Wednesday, October 29, 2008

According To The Plan Of The Split-Second...

Interest rates in the USA have been cut again.

This means that those still earning can borrow a little bit extra and spend it.

This will provide a boost for another couple of weeks or months, until the elastic runs out again, and people are again in as much debt as they can support.

Meanwhile, the dollar will weaken, as it returns less, and so the prices of all the imports will go up.

This means that the people still earning, and now in even more debt, will actually be physically capable of buying less.

If this was Japan, where they are capable of building for the home market, the impact would not be great.

But this is the USA, where they rely on imports from China.

The Chinese will be urged to cut interest rates also, to prevent the dollar collapsing.

And here is the point;

in 1929, the UK urged the USA to cut interest rates to prevent a Sterling collapse.

And we all know 'what happened next'.

But just in case, here is the Great Depression.

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