Tag: exchange rate

The Bail-Out and The Two Paths Ahead for the US Economy

Here at Docudharma yesterday’s diary on The Magic of Default Swaps: You Too can be an Insurance Company, cassiodorus says:

Dollar hegemony, however, can only prevent a general contagion of dollars up to a point.  What that point is, however, is a mystery. … Thus hyperinflation and currency crash.

As I see it, there are two paths ahead.

(1) A crash program of investment in sustainable energy production and energy efficiency in transport, housing and farming, leveraging the exporters-exchange-rate the US$ will be seeing into a central position in the growth industries of the 21st century … or …

(2) We try to continue on the same unsustainable course, and have a hyperinflation.

Background, more detail and analysis beyond the fold.