[dave4420]

There are no fewer dollars in the US dollar currency area after the sale than before… but those dollars are worth less than before. If capital has not left the area, it has been destroyed. That’s not to say that the US economy is inevitably doomed… but you sound very bullish.

[neilwilson]

They are not worth less in dollar terms. The same number of dollars will still settle next months mortgage bill, or tax bill regardless of what it may or may not exchange into Euros.

And the exchange rate of barrels to tomatoes hasn’t changed as that is a productivity issue.

There is no universal chart against which value is determined. Instead there are ever moving currency zone orbits, possibly shifting financial savings around.

What there won’t be is any “shortage of capital”

[testing22321]

> They are not worth less in dollar terms. The same number of dollars will still settle next months mortgage bill, or tax bill regardless of what it may or may not exchange into Euros

By that logic you are saying if the US dollar to Euro went 10 to 1 or even 100 to 1 there would be no impact because the same number of dollars will still settle the mortgage or tax bill.

Surely there is a flaw in your logic.

[coldtea]

>They are not worth less in dollar terms. The same number of dollars will still settle next months mortgage bill, or tax bill regardless of what it may or may not exchange into Euros.

If only our living expenses were just taxes and mortgages, amiright?

This take reminds me of the old joke:

“I don’t get why people complain about gas prices going up. I used to put in 40 bucks, and I still put in 40 bucks.”

[dave4420]

You sound like Harold Wilson.

I don't mean to suggest that the current American devaluation is as large as the UK's 1967 devaluation, at least so far. Just that your reasoning here is wrong: when your currency falls, that has a domestic inflationary effect precisely because your currency is worth less than before.

[gus_massa]

> The same number of dollars will still settle next months mortgage bill, or tax bill regardless of what it may or may not exchange into Euros.

If nobody wants dollars, then to import things it's necessary to send more unwanted dollars, so the exchange rate does up, so everything imported is more expensive, so you have inflation, so the interest in the mortaje goes up, so you have to pay more.

[Hi from Argentina! Been there, done that, got a pile of worthless bills as souvenirs.]

[morcus]

On the mortgage and tax bill specifically, sure there is no impact.

But I (an American) pay for some European services in Euros, meaning those got 10% more expensive. I understand this might be the intended effect, but it's not good for me.