Post #680 by tecmo on the Falling Knives board

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Mainly the effect is "it really is a real loss of wealth, just not very obvious to folks living surrounded by the dollar world". Everybody with a fixed USD salary just took a true pay cut, but it isn't visible because their barbers and dentists did too. But both of them will be buying stuff from other countries, or buying services from people who had to buy inputs from elsewhere, so most of it will show up as inflation that slowly spreads through the economy.

I don't know the exact impact of a drop in the dollar on inflation, but I would say that it has not been easy to identify at the very localized level. Also; its hard to understand what a single individual could do about it? I suppose if I was living off my investment income I could swap assets to a different currency, but the idea of moving to a new country and getting a job in a different currency seems pretty extreme.

tecmo
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