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Saturday, December 27, 2008

Cool Checks in Deflationary Times

By Steven Timers

Consumers are often confused about the economic conditions they are living in. Everything has a cool check about label, and the extremes are that either we are living in inflationary times or a period of deflation.

If the pervasive economic condition is deflationary, goods and services become less expensive. The accounting of the dollar increases. Many cannot grasp that relationship.

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 U.S. dollar goes up in a deflationary environment. Quite the opposite of an inflationary environment.

When the value of the dollar goes up in the United States inevitably it goes up against other currencies. When the dollar buys more, its accounting is rising and acts like a magnet.

Check the value of the dollar in your personal purchases. Is the dollar's value is going up? It's buying more gas than it used to, buys more real estate than it used to, and gets better deals shopping for cars than before. Everything costs less.

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

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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