Sunday, October 11, 2009

Printing of more dollars might not make it a cheaper currency

As US prints trillions of dollars to fix the credit and housing crisis, one would expect dollar to become cheaper compared to other currencies. The countries with huge loads of currencies and countries which depend heavily on US trade have incentive to keep US dollar strong. Those governments (not just China) will keep buying US dollars for a long time to come.

This might not even create hyper-inflation in US because the demand for US dollar goes up as it loses more value. Unless, the currency used in international trade (especially oil) and currency used for savings does not change, we don't have anything to worry about...Let federal reserve print even more money. Also let's keep controlling the governments which supply oil.

More f-16s and drones are what we need!

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