Great Depression Online Archive Issue:

When Kids Don't Want Candy

Great Depression Online
Long Beach, CA
February 22, 2008

Inside This Issue You Will Discover…

*** When Kids Don’t Want Candy
*** The Lowly American Dollar
*** More Sellers, Less Buyers
*** And More

When Kids Don’t Want Candy

We remember as kids coming home with a pillowcase full of candy on Halloween Night.

We were in heaven.

We stuffed candy down our throat until our mouth swelled and our stomach ached…  And then we stuffed some more.

The next day we repeated the act, but with a little less zeal.  By the third day we left the leftover candy alone.  And by the fourth day we tried to give our candy away…only we couldn’t.  No one wanted it.  For every kid already had too much.

So our now worthless candy went where worthless things go – the trash.

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~~~~~~~~~~~~~~~~~~~~~~~~~

That’s what happens, we found, when you – and everyone else – suddenly has too much of something.  All at once, no one wants it anymore.

The Lowly American Dollar

Here we’ll turn our attention to the motivation of this reflection. 

We were reminded on Tuesday, by Don Lee writing for the Los Angeles Times, that “Nobody here [in China] wants the lowly American dollar anymore.”

It seems they have too many of them.  And that they are losing value against the Chinese yuan.

In fact, “Thanks to its huge trade surplus, Beijing [China’s central government] is sitting on the world’s largest stockpile of foreign reserves – about $1.5 trillion, much of it in U.S. dollars.”

But it’s not just the government that’s overloaded with dollars…after selling a bunch of doodads to Americans in exchange for dollars over the years, businesses and individuals have had their fill too.  Now, all at once, they don’t want them anymore.  They want something else.

“Money-changers are so flooded with dollars that they refuse to take any more.  It’s too risky, they say, because the Americans currency’s value is slipping everyday.”

More Sellers, Less Buyers

You can see how this perpetuates.  No one in China wants dollars because they are losing value.  Plus they have too many of them.  And like anything that there is a lot of – and that no one wants – you must lower its’ price for it to sell.  But because the dollars price, which is also its’ value, is dropping, everyone wants to sell…not buy.

And how quickly things have changed…

“Just a few years ago, Li [Li Yiwen], like many Chinese, treated dollars like the most precious commodities.”

‘“I thought I should exchange to get dollars whenever I had the chance,’ she said. ‘The dollar seemed to be very valuable and hard to get…”’

But like a bag of M&M’s to a kid on the days after Halloween, nobody in China wants the lowly American dollar anymore.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  Last month we introduced you to the Fibonacci sequence and the Elliot Wave Principle.  If you don’t remember you can reread the issue at: Medieval Mathematics from Pisa Italy.  Now – until March 1st – a recent issue of the Elliot Wave Theorist, valued at $29, is your’s for free.  This must read newsletter includes a single chart that delivers more wisdom than a full week of financial television…when the stock market will bottom…uncommon news you won’t find in tomorrow’s papers…and much, much, More.  Learn more at: Free Elliot Wave Theorist.

 

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