What am I thinking today?

Tuesday, February 24, 2009

Leverage

Subject Theory of Value states that the very process of exchanging items lead to increase in wealth of society. If we look at this in the global trade context, we can say people in US are exchanging USD for goods made in foreign countries. People in US want the goods made while people in the foreign countries want the dollars and they are both happy, aren't they? Except ... sooner or latter people in US run out of USD and what do they do then ... Money Creation comes to the rescue!