Posted: Tue Dec 19, 2006 02:45 pm Post subject: Are you paying attention to the decline of the Dollar?
The sinking of the Titanic (if I recall correctly) was a big surprise to all on board. The post mortim, however indicated that there were several problems that made the disaster very probable before it left the harbor. For example, there were material problems with the steel and rivets, fatal design flaws and compromises in the design of "water tight" bulkheads, the rudder was too small, there were social and economic pressures which called for a full-speed trip across the Atlantic, and there was an incapacity of the technology of the era to plot the location of icebergs. In charge of all of this was a Captain who made the wrong choices.
"Rearranging deck chairs on the Titanic" has become a metaphor for paying attention to frivolous issues while a catastrophic problem encompasses the entire scene.
Similarly, few folks on deck here in the United States are paying much attention to the growing problem with the dollar. A 50-percent chance of economic collapse is greater by far than the likelihood of the sinking of the Titanic on her maiden voyage:
Quote:
MaineToday.com | Financial Sense: Ramifications of a Dollar Decline
Lietaer is the author of The Future of Money and is one of the individuals credited for creating the Euro currency. He was the keynote speaker at the Financial Planning Associations Retreat in Tampa, Florida earlier this year. In his discussion, Lietaer discussed four mega-trends that will come about and need to be resolved over the next fifteen years. One was the aging population, another involved the global economy growing faster than job growth and technology taking up the slack, the third was the climate change and the loss of biodiversity.
But it was the last mega-trend that got the audience on the edge of their seats. He predicted that there was a 50% chance the dollar would collapse and that the U.S. government would take actions that would remove the dollar as the world's reserve currency, creating a vacuum in the global economy.
Leitaer cited several different factors that could influence this type of crash. The U.S. and its "twin deficits" involving our trade imbalance along with our federal budget deficit was an obvious issue. He also cited that the stability of the U.S. dollar is not in the hands of the U.S. Federal Reserve, but in foreign hands. He stated, "Every single working day, the world has to invest 2.8 billion dollars in the United States to keep the system going; that represents 80% of global savings." And as an example, he discussed how China with its billions of Treasury debt in reserves, could potentially use this as a bargaining chip to keep the world from interfering with its ongoing friction with separatist Taiwan; threatening to dump its reserves on the market and cause a crash. Leitaer also mentioned that back in the 70's, Kissinger made a pact with the royal family of Saudi Arabia to make the global oil trade denominated only in dollars. No matter if you were China, France, or Japan, if you want to buy oil you have to do this in dollars. He warned, "This cannot go on forever" because of the potential for regime change and waning influence of Saudi Arabia on the other OPEC nations. Finally, the world could simply lose faith in the U.S. economy. As a result of the crash, he predicted the U.S. would experience a large decrease in consumption, a potentially higher income tax structure, and much higher interest rates. . . .
December 14, 2006: Santa Claus Is Chinese, Or, Why China Is Rising And The United States Is Declining
Quote:
I know Santa Claus is Chinese because each Christmas morning after all the gifts are unwrapped and things settle down I systematically go through the presents to see where they are made. The results are almost always the same: roughly 70 percent are from China. After some research, it seems that my one-family survey is representative of the country as a whole.
Let’s start with toys. Some 80 percent of the toys sold in the United States—from Barbie dolls to video games—are made in China. Talking toys that speak English learned the language from Chinese workers. Electronic goods—from Apple’s iPod to Microsoft’s Xbox—are made in China. Clothing—from the latest cashmere sweaters to gym suits—is also likely to have a “Made in China” label.
The Christmas tree itself may come from China. While real Christmas trees are grown in every state in the United States and are marketed locally, many families now gather around artificial Christmas trees. Eight out of every 10 artificial Christmas trees sold in the United States are made in China. Last year Americans spent over $130 million on plastic Christmas trees from China.
This year Americans will spend over $1 billion on Christmas ornaments from China. And in perhaps the greatest irony of all, even nativity scenes are made in China. Last year Americans spent more than $39 million buying nativity scenes shipped in from the East. China’s success in attracting foreign investment capital and mobilizing this huge workforce has made it the workshop of the world.
