Who looses if there is a LOP

[AudiS4]

In a sense, no body really loses $$$ on a R/D (With the exception of losses within trading via the spread such as mark-up, fees, etc).

However...... Opportunities are lost, potential is lost, and a stimulating of the country is lost.

Lets use a made-up scenario to explain using the US & call it TEST-US to help prevent confusion.

The Test-US has a high unemployment rates of roughly 50%

The Test-US has a currency value similar to Iraq.

The Test -S has potential to eventually become a striving economy, due to their resources (oil)

The Test -US lacks a private sector and job opportunities

So the numerical value sitting in the average American (From the Test-US) account is 1,000,000 US(Test-USD)

This value equals in reality $1,000 (Real-Value USD)

The Test-US has a stabilized economy with low inflation

The Test-US is looking to improve their economy, private sector, and reduce unemployment.

The Test-US has two options 1) R/D or 2) R/V

The R/D is the safe route and makes an exchange rate more appealing. Foreign investors do not lose money

However, the R/V is the potential economic boom the Test-US would need to become a striving economy.

How so? Imagine if the 1,000,000 Test-USD becomes equal to $1,000,000 Real-Value USD

The Test-US citizens now have money to spend and would look to improve their livelihoods such as: Buy a house, car, electronics, and other goods.

Foreign Investors would see an opportunity to take advantage of the Test-US peoples wealth and set-up shop in the Test-US country. They would supply goods, service, and even jobs to those that are unemployed. This puts them to work, gives them an on-going paycheck, while the foreign investors profits and the Test-US citizens are happy to work. This would also drive up the demand for the Test-USD as foreign investors would need to trade upon the new rates to conduct successful business within the country. As more jobs are created, more people work, which results in more spending. Poverty is decreased, quality of life is increased, and people may feel a sense of a peaceful environment.

Now, can we say that we can see this sort of "boom" upon a R/D? No, but it doesn't mean that the people will soon get to that same status in the long-term.... It would just be a slower process. A R/D would not necessarily create more jobs. It would not reduce poverty or increase the quality of life as a R/V would.

But, here is the argument of the R/V and delayed effect. As a R/V occurs, there would be that moment in time where people have wealth but no where to spend it. Imagine being a millionaire on an island with no markets, job opportunities, etc and only being able to survive by your own means. Imagine sharing that island with millions of others as well. Now if foreign investors were aware of the wealth of the people residing on the island, they may setup shop.. Put up companies such as Wal-Marts, restaurants, etc. Ship in goods to help build houses, etc. Well you see where I am going with this.

What are other benefits of the R/V? Well the economic "boom" would make democracy more appealing. Is that not the overall goal of the U.S.? Spreading democracy? The US Govt sure spends a lot of money to try to spread democracy. I think Obama even mentioned how even with our current debt, he would find the money somewhere to help supply newly formed democracy and spread democracy. "Hmmm" Things that make you go Hmmmmm, huh?

I'm not saying it is going to happen one way or another, I just see the benefits of the R/V over the R/D. The R/D is the low-risk safe route.....

I've been trying to preach this scenario for a while now. Not sure if people just dont understand or what the deal is. I fully agree and gave you a +