DOWn Nov. 7

[Issachar]

Closed DOWn 361; 2.64%

Issachar

[Bernardd]

and...?

[jds6958]

wow, just got back...that is a rather significant tank...maybe the markets will rebound a little tomorrow, but I can't imagine Friday looking to good as few traders will want to hold over the weekend...

[PrincessofHeaven]

yeah i think we will have some ups but i think its down hill from here

[God4Us]

wow, just got back...that is a rather significant tank...maybe the markets will rebound a little tomorrow, but I can't imagine Friday looking to good as few traders will want to hold over the weekend...



BIZNETDAILY
WorldNetDaily Exclusive
Alarm: China signals flight from dollar
Investment CEO says he's 'never seen people more nervous' :panic

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=58563

[PrincessofHeaven]

if China does we are done for economically and then the snowball effect

[Bernardd]

yeah i think we will have some ups but i think its down hill from here
How many times have we heard that?

[icebear]

if China does we are done for economically and then the snowball effect

Can someone explain to me exactly why that is and exactly how it will work?


i'm not good with this sort of stuff, so please use as many small words as possible! :D Thanks

*puts on Brain Wave Accelerator Helmet*

[jds6958]

Can someone explain to me exactly why that is and exactly how it will work?


i'm not good with this sort of stuff, so please use as many small words as possible! :D Thanks

*puts on Brain Wave Accelerator Helmet*


I like the way that Issachar put it:

One way to think of this "too many dollars" issue ...

What's more valuable? An ounce of gold or an ounce of sand? Well, the gold of course. Why? Many reasons, not the least of which, gold is not just lying around, common like sand. So in a sense, the more there is of something compared to demand for it, the less value it has.

Same with dollars (or any currency) ... the more of them there are compared to demand, the less value they have. If they are needed for purchasing goods and services, and they lose value, then more of them are needed to purchase the goods and services. Some call this increase in prices, inflation. But as you can see from the above, inflation is actually an increase in the money supply which devalues the money which makes things purchased with that money, cost more.

So, when a large holder of US dollars such as Japan, China, Saudi Arabia, etc. start to unload them, the economy becomes flooded with excess dollars and voila; increased prices due to a devalued dollar.

A side note that is related. Many folks in wealthy nations such as the US, confuse the cost of something with value. For example, when the price of houses was going up at unprecedented rates in the past 10 years or so, many people talked of "the value of their house going up". Price and value are not the same thing. The same building; maintained, sitting on the same piece of ground, year after year after year, is NOT increasing in value; only price. Now if someone added a fireplace, built in pool, a second floor, added on a room or turned a damp, dingy basement into a warm, dry livable room, then they increased the value. Then a higher price is warranted. But when pricing goes up and up but not value, that is merely price inflation.

hope this helps some ....
Issachar

[Cameron]

Why does no one post a message when the Dow has a record day? :idunno