That the U.S. Christmas is made in China is a metaphor for a far deeper set of economic issues affecting the United States. Today Christmas is celebrated in both the United States and China—but for different reasons and with far different economic consequences. For the Chinese, the manufacturing bonanza means record profits, rising incomes, and, in a society where people save some 40 percent of their income, a sharp jump in savings. In the United States, Christmas shopping expenditures, headed for another record high this year, contribute to rising credit card debt and a soaring trade deficit.
Underneath the American Christmas spirit and good cheer is a debt-laden society that appears to have lost its way, marred in the quicksand of consumerism. As a society, we seem to have forgotten how to save so we can invest in a better future. Instead of leaving our children a promising economic future, we are bequeathing them the largest debt burden of any generation in history. . . .
The sad irony is that many of the people who voted in the current administration which sees fit to squander nearly half a trillion on overseas operations with no forseeable return of military or political capital also do much of their shopping at the same retailer that qualifies as one of the PRC's largest trading partners. They cut their own throats to save 10% in several ways. They accelerate the closure and relocation of whole industries, participate in the destruction of community infrastructure, and fund and fuel the military buildup of a country that's had a giant chip on its shoulder for most of a century (to some extent, for valid reasons) and which may not hesitate to breed the environment for a possible showdown in the pacific over taiwan. Perhaps the sickest part of the whole joke is that we're borrowing money from the PRC to buy shovels for the hole we dig for ourselves while many of our citizens are floating dollars over the pacific (in exchange for poorly made junk - I have some familiarity with chinese electronics) directly into the hands of the PLA.
At some point, a confrontation over taiwan may be inevitable. Will we blink, of course, is one good question since, by the time this may come to pass, the miltary forces of the PRC may possess considerable prowess in certain key areas (navy, stratetic rocket forces, air force). An equally good question, however, is can we afford to blink? If the PRC were to gain control over taiwan, a tech leader, the future military and consumer technology implications would not be good. Additionally, the capture/control of taiwan would push the PRC's territorial sphere of control out far enough that the japanese might be convinced that its time to not only double their current defense expenditures but perhaps nuclearize.
To some, it may sound crazy, the notion of a possible confrontation with china or the nuclearization of japan, but the 20th century is full, from end to end, with "crazy" events.
Who can say what will happen. One would hope that the PRC, which is rapidly growing a modern middle-class (unlike the soviet union, which never had one), will see it our way: there's simply too much to lose. I.E. we'd like to keep buying their cheap junk while their middle class takes a great leap forward into the 21st century.
Every item, except for one, that I received this Christmas was made in China. This included software, clothes, baby toys, slippers, a Black and Decker tool, an RC flight simulator, and baby books.
I spoke to an inventor friend about the problem this week and she explained that the labor cost are not the issue. The issue is service. She has a product that she is developing and she was not even able to get American companies to take her seriously and return her calls. Those that called her back treated her like a leper and wanted at least $40,000 up front (and up to $60,000) for "development costs."
So, she went to China. The Chinese company she is working with is fronting all of the costs, provide great service, helping with the technical development, providing free engineering, and it is moving her product to market a light speed.
Not only can't America make stuff inexpensively, according to her, the R & D customer service here stinks. America is not so much in decline in the global economy, it is just becoming irrelevant. _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
Joined: 13 May 2004 Posts: 964 Location: Federal Hill, Baltimore, MD
Posted: Fri Dec 29, 2006 03:04 pm Post subject:
Here's a little tidbit from today's Washington Post that's on-topic.
Quote:
UNITED ARAB EMIRATES
Bank Plans to Sell Dollars, Buy Euros
The UAE plans to convert 8 percent of its foreign exchange reserves from U.S. dollars to euros, the central bank governor said. The nation's $25 billion in reserves are now 98 percent dollars. That percentage will drop to 90 percent in six to nine months if the bank's directors approve the switch. The sale is a sign that central banks elsewhere may look to cut their losses from the dollar.
