Friday, December 26, 2008

Economic Checks - Cool Personal Check

By Donna Werzheimer

Cool Checks to make sense of the times you are living in. If you live in a deflationary time or inflationary time the consequences are as dire as if you live in inflationary times. Often people are confused as to what economic times they are living in.

In a deflationary environment, when themeasure of value for goods and services goes down, the value of the dollar goes up. The logic goes seemingly against human intuition.

Opposite of inflation is deflation and with deflation, most assets decline in value. You see the guage of value of your home decline in value as well as gasoline. Corporate equities, mutual fund shares, insurances and pension reserves and equity in non corporate business decline.

There is only one exception; the buck goes up by definition. The opposite is true. When the cost of goods and services goes up the level of value of the dollar shrinks.

Along with deflation, the buck value goes up. Its value goes up against foreign currencies. The buck buys more.

Everything is costing less. The state of value of a particular currency has nothing to do with how their economy is doing. The value of a currency is base on how it compares with other currencies. You can't evaluate a currency in isolation.

If you see your dollar buying more, it means the measure of value of the buck is increasing. The U.S. dollar increases against foreign currencies as a market basket of value and it also buys more goods and services as a whole abroad.

The coolest, cool personal checks for the safest place to have you money in deflationary times in Treasury bills. The least ugly investment worldwide is U.S. currency.

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