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Sunday, January 11, 2009

Financial Times - Cool Personal Checks

By Carol Scrupf

Cool checks into the economic situation is the barometer of inflationary vs. deflationary. People are often confused about the times they are living in and make poor economic choices.

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

In a deflationary environment, the guage of value of almost everything decreases. Your home decreases in price; the value of gasoline, goods and services come under pressure. The value of stocks and hard good assess decreases.

The value of the buck goes up in a deflationary environment. Quite the opposite of an inflationary environment.

When the price of the dollar increases, it also increases against foreign currencies. The dollar buys more.

Everything is costing less. The worth 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.

When goods and services cost less, you're living in a deflationary environment. The buck buys more and the worth of the U.S. dollar abroad increases also.

The European economy is collapsing and the least worst currency worldwide is the buck . Your cool personal checks: for a safe place to keep your money is in U.S Treasury Bills.

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