more bad news for the dollar

[bishop]

Quote by: Pooeypants Our interest rates had to be pumped up to that % inorder to slow down this insane price increase, not sure if it's actually working though.

from what i just read, it's slowing but still growing - plateauing.. pretty much the same deal here.

[asterix404]

This whole thing is very very interesting. Where I live in New Jersey there is a heuge MASSIVE housing bubble that I really hope doesn't burst just yet. Just as an interesting question since you all seem to be in the "know" what are tax cuts supose to do... and since all of these problems exist why is the prez letting the $1.2 trillion tax cuts stick? I mean... I really hope I Am not that wrong but the budget is around 3 trillion... we are in debt up to our asses... and we are cutting money from people who made billions off of the whole reason we are in debt up to our asses? As far as the import gap is going, I have to see both sides to it and both suck. If you produce high tech stuff in the US you will pay top dollar for people to make it, from what I have heard, less then what it would cost to import. Not only that if you make it all here somewhere along the line you will have to deal with unions, and I love unions and so far the only way busnesses have gotton around them is to leave. If a company stays, they must pay a decent wage for a product thus driving up the price. A lot of people belave that golbolism is a good thing, except when it isn't, and that when you have the worlds economy linked. The thing is the US dollar I don't bealve will ever crash like what people have been saying. The reason is simple, we import. We buy... if the dollar is worthless we can on longer buy. Thus that would put a serious dent into countries like China Japan and the EU (which I know isn't a country). Now I would love to know a solution since this is rather nerve racking. If we stop buying oil from OPEC and devalue it so much, would that hurt the US at all? What would happen if congress passed into law that every american had to buy a fule efficant car > 30-40 MPG or get an electric.... would that hurt the US? Personally this is looking a lot like what I have studied in the 70's. Cars are getting 12-15 MPG, and gass is only going up. Americans don't care, thus gass keeps going up as OPEC does it's thing getting as money as possable. See I don't beleave that the world exonomy is based on Euros or Dollars, I beleave it is based in Oil. I hate it but think about it, and I could be totally wrong but here is my theroy: Americans hate public transportation so we built malls in the middle of no ware with only high way access all over the country. If oil gets too expensive people will not drive. If people will not drive people will not spend, now that may be a very good thing however really hurt the ecnomony, I think I am right... am I so far? If people can not drive and spend no debt will be produced. Credit cards companies will be hit hard and then it's all down hill from there. Is this a fair estimate? I mean hell I am a CS and physics undergrad who just reads the papper...

[bishop]

Just as an interesting question since you all seem to be in the "know" what are tax cuts supose to do... and since all of these problems exist why is the prez letting the $1.2 trillion tax cuts stick?

this is the biggest lie of them all.. from a macro perspective, these "tax cuts" aren't even tax cuts. by definition, you need to decrease spending to afford a tax cut. basically, what everyone's getting is an extended line of credit. this year's deficit will likely set yet another record, so you can see just how much bush is trying to stretch our credit.

congress just increased the limit to how much debt the country can swim in:

http://www.boston.com/news/nation/wa..._818_trillion/

WASHINGTON -- A divided Senate approved an $800 billion increase in the federal debt limit yesterday, a major boost in borrowing that Senator John Kerry and other Democrats blamed on the fiscal policies of President Bush. The 52-44 vote, mostly along party lines, was expected to be followed by House passage today. Enactment would raise the government's borrowing limit to $8.18 trillion -- more than eight times the total federal debt that existed when President Reagan took office in 1981.

that's about 80% of gdp!!!

The reason is simple, we import. We buy... if the dollar is worthless we can on longer buy. Thus that would put a serious dent into countries like China Japan and the EU (which I know isn't a country).

consumption in china is growing faster than it is here. it's also growing fast in many other countries, like india and those in east europe. plus, with this recent 'recovery' that we're in, our country had little to do with it - it was almost entirely driven off of china's growth. the more foreign countries begin to consume more (raising their standard of living), the less they'll depend on the american consumer for their growth.

they say, never say never...

[Rainbow]

Quote by: bishop rainbow, you seem to be learning this here for the first time, so i'll try to explain it better for you and give you a view of the present... despite our intervention in iraq, countries all over the world are beginning to convert their reserves to euros. i mentioned all of this in the previous posts, that i guess you couldn't digest. it would seem that your solution is to go to war against every oil producing country that begins to price oil in euros, right? do you realize how stupid of a "solution" that is? you can engage in nation building and install friendly regimes, but nothing lasts forever in the big picture. and artificial creations through force are always more likely to fail than the opposite. not to mention that fighting all these wars is bankrupting the country. well, we're already bankrupt, so this just deepens the hole. has a war in iraq done anything for the dollar? nope. plus, every hint of new intervention/war sends the dollar even further down. all of this weakens global demand for the dollar, as my link from bloomberg already stated. perhaps you should read the information that's already been provided and THINK. the real answer imo, is to just balance the god damn budget and to stop acting like the global hegemon that we are.