Re: "She has a product that she is developing and she was not even able to get American companies to take her seriously and return her calls."
Wasn't this the case for the VCR? Video recording technology was pioneered in the U.S. but American companies couldn't see viable consumer applications so the japanese ran away with it. We've seen the same phenomenon in other industries. Ford is currently cozying up to Toyota and one of the stated purposes is to gain access to some of toyota's fuel economy tech. But one of the reasons for the japanese lead in this area is that U.S. automakers were too concerned with short-term profitability and weren't willing to make certain long-range investments. General Motors at one point had a car that was nearly ready to go, the GM impact, but abruptly decided to cancel the project (see link below for GM Impact)
Re: "So, she went to China. The Chinese company she is working with is fronting all of the costs, provide great service, helping with the technical development, providing free engineering, and it is moving her product to market a light speed."
I have a friend whose company has facilities in China. This is what he tells me. Working with the chinese is fantastic. They perform "to demand" and have a great amount of difficulty using the word "no" when asked if project tasks can be completed by a certain date (personally, though that may be true, my own experience with American brand electronics that have been manufactured in China tells me that their quality standards are for crap---chinese electronics tend to have a very high failure rate, much more so than japanese, dutch, and american products).
Every public company in this country 'must' live quarter to quarter and show a profit that either equals the projections of the 'market' or the analysts for the dollar amount. Miss the mark and the stock publicly held drops. If it drops enough senior management gets terminated, stock holders lose projected gains. Remember that in days past the big stock holders in companies were the founders and their heirs. Now the big movers are investment bankers and mutual funds who manage money for others.
When a company is privately held it is the private holders who determine how the company is run. When a company is publicly held the 'managers' of the company are only employees. To get the bonuses and options they work short term.
Times have changed. _________________ Philip A. Robinson
Office of Joanne S. Shulman
SS Claim Development Specialists
150 Cochituate Road
Framingham, MA 01701
508 872 6600
Perhaps this is relevant to David's initia posting:
Quote:
During the course of 2006, the euro gained 11.4 percent against the dollar, 12.0 percent against the yen and 2.7 percent against the Swiss franc.
Analysts believe the principal driver of the foreign exchange market last year had been differences in interest rates across economic zones.
Interest rates in the US have been held steady since last August at 5.25 percent, giving momentum to the European currency in recent months, while recent data in Japan has dampened expectations of another rate hike there.
If this article is correct, then the fact that our domestic interest rates are stable is a primary factor in the rise of the euro against the dollar. Since lower interest rates are generally presumed to create a favorable arena for job creation and economic growth, then perhaps the low exchange rate is not all that bad. Of course, economics is no science, and no two eonomists will ever agree as to the meaning of the same data. Sounds like consulting psychologists.
When looking at the interest rates, it would be wise to take a look at is the biggest lender to the U.S. and the driving force for the low interest rate.
China. _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
Joined: 13 May 2004 Posts: 964 Location: Federal Hill, Baltimore, MD
Posted: Wed Jan 03, 2007 05:00 pm Post subject:
"Red China," now there's a blast from the past. The political system may still be "red," but the economic system seems barely pink. Indeed, it's the US Federal deficit that's the most deeply in the "red." Oh, but we shouldn't worry, George Bush just said he's submitting a plan to balance the budget in 2012...a mere four years after he has left office. The pain, the searing pain...
Joined: 17 May 2004 Posts: 1648 Location: Michigan
Posted: Wed Jan 03, 2007 08:09 pm Post subject:
I said red for fun.
BTW my 32 Y/O son is on a new kick and he is attempting to buy as little as possible from China. His new thing indeed. He was happy to find a set of "China" made in the USA. However - it is hard to find a "look pretty" not made in China - indeed he was getting aggravating at our Christmas party looking at the bottom of everything he and his wife got for place of manufacture.
If they make our trinkets - that is OK however I will stand up and take notice when they make our cars.
