The Real Interest Rate Conundrum  Henry C.K. Liu  Part I: The
Real Interest Rate Conundrum  Part II: Currency Devaluation
Depresses Wages Globally  This article appeared in AToL on June
13, 2007 as How currency devaluation destroys wealth  In today’s
financial world, a liquidity boom produces rising nominal or
face value in return on investment (ROI) with an increasingly
hollow economy in two ways: 1) by devaluing all currencies
against real assets and 2) by keeping down wages and worker
benefits around the globe.  Thus while all currencies devalue
steadily but not at the same pace, all of them devalue faster
against real assets and slower against labor cost because wage
adjustments tend to lag behind both real and nominal inflation
rates. This translates directly into low real valuation for
labor, structurally constraining growth of demand to fall behind
growth of supply. This in turn leads to an overcapacity economy
of declining consumer purchasing power. Neo-classical economists
call this the business cycl