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alstry (35.36)

Devaluing The Dollar Increases Input Costs......

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December 02, 2010 – Comments (2)

As we trash the dollar...the costs for internationally priced commodities like food and fuel will skyrocket squeezing the margins of businesses as they can't pass on the costs to customers...

not only that, as the cost of food and fuel rise....the discretionary income for customers become focused on food and fuel and leave less and less for other areas like housing and discretionary purchases.....

and then when jobs are lost and wages cut to offset rising input costs.....the whole economy collapses.

2 Comments – Post Your Own

#1) On December 02, 2010 at 9:47 AM, davejh23 (< 20) wrote:

I agree.  Many believe that high inflation will save the stock market.  However, inflation crushes margins as wages fail to keep up...corporate profits suffer.  If we see hyperinflation, stocks may rise, but in real terms they will still be a losing investment. 

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#2) On December 02, 2010 at 9:51 AM, Alexinthebox55 (90.32) wrote:

In real terms in the long run, stocks reflect the value of the dollar.

 

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