Episode 323: Losing the Dollar
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The Negative Effects of the Dollar on Demand
If we're looking at a situation in which there are lots of dollars floating around in the world and demand is dropping like a stone, the only thing we could ever see under those circumstances is wholesale inflation. I wouldn't be surprised if that's one of many reasons why you have the stagflation in England in the 70s,. The lower demand for the pound meant less of an appetite for the guilt-edged bonds as they call them. We're seeing that already. Although not because of the decline in the reserve currency, but over the past two decades, while foreign governments have been purchasing more and more treasury bills.
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