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Sunday, December 21, 2008

Deflationary Times - Cool Personal Checks

By Karen Chop

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

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

With deflation, almost everything goes down. Safety and protection is important and if you have all you money in antiques, real estate or hard assets or commodities the accounting of these goods decreases.

There is only one exception; the U.S. dollar goes up by definition. The opposite is true. When the cost of goods and services goes up the accounting of the dollar shrinks.

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

Everything is costing less. The state of value 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.

If you see your buck buying more, it means the value of the dollar is increasing. The buck increases against foreign currencies as a market basket of value and it also buys more goods and services as a whole abroad.

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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