Off Topic
Thank you for the yet another fascinating lecture, along with marvelous conclusions, bishop.
(I think you had better keep your personal impressions to yourself, because I am capable of returning the same *** back to you, as well as many others can equally procede with it. Should not we respect others, instead of producing animosity ? Post the arguments, instead. Thank you.)

On Topic
I have posted numerous times the reasons U.S. has entered Iraq. If you still keep denying facts, that is your choice. There is not much I can help you with.
Your links to "Bloomberg"s site brought not much but a simple data, without any explanations and/or determinations that can be undertaken as a (re)solution to strenghten U.S. dollar up.

Off Topic
Politics has not much in common with pacifism. Almost nothing, and as a matter of fact both stand in drastic opposition. Reading your posts and replies, it makes a person to think that you would "love" to U.S. to lose in Iraq, because it does not match and comply with your own assumptions, bases for your own political and social orientations and/or agendas you may be affiliated with (somehow).
For your information :
- if U.S. loses in Iraq, you will be hit as well, and the next generations to come
What is so "funny" in it ?
You put your own views, opinions, determinations, ect. over the case itself.
The case is the U.S. future, and not your private view or agenda you may endorse.

In politics, tomorrow does not necessarily means the next day. It takes time for results, especially in economics. What is so hard to understand it ?
If you think the way : "today I seed, and tomorrow I harvest", then I am not surpsrised you have problems with understanding politics, because it does not work that way, except in books or fairy-tales, but not in politics definitely.

On Topic
Read the link I posted, and try to get a view on what really goes on around the world.

[bishop]

*sigh*

i remember a while ago asking you to explain how success in iraq will cause the dollar's value to rise. your link, which is not news to me (and which provides a theory that i view as credible) does not answer my question. now, you can repeat yourself as if i don't know what you're talking about, or you can just get back into the discussion and answer the question that i initially asked you. remember: the one where you went off talking about visas with poland.

the idea pushed by your fascinating link is OLD.. about 2-3 years old in fact. but as always, thanks for.....

Your links to "Bloomberg"s site brought not much but a simple data, without any explanations and/or determinations that can be undertaken as a (re)solution to strenghten U.S. dollar up.

heh, another obvious one that you couldn't understand.. the bloomberg link showed the declining demand for the dollar, and the fact that that drop (if it falls just $3 billion/month more) will begin to bolster inflation.

how do you strengthen the dollar? one great step, brace yourself for this novell idea, is to BALANCE THE BUDGET!!!

[Rainbow]

Quote by: bishop *sigh* i remember a while ago asking you to explain how success in iraq will cause the dollar's value to rise. your link, which is not news to me (and which provides a theory that i view as credible) does not answer my question. now, you can repeat yourself as if i don't know what you're talking about, or you can just get back into the discussion and answer the question that i initially asked you. remember: the one where you went off talking about visas with poland. the idea pushed by your fascinating link is OLD.. about 2-3 years old in fact. but as always, thanks for..... heh, another obvious one that you couldn't understand.. the bloomberg link showed the declining demand for the dollar, and the fact that that drop (if it falls just $3 billion/month more) will begin to bolster inflation. how do you strengthen the dollar? one great step, brace yourself for this novell idea, is to BALANCE THE BUDGET!!!

The link I posted has its precise date. Try to find and read it, at least, instead of posting ***
I do not need to go to "Bloomberg"s site to get the same or similar data on currecny or standings, while that site does not provide people with solutions, in the particular case you posted the link to.

What you call an "old idea" is the reality. That is your choice whether you accept it or not.
Regardless of your choice, you can not change it, since Mankind has developed the currency long time ago and keep continue to take it as the fundament for its existance, progress, wealth, prosperity, ect.
Possible "solutions" :
- replace Mankind.
- replace currency for another value
Both would lead to the same or similar outcomes, since Mankind has the ability to accomodate itself into (almost) any environement and adopt any values as long as it serve its demands, requests, ect.

Off Topic
Once again :
- keep your private views and opinions on my alleged personallity to yourself, family, "friends", relatives, ect.
- number of posts does not grant you the rights or licence your offensive posts addressed and directed to members in order to diminish and/or discredit others' views, opinions, arguments, ect.
This particular "Volcanvo"s forum does not serve that purpose.
Thank you.

[Samildanach]

You have obviously lost it and gone right off topic Rainbow, Bishops argument are completely valid as far as I can judge within this forum. As for personal message well obviously I can't comment on any peronal dialougwe you two have had.

[bishop]

i feel silly for wasting my time with this, but i'm just hoping to lend rainbow a hand...

rainbow, this currency war argument is not new, just like i said before. you want an example? here ya go, from the london business school from 1998.. http://faculty.london.edu/rportes/re...ortesReyEP.pdf

i've found other sources specifically applying the ideas in that paper to the iraq war that predate the one you linked.. but like i said, i've known about this theory for about 2 years now. plus i said that i'm inclinded to believe it - did you hear me? i said i think it could very well be true!

and for the record, i can't find where i commented on your alleged personality here. i have given you forceful replies though, i won't deny that. but you should realize that that's because you chose to ignore my initial question, then go off on a walkabout, talking about visas and poland, then the meaning of life, etc.. i've posted a lot of information here that you've summarily ignored. you want to debate? get with the program and refute my arguments.

