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  • Leon Apel 6:26 pm on June 21, 2010 Permalink | Reply
    Tags: currency, economics, g20   

    European G-20 members will make deficit reduction a central theme in Toronto 

    Apparently, German leadership and Canadian leadership have made statements on aggressively reducing deficits.

    At the same time, China’s economic leadership made statements that it wants a new reserve currency.

    I think it’s challenging to get buy in from so many self-interested actors.

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  • Leon Apel 11:49 pm on June 9, 2010 Permalink | Reply
    Tags: deflation, economics, inflation   

    On Current Inflation and Deflation in America 

    Currently, there is significant inflation and deflation in America. I’m going to give two quick examples on why this is happening simultaneously.

    Inflation: There is significant inflation in the form of increasing the supply of funding. The government is doing a great deal of lending. Apparently the US government is issuing up to 75% of new mortgages.

    Deflation: Due to globalization, wages are decreasing as companies are hiring overseas to remain competitive. For example, GM and Ford are boosting Mexico output With $26-a-Day Workers

    Therefore, it’s important to be very specific when discussing inflation and deflation because both forces can occur simultaneously.

    Further, the real value of currency and GDP are important variables when assessing America’s economy.

    One of the most important variables is China’s willingness to subsidize the strength of American dollars by accepting increasingly devalued dollars as the real value of American dollars continue to decline.

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