And East Timor, the British Virgin Islands, Panama, El Salvador, the Federated States of Micronesia and several other countries: QE3. Inflation. See, they all use the U. S. Dollar as their actual money, though some of them mint their own cent-value-equivalent coins as well; another handful of countries use our dollars alongside their own money at a fixed rate of exchange. While the various dollar-shrinking tricks the Feds are pulling may not make all that much difference to an Ecuadorian buying Ecuador-made goods in Ecuador, he's certain to feel the pinch when he goes to buy a Japanese TV or a Korean car -- or a celphone made in China. (And let's not even talk about what it does to the tourist trade in the British West Indies, though you can bet they are.)
So remind me again how the Administration is such a friend to the little guy internationally? Pity's sake, not only do the folks in those countries have no more chance to vote on the Great Mind (ahem) in charge of the Fed than we do, they can't even vote on the guy who picks him.
Best of all? Some of those countries ended up switching to U. S. dollars after their central bank tried to print its way clear of economic woes. It's the Wile E. Coyote school of economics: does jumping off a cliff work any better when the cliff is a hundred times as high?
Update
3 days ago
8 comments:
Panama I can understand; until we handed them the Canal, they were pretty much a wholly-owned subsidiary of the US.
Similarly, the Federated States of Micronesia were a Trust Territory of the US until 1979, so they might have good reason to continue using the dollar. (Interesting fact: They're independent, but the United States Postal Service still treats them as domestic mail...DMM 608 section 2.2.)
The others, I dunno. But for a long time it made perfect sense to tie your currency to the dollar, if you could get away with it. Might make sense again if we could get rid of the socialists in our midst.
Funny how that hope and change stuff keeps having unintended consequences.
Few think of such things. I don't know if it's beyond their comprehension or they're too lazy to do a little research to find out why everything they buy costs more than it did in the past.
If monetary inflation was illegal drugs, the cut would be so bad, people would be trying to get high on hamster litter, or talcum powder.
As with all places it's the savers/investors who'll be suffering courtesy of QE3, and relatively few in those countries. The average man/woman in the street will shift to 'alternatives' which are already the staple away from the cities anyway.
Me, I'm worried about at what point the 'big boys' start looking askance at the dollar. We've already seen multinationals here in Europe transferring their daily take to UK banks and Sterling (£) at the end of each days trading as they grow less trustful of the Euro.
How long before the rumblings against oil trading in dollars etc. becomes a reality? At that point I'd say all bets are off. To be honest I think it would have happened already except for the fact there isn't a viable alternative - yet! It all hinges on the trust and reliability. of a currency most of us have no say in (not that we have one in our own currencies either and as soon as your idiots start ours will follow).
Me, I'm following JWR/MG etc. and getting into tangibles. 'Interesting Times' ahead.
Don't forget, that BIG OIL is traded in Dollars also, so the entire World gets to enjoy the Benefits of the Feds "Weimar Republic Economic Policy."
Oh, as for the Euro? Well, since they have decided that certain Countries are "Too Big to Fail," they are getting their worthless Bonds bought up with assistance of the IMF and the World Bank. And guess which country funds about 30% of the IMF and the World Bank, boys and girls? Why the United States, of course!
You know, if this goes on, someday soon we might see wheelbarrows full of Euros being swapped for wheelbarrows full of Dollars.
Which is why I'm investing in Canned Food with Long Shelf Lives.
And Ammo, of course.
Well, you can't say we weren't warned.
Pity's sake, not only do the folks in those countries have no more chance to vote on the Great Mind (ahem) in charge of the Fed than we do, they can't even vote on the guy who picks him.
No, but thanks to the Miracle of Selective Enforcement, they can contribute to his re-election campaign.
Your internets awaits you, Ken!
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