Oops
Quote:
DETROIT (MarketWatch) -- DaimlerChrysler AG's (DCX) Chrysler Group said Friday it has signed a letter of intent with China's Chery Automobile Co. that will allow the auto maker to build small cars in China to be sold throughout the world, including the U.S.
Joined: 13 May 2004 Posts: 964 Location: Federal Hill, Baltimore, MD
Posted: Thu Jan 04, 2007 09:49 pm Post subject:
I'm a tad dubious about a Chinese mini-car. I'm still waiting for DAIMLER-Chrysler to import its own mini-car, the Smart. Saw them in Europe years ago and have been dying to get one over here. For that matter, DAIMLER-Chrysler could import their Mercedes-Benz A class car here--that would be a step in the right direction. Why they need the Chinese to do what they are doing very well in Europe, I do not quite understand.
A Chinese official mentioned today that China is looking into moving away from dollars and into the Euro. Bad new for us. That is, China suggested today that they are going to flush the toilet on the dollar soon. China now holds notes on 50 percent of our national debt, which is at an all time record high due to the Republican strategy of spending like drunken sailors for the past seven years. While it may be that China will not flush the toilet on the United States because their dollars would devalue as well, they might do it just for shits and giggles and to take out the competition. . Nothing else is stopping them, especially not our goofy conservative administration.
Quote:
Bloomberg.com: Europe
The dollar dropped to the lowest against a basket of six major currencies yesterday after Chinese officials signaled plans to diversify the nation's $1.43 trillion of foreign exchange reserves. . . .
Conservatives cannot be trusted to manage the American economy, it may be too late to fix the damage. _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
Joined: 13 May 2004 Posts: 964 Location: Federal Hill, Baltimore, MD
Posted: Fri Nov 09, 2007 02:16 pm Post subject:
Yes, I sure have. At first, I was watching for mostly selfish reasons--i.e., the cost of the next trip over kept going up and up. But now, as you note, the threat to our economy makes my selfish concerns seem trivial. 14 and half months to go...but who's counting?
If it is the economy, GOP may be in trouble - Los Angeles Times
WASHINGTON -- Republican strategists are beginning to fear that a deteriorating economy will pose serious obstacles for their party's presidential candidates, who may ultimately have to answer for rising gas prices and a slumping housing market.
For most of the year, the campaign has been dominated by dueling positions on the war in Iraq, national security, immigration and healthcare. But with gas prices topping $3 a gallon and home foreclosures a deepening concern, the struggling economy could trump other issues in next year's general election campaign. . . .
Sept. 7 (Bloomberg) -- The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said.
UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report.
China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. China, the world’s largest holder of dollar reserves, said a supranational currency such as the International Monetary Fund’s special drawing rights, or SDRs, may add stability
Letting conservatives run an economic system is like trusting cats to look after the best interests of their pet mice. They may have broken the world economic system so badly that it is beyond repair. I this emerging idea of creating an economic system that protects the poor first. It reminds me of the Sermon on the Mount. I suspect Jesus knew something about reality that conservatives cannot grasp. Greed does not work.
What to watch for in the next three years? The IMF moves off the dollar, expect a generalized economic collapse of the USA similar to that in Russia after the end of the USSR. The world will move on, we will become a "second world" country, thanks to prior and irreversible conservative foolishness. _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
As a person who has rarely earned substantial amounts of income, I have always had a tendency to do better when the economy is “down’ – as my income tends to go much further at those times.
It’s kind of ironic that when those toward the middle of the food chain start struggling to be able to afford things those of us closer to the bottom of the food chain magically seem to have more purchasing power.
But collapse is significantly worse than “down.” My own personal economic world has collapsed several times. But I have never experienced a huge collapse on the larger level. It doesn’t sound very pretty.
This guy has some interesting ideas on the subject. I’m not certain what I think – (or perhaps I actually just think many things that are uncertain). But I found his site to be interesting.
