Wikinvest Wire

A dollar based on "perception"

Thursday, June 18, 2009

I don't know who this guy is, but he makes a number of very good points, the most important of which is that many comparisons to the conditions present during the Great Depression (e.g., deflation) are inherently flawed since the U.S. Dollar is fundamentally different today than it was back in the 1930s - backed by gold then, today backed only by perception.

1 comments:

rahuldeodhar said...

There is one other reason why 1930 is different than today.

Today China is where US was in 1930 where as US currently is where Europe was in 1930.

So Chinese stimulus - a keynesian strategy - makes sense.

US following that strategy does not. Because A) It means extra load on china to keep buying US treasuries
B) It props up dollar leading to no job increase!

Nice video

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