- CURRENCY SLIDE -

What is it that causes some currencies to continually devalue, (probably causing inflation.)

Given a sufficiently long timebase, some currencies appear to be always devaluing, such as the Australian dollar or the English pound and possibly, (it is still too soon to determine), the EURO.  To state it another way, some countries appear to be continually revaluing, such as the US dollar, the Yen or (to a lesser extent) the Swiss Franc.

Perhaps mainstream economists have got it wrong (again).  Perhaps controlling inflation does not control exchange rates?

Indicators possibly associated with currency devaluation are:

• Resource Rental; resource rental income (from e.g. oil, bandwidth, land tax) as a proportion of GDP.
• Resource Cost; imported cost of essentials (e.g. energy, food) as a proportion of GDP.
• Taxation Take; national tax as a proportion of GDP.
• Bureaucratic Cost;  cost of government as measured by total tax less transfer payments as a proportion of GDP.
• Regressive Taxes; where growth in the economy causes increase in the tax as a proportion of the GDP.
• Government Type;  whether corporate control is by a supply (GO) economy or a demand (NGO) economy, as measured by the operating cost of government instrumentalities compared to GDP.
• Control Mechanism; whether corporate control is by fear of injury-damages (measured by total damages awards as a proportion of GDP) or by fear of police prosecution, (measured by the cost of public prosecutions as a proportion of GDP).

It does not take a software wizard to know that any reasonably competent statistician could factor analyze the actual contribution of possible associated indices and calculate the importance of each to devaluation.   SPIN has done a few slide rule calculations & prepared a TABLE showing comparative currency devaluations (1993-2000) against the tax take for eight leading economies .

Given that maxi insight, here is the question.

Why has nobody published a factor analysis of the indices that might be associated with currency realignment trends?
 

(PERHAPS THE ANSWER TO THAT QUESTION IS ASSOCIATED WITH A PRIMARY FACTOR? - e.g.)

PERHAPS GOVERNMENTS HAVE TO REDUCE TAXES TO STOP DEVALUATION
 

SPIN ARCHIVES.

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