I'm not sure the current economic situation can be blamed entirely on conservatives in government, although they have played a substantial role in exacerbating the problem. All of the many Americans who irrationally believe that anything associated with socialism is wrong, the large portion of the Democratic Party that refused to do anything about it even when they were capable, the executives who put "beating Wall Street estimates" as a priority so that their corporations' stock prices would continue to rise rather than long-term stability, the media that glorified financial irresponsibility - all of these people contributed to the disaster.
Speaking of the Soviet Union's collapse, we could have potentially realized a substantial gain by redirecting the funding for military expenditures used to compete with them to other areas of the economy when that occured. Even with Democratic control over Congress and the Presidency after the 1992 elections this didn't happen. The current US military budget is the highest in the world, significantly greater than the #2 nation China, and disproportionate in terms of percentage of GDP compared to other nations and the expensive wars supported by both Democrats and Republicans have only made this worse. The irony is that we'd be safer if we spent some of this money on achieving energy independence.
. . . the large portion of the Democratic Party that refused to do anything about it even when they were capable,
Who, when?
Republicans controlled both houses of Congress from 1996 to 2006. They had the Presidency from 2000 - 2008.
The Democrats on the House Finance Committee, especially Representative Barney Frank fought relentlessly to put fiscal controls back into the banking system and he was shot down 100% of the time all the way to the end of the Bush Presidency, when it was too late. During that entire the Republicans relentlessly, stupidly, and greedily dismantled regulation throughout the entire financial system, which led to the now-infamous crash.
So, who, when? _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
. . . the large portion of the Democratic Party that refused to do anything about it even when they were capable,
Who, when?
Republicans controlled both houses of Congress from 1996 to 2006. They had the Presidency from 2000 - 2008.
The Democrats on the House Finance Committee, especially Representative Barney Frank fought relentlessly to put fiscal controls back into the banking system and he was shot down 100% of the time all the way to the end of the Bush Presidency, when it was too late. During that entire the Republicans relentlessly, stupidly, and greedily dismantled regulation throughout the entire financial system, which led to the now-infamous crash.
So, who, when?
The Republicans had both the Presidency and Congress for part of 2001 and 2003-2007. However, it's pretty well known that deregulation of the financial industry has been going on for decades. President Obama has pointed to the Gramm-Leach-Bliley Act passed in 1999 with wide support from both parties as a contributing factor to the current economic crisis. Similarly, there was the Garn-St. Germain Act in 1982, which exacerbated the S&L Crisis.
Although I think he generally has done a good job overall, Barney Frank was actually opposed to regulation over Fannie Mae and Freddie Mac in 2003 when it was acknowledged that these organizations had poor risk management and could face financial trouble, as reported in the New York Times:
Quote:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
And of course, the minority party isn't completely helpless to counter anything. Look at how many problems Republicans are causing now with almost every Democratic initiative despite the fact that the Dems have huge majorities in both houses.
Beyond the direct issue of the banking industry, the Democratic Party has frequently supported war even when doing so costs the country greatly with little benefit, for example, roughly half of Congressional Democrats voted to authorize the Iraq war, which unfortunately has been a huge waste of money, loading up our national debt further, and which Americans overwhelmingly oppose.
So while I agree that Republican policies have been devastating on the economy, I'm disappointed with the Democrats whenever they are complicit with these policies.
Joined: 17 May 2004 Posts: 1648 Location: Michigan
Posted: Fri Sep 18, 2009 04:05 am Post subject:
Sub Prime - remember all the advertisements about 0 down and adjustable rates that could balloon but if they do you just sell and move up - but many got under water because the cards came tumbling down.
"So five years ago, there was one of those rare moments in Washington when the branches and personalities of government—in this case, the Bush administration—are less interested in protecting or expanding their turf than in fixing a looming catastrophe. What was Frank's response to the proposal?
"These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." "
I suppose there are flexible facts?
But I remember that quote when I heard the advertisements at the time - I took a 30 year mortgage in 2001 and damn glad I did. A house is a HOME and place to live and should not be treated wholly as an investment IMHO.
