes, that's an excellent point. If disposable income is dropping more than prices (or not rising as fast as prices are rising), it reduces real consumer buying power—reducing production demand and resultant labor demand as well. That's a point no one ever seems to address. The Bernanke-led Fed seems overly concerned about price deflation, and under-concerned about real consumer buying power. It seems to me that if there were a current-dollar fall in prices that exceeded the fall in wages, then real consumer buying power would increase. In theory that should increase real-dollar production demand, which should also increase labor demand and employment. The alleged "growth" of our present-day economy, however, seems dependent upon growth in spending that exceeds real income. The key word here is "alleged." It further seems that if aggregate debt increases more than GDP increases, then it should be considered economic contraction—regardless of whether GDP is reportedly positive. In the same vein, if aggregate real wealth declines, it should be considered economic contraction—regardless of any reported GDP growth.
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