Writing in yesterday’s Daily Reckoning, editor Bill Bonner observed: “People who lend in dollars get repaid in dollars. An obvious consequence of a falling dollar is that lenders have to expect to get less back than they originally invested. In the last few weeks, the dollar has lost about 5% against the euro. Yet, the 91-day T-bill lending rate is only about 4.90%. Go figure. Lenders expected only 4.9% on their money – for a full year. And in a few weeks, they’ve lost more than that, in international terms. What’s more, they still have to pay taxes on the nominal gains…and still have to suffer the effects of domestic dollar inflation.”
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In an e-mail, Ron mentioned that Time magazine reported the Marines in Iraq are using silly string to detect trip wires on IEDs.
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