[Rainbow]

Quote by: Samildanach You have obviously lost it and gone right off topic Rainbow, Bishops argument are completely valid as far as I can judge within this forum.

My replies (to [i]bishop[/] ) concern the information he posted based upon the link he submitted himself. This particular link to the "Bloomberg"s site, provide no answer as a solution. That is what I polemize on/about.

Whatever I try to say - with concern to U.S. doallar, is :
- markets
Since you have markets that are profitable for you, then you rule.
Iraq has oil that will deliver funds for any enterprise, along with strengthening U.S. dollar up. That market is completely empty (!). Try to imagine the outcomes, with all the influence on neighbouring countries. U.S. can potentially fill and rule that market within that whole region.

What does it mean ?
You have progress in both :
- U.S. dollar
- U.S. economy
The remaining factors :
- U.S. military
- U.S. intelligence
You have the whole view what is going on in Middle-East region, especially in Iraq.
However, it is not going to materialize itself over the night. It takes time.

[Rainbow]

Quote by: bishop i feel silly for wasting my time with this, but i'm just hoping to lend rainbow a hand... rainbow, this currency war argument is not new, just like i said before. you want an example? here ya go, from the london business school from 1998.. http://faculty.london.edu/rportes/re...ortesReyEP.pdf i've found other sources specifically applying the ideas in that paper to the iraq war that predate the one you linked.. but like i said, i've known about this theory for about 2 years now. plus i said that i'm inclinded to believe it - did you hear me? i said i think it could very well be true! and for the record, i can't find where i commented on your alleged personality here. i have given you forceful replies though, i won't deny that. but you should realize that that's because you chose to ignore my initial question, then go off on a walkabout, talking about visas and poland, then the meaning of life, etc.. i've posted a lot of information here that you've summarily ignored. you want to debate? get with the program and refute my arguments.

#4
Forget it. The most important that we can go ahead :-)))

As an explanation my post on visas for Poles was an example, for future relation U.S. is building right now, in countries that may be influenced by "euro", what potentially will weaken U.S. dollar. It concerns almost all post-communists states.

#1, #2, #3
Since Saddam started to make deals on oil with France and Germany while paying in "euro", that was the critical point for U.S.
"Enron" was about to make a research for solutions, but it ended up very badly. There was something within or between "Enron" and U.S. governement. What caused that or went wrong ? I have no clue.
Generally, since "Enron" failed there was not much as a solution. Additionally, 09-11-2001 events added up even more fuel to U.S. policy, economy and currency.
There is no turning point. U.S. either succeeds, or we may end up pretty badly.
The matter is not who is the U.S. President, but U.S. economy itself.

[bishop]

As an explanation my post on visas for Poles was an example, for future relation U.S. is building right now, in countries that may be influenced by "euro", what potentially will weaken U.S. dollar. It concerns almost all post-communists states.

heh, it's a little bigger than being influenced by the euro.. the poles are adopting the euro!

Since Saddam started to make deals on oil with France and Germany while paying in "euro", that was the critical point for U.S.

and like i've shown (links that you probably ignored), russia, china, various opec countries (including saudi arabia and especially venezuela) are moving to the euro. maybe we can just conquer the entire world, eh? hell, even the japanese are beginning to talk about shifting some of their reserves into euros. and, i've shown that these countries are already converting dollars to euros - supported by the bloomberg link showing decreased demand for dollars. this trend cannot be solved by fixing the mess in iraq. it's a concerted effort on the part of all these other countries to pressure the hegemon into ending its interventionist (and imperialist) policies.

it is for this reason, as well as our massive deficits that countries are converting to the euro. so, that is why my rational argument for a solution is to balance the budget and end the imperialism. you apparently think that we can subjugate the entire world, and that this will give our nation (and the dollar) long-term prosperity..


and it DOES matter who's the president. bush has given us trillions of new debt, not the man on the moon. unless you think that he's beyond accountability and reproach.. well... you did vote for him again, so i guess that answers that question.

[asterix404]

Just as a really fast point... my prof told me that the oil industry is a very low margin of profits, around 6.9%. (Third%20Quarter%202004%20Oil%20and%20Gas%20Profit%20Margins.pdf ) This being true, if we have spend 500 billion dollars we would need... 500/.07 billion dollars = 8 trillion dollars. So in order to make a profit on this war, the oil would have to bring us 8 trillion dollars, is this fair to say. This war can not be an investment on us oil rights. Hell given the tax bracket it would take so long, I mean unless there is a company that is dealing in the trillions which I don't think there is... so then if we don't get our money back from it, woudln't that drive the value of the dollar down becasue we are basicly taking out a loan that we will never ever be able to pay back?

[bishop]

it's not so much about the profitability of the business/war.. what matters most is that it's continuously being pumped and that it's priced in dollars. plus, we waste money like nobody's business and no single event has ever been responsible for devaluing the dollar - it's the cumulative effect of our deficit spending in general