The full context of the article shows that the measure lacked support from Republicans. In the minority, Representative Frank and Melvin Watt did not constitute the large portion of Democrats to whom the prior poster referred, nor were those two capable of getting the measure passed which Republicans opposed. Remember, at that time, the Republicans controlled both houses of Congress and the Presidency. According to the New York Times, it was the Republicans, responding to lobbyists, who killed the measure, not Representative Frank.
kirakira wrote:
. . . the large portion of the Democratic Party that refused to do anything about it even when they were capable,
But good fact finding Olan!
Quote:
''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.
Indeed, a little searching shows that a Democrat introduced the bill to create the desired oversight. That is, the bill by "Senator John Corzine (D-NJ) (S.1656) never made it out of the 21-member (10D/11R) Senate Banking, Housing, and Urban Affairs Committee."
Quote:
In 2003, the Bush Administration sought to create a new agency, replacing the Office of Federal Housing Enterprise Oversight, to oversee Fannie Mae and Freddie Mac. In 1992 in the wake of the Savings and Loan crisis, and over concern similar lending problems would develop, the Office of Federal Housing Enterprise Oversight was created as part of the Department of Housing and Urban Development.[16] While Senate and House leaders voiced their intention to bring about the needed legislation, no reform bills materialized. A Senate reform bill introduced by Senator John Corzine (D-NJ) (S.1656) never made it out of the 21-member (10D/11R) Senate Banking, Housing, and Urban Affairs Committee.[17]. At the time members of the 108th congress expressed faith in the solvency of Fannie and Freddie. Congressman Barney Frank (D-MA), for example, described them as "not facing any kind of financial crisis." [18]
In the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
The Americans, who are aware the meetings have taken place - although they have not discovered the details - are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."
The dollar, the punching bag of global currencies, took another pounding in Asian currency markets today. It is not, as Vladimir Putin would have it, a sign of American eclipse. But don't be afraid to take a hint, either. If all your money is in investments tied to the dollar, let this be your motivation to start getting a little cosmopolitan.
From an American point of view, the mugging of the buck has been the dark side of the global recovery. One reason for the dollar's weakness is that the rebound is shaping up to be weaker in the U.S. than in other economies, especially those in Asia and those tied to commodity exports, like Canada and Australia. This morning, for example, we learned that half a million U.S. workers filed for unemployment last week. Yesterday, we clocked the seventh consecutive month of shrinking consumer debt (that means American consumers are not buying; and if we're not buying, we're not recovering). Australia, by contrast, added 40,600 new jobs and the Aussie central bank is raising interest rates out of concern that housing prices are rising too fast. (Wouldn't you love to have that problem again?!)
Just to put it in perspective, an Aussie dollar cost 60 cents back in November. Now it fetches 89 cents, a more than 30% climb against the greenback.
The strong consensus right now is that the dollar's skid will continue. But who knows? As Conrad de Aenlle argues in his MoneyWatch.com column, Against the Grain, the near universal pessimism may be reason to expect the opposite in the short run. He's right: I wouldn't place any big bets against the dollar right now. Markets are great at confounding the majority opinion.
Joined: 13 May 2004 Posts: 964 Location: Federal Hill, Baltimore, MD
Posted: Tue Nov 24, 2009 01:59 am Post subject:
Someone needs to develop what is probably a fairly straight-forward, simple program to help me figure out whether my stock market holdings are rising faster than the dollar is falling. I'm having a tough time figuring out whether I'm gaining or losing. I suspect, for the long run especially, the answer is losing. And when I put aside my selfish personal fixation and think about my kids...well, I'm darned sure the answer is losing. It's not a good thing.
If you are sitting at a poker table looking around trying to figure out who the mark is, it's you.
(Me too!)
Anyway. When Bush II (The Walking Disaster) took control of the monetary policy, his handlers engaged in policies that systematically trashed the dollar and the value of everything in the United States. In a sense, his handlers looted the entire Country. Since that moment you have lost value in everything you own. Thus, the answer is that you continue to lose value in every dimension in every second. It is possible that it will turn around if China revalues its currency. Don't count on it.
