If the United States devalues the dollar

[Mr. Lackawanna]

If the United States devalues the dollar what effect would it have on the average United State citizen?

[run4it]

How do you mean,"devalue" the dollar? Technically inflation "devalues" a monetary unit, but also is a natural phenomenon, especially in our type of economy. When you talk about this kind of devaluation, it is less important because, while the real value of a dollar may change, the value of the dollar, outside other circumstances, does not change in relation to the value of other monetary units subject to like inflationary pressures.

Are you talking about declaring national bankruptcy? Are you speaking long term or short term? If national bankruptcy is what you're concerned about we can talk about the actual likelihood (or lack thereof) of this happening.

A little more info, please.

[mikenold]

Soon enough, the Fed will have to start printing money (although they already are doing this) as they do not have enough money to cover the budget. What happens if we have another disaster like 9/11 or Katrina? Once money is being printed the value of the dollar goes down. China has already warned Obama about printing money and a devalued dollar which would make their investments shrink in value. Something has got to be done immediately about the out of control spending generated by Obama and the Dems or our money is going to lose value quickly.

[zanna vaida]

Where are you going with this conversation?

The United States is a GENERAL word and doesn't do anything by itself. People who are in economical control of the country do. They are the decision makers on where and how to lead the United States economy.

Do you think the US dollar is lossing its value? Give examples.

[WNYresident]

EVerytime they print more paper money and nothing to really back it on it's devalued... Correct?

[mikenold]

EVerytime they print more paper money and nothing to really back it on it's devalued... Correct?

Yes!

100 dollar bills = 1 gold piece
1 dollar = 1 loaf of bread

Print another hundred then:

This has resulted in cutting the value of the dollar in half.

200 dollar bills = 1 gold piece
2 dollars = 1 loaf of bread

This is a very simplified view but I think clearly shows the result of arbitrarily printing more money.

[run4it]

Ever heard of the Money Multiplier in any credit system? Inflation happens whether you print more money or not.

[Bioguy231]

Depends. The inflation we usually see requires that the US print more money so there is the availability of money. If however, we print more money in the absence of inflation, we end up starting inflation.

[run4it]

Depends. The inflation we usually see requires that the US print more money so there is the availability of money. If however, we print more money in the absence of inflation, we end up starting inflation.

Two trailer park girls go round me outside...

[run4it]

Yes!

100 dollar bills = 1 gold piece
1 dollar = 1 loaf of bread

Print another hundred then:

This has resulted in cutting the value of the dollar in half.

200 dollar bills = 1 gold piece
2 dollars = 1 loaf of bread

This is a very simplified view .

A little too simplistic.

If you use the extra dollar printed to produce a second loaf of bread, you still have the same dollar-to-bread ratio.

Thus the use of 'stimulus'.

[mesue]

If the United States devalues the dollar what effect would it have on the average United State citizen?

If? It's already lost it's value.
http://useconomy.about.com/od/tradep...llar_Value.htm

[mikenold]

A little too simplistic.

If you use the extra dollar printed to produce a second loaf of bread, you still have the same dollar-to-bread ratio.

Thus the use of 'stimulus'.

You have a strange bit of math there. The second dollar printed makes dollars 1 and 2 worth only 50 cents each. I really don't see the price of bread coming down in price just because we print more money.

Stimulus? It seems that Obama and the Democrats in Congress went to the same math class as you did.

[run4it]

You have a strange bit of math there. The second dollar printed makes dollars 1 and 2 worth only 50 cents each. I really don't see the price of bread coming down in price just because we print more money.

Stimulus? It seems that Obama and the Democrats in Congress went to the same math class as you did.

Dollar-to-bread ratio Mike. In your instance, you have one dollar for each loaf of bread. In my instance, you have one dollar for each loaf of bread. Is this not true?

Now I admit that mine is a little simplified as well, but it has a little more nuance than yours. I minored in economics. How about you?

[mikenold]

Dollar-to-bread ratio Mike. In your instance, you have one dollar for each loaf of bread. In my instance, you have one dollar for each loaf of bread. Is this not true?

Now I admit that mine is a little simplified as well, but it has a little more nuance than yours. I minored in economics. How about you?

I majored in Mathematics. If a loaf of bread is 1 dollar (100 cents) and the dollars loses value and is only worth 50 cents, then it takes 2 dollars to buy the same loaf of bread.

To the economist: Bread is 1 dollar. Obama orders the fed to print more money. The resulting inflation has caused the price of bread to be 2 dollars. Do you remember the Carter years?

[run4it]

I majored in Mathematics. If a loaf of bread is 1 dollar (100 cents) and the dollars loses value and is only worth 50 cents, then it takes 2 dollars to buy the same loaf of bread.

To the economist: Bread is 1 dollar. Obama orders the fed to print more money. The resulting inflation has caused the price of bread to be 2 dollars. Do you remember the Carter years?

Way to pretend that the refutation didn't happen. Typical.

I asked a simple question: was my example not true? No answer, I see...