Whoops, there goes Sabri's investment plan. Switching to a serious mode, I think the observation Julio makes is important. But if people flee the dollar, what do they turn to?
Gene On Apr 12, 2012, at 5:51 AM, Julio Huato wrote: > I just noted that Paul Krugman posted something on his blog on "safe > asset shortage," apparently based on an IMF paper. He is, of course, > skeptical of that story. I cannot carefully read all that, but I'll > make a quick note and then go on with my day. > > I think that this is a *real* issue. That Treasuries or USD money > market deposits are now viewed as a safe asset is a very fragile > social structure, if I can put it that way. In a (capitalist) social > environment that feeds "uncertainty," all social structures (including > entire markets and even states) are subject to fads. They are not > very hard to unravel, because people can behave in weird ways that > feed back into themselves. Sometimes people like strawberry ice cream > and there are shortages of strawberry ice cream, and the next day they > find that strawberry ice cream increases their cholesterol and all of > a sudden there's an oversupply of the thing. I am not predicting > anything. For all we know at this point, Treasuries and USD deposits > may be the safest store of value in the universe, and monetizing debt > can only lead to higher employment, which will then reinforce the > social structures underpinning it. But we should not leave the > assumptions that underlie such predictions unexamined, just because we > like the usual (pro-job) policy conclusions that flow from them. > That's all I'm saying at this point. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
