Loading ...Brings back some memories. I remember when they raised rates from 5% to 21% prime rate 1970 to 1982? Millions of people sold everything they had to buy a 5 year CD at the bank. The smarter ones locked in 16% on 30 year gov’t bonds, with no call back provision. All new dead money that can’t be spent and cause more inflation or investment in gold and silver antiques collectibles etc etc.
I also remember Mexico had a 35% rate. And the consensus was, a high rate is the sign of a weak currency. Basically, that stunt they pulled, worked to soak up excess money supply.
The other part of the “raise rates stunt”, killed the value of the gold and silver investments. So all that excess money invested also evaporated into money heaven. Meanwhile after 1971 they created floating exchange rates. And currencies trading like wheat on the futures market.
Everything on futures is traded in US dollars. So when they push the dollar higher, all the others go lower and vice versa. Depending on who needs export help. USA or the rest of the countries. Two groups. USA and all other countries. In general.
I once made sarcastic posts about this, decade ago, implying that if the fake USD crashed against all other currencies (like the Ruble) Import prices would get so high, it would be a breath of fresh air for the US producers and the US economy.
It would be like a huge tariff on imports making them un-affordable for us, and make US products much cheaper. No more foreign competition. Plus our exports would be mathematically cheaper, big discounts for foreign nations to buy our stuff, and all THEIR producers can go bankrupt instead of the USA producers.
Plus other nations can start opening shopping malls, and import cheaper high quality products from the USA. Shut down THEIR wealth creating factories, and open up wealth absorbing sales and service of American products. Let them end up 40 years later with a $30 trillion national debt and growing poverty instead of us.
A crashing Ruble may be a breath of fresh air for Russia. Especially if they have everything they need there. And be independent, and divorce the global “commune.”