Oh, the exceptions are gold and lead. if you have gold, get rid of it NOW. That bubble is about to pop. (Follow my totally uninformed advice at your own risk, but please note I did start this thread in 2006.) _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
Joined: 13 May 2004 Posts: 964 Location: Federal Hill, Baltimore, MD
Posted: Fri Feb 26, 2010 04:48 pm Post subject:
Might be wise to worry about both. Obviously there is less we can do about the Euro and Greece's problems than we can do about our long-term debt problem. After watching some of the Health Care summit yesterday, however, I'm not remotely confident that this Congress or perhaps any Congress can deal with difficult, complex issues.
BEIJING: Rejecting the American demand for letting its currency yuan rise against the dollar, China today expressed apprehension over the safety of USD 770 billion US treasury bonds, a development that could see the foreign exchange markets across the world going topsy-turvy.
Asserting yuan is stable, Chinese Premier Wen Jiabo said, "A country's exchange rate policy and its exchange rates should depend on its national economy and economic situation."
"I don't think the yuan exchange rate is undervalued," he said while meeting the press after the annual Parliament session. He further added that steps would be taken to keep its currency stable.
On USD 770-billion treasury bonds being held by Beijing, the Chinese Premier for the second time in two years expressed serious concern over the safety and security of the US bonds saying that fluctuations in the US currency is a big worry for Beijing.
China asserts yuan stable;worried about of $770 bn US bonds- Forex-Markets-The Economic Times, http://economictimes.indiatimes.com/articleshow/5682822.cms (last visited Mar. 14, 2010). _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
NEW YORK (Dow Jones)--Investors retreated from stocks and commodities markets Thursday and headed for the safety of the U.S. dollar as Greece's debt problems took another turn for the worse.
Greece's deficit last year exceeded the government's own estimate, and could be revised even higher, according to Eurostat, the European Union's statistical agency. Eurostat estimates that Greece's deficit totaled 13.6% of gross domestic product last year, compared with the government's figure of 12.7% of GDP--though it also said the deficit could rise as high as 14.1% depending on how certain items are accounted for.
This looks like good news after a lot of hard negotiating and pressure from President Obama.
Quote:
BOSTON, June 21 (Reuters) - Looking at Wall Street's initial surge on Monday, you could easily conclude China's lifting of the peg that had kept its currency in lockstep with the dollar for the past two years was an unmitigated boon for corporate America.
If you did, you would be overlooking some important risks, analysts and investors warned.
Beijing's move to allow the yuan to rise against the dollar is good news for miners and other companies that supply the commodities and equipment that the world's third largest-economy needs to fuel its growth, by making U.S.-made equipment comparatively cheaper in China and making Chinese-made goods more expensive in the United States. . . .
UPDATE 1-Corporate America has reason to be wary on yuan | Reuters http://www.reuters.com/article/idUSN2126998720100621 (last visited Mon Jun 21 2010 20:06:37 GMT-0500 (CST)) _________________ David Traver
Attorney
Traver & Traver, S.C.
P.O. Box 459
Eagle, WI 53119
262-594-2096 (work)
403[at]traverlaw.com
You can post new topics in this forum You can reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
Traverlaw, Traver Law, Traver Law Offices, S.C., Traver & Traver, S.C.,
Traverlaw.com, SSAConnect,
Attorneys for the disabled and disadvantaged in all areas of Social Security
disability law, http://traverlaw.com,
http://ssaconnect.com, Connect, SSA Connect, Think Bigger,
Social Security Advice Connect, Social Security Disability Advice Connect,
"Social Security Disability Advocacy, Debate, and Professional News,"
the yellow and orange swoosh image, and the square favicon.ico image,
are trademarks and service marks of Attorney David F. Traver.
For information the about use of our copyrighted and trademarked material please call
262-594-2096.
CONNECT
FAQ
Search
Register
Log in
