Thursday, March 10, 2005
Dollar Weakness Examined
The Mises Institute website published an editorial by economist Antony P. Mueller that has been all over the internet. The most interesting point Mr. Mueller makes is that key elements of the economy are politically priced.
"One must not forget that three of the most essential prices in the modern monetary economy are politically determined or manipulated prices: the oil price, interest rates, and the exchange rates." As followers of Austrian economics are aware, artificial structures eventually give way to market forces. "Taking away the interventions, the price that the U.S. pays for imported oil, and the price for money and credit should already be much higher than they currently are."
Mr. Mueller seems to conclude the result will be deflationary,"stocks, bonds, and real estate...all must come down when the fall of the dollar continues."
"One must not forget that three of the most essential prices in the modern monetary economy are politically determined or manipulated prices: the oil price, interest rates, and the exchange rates." As followers of Austrian economics are aware, artificial structures eventually give way to market forces. "Taking away the interventions, the price that the U.S. pays for imported oil, and the price for money and credit should already be much higher than they currently are."
Mr. Mueller seems to conclude the result will be deflationary,"stocks, bonds, and real estate...all must come down when the fall of the dollar continues."
# posted by Ben Jones @ 1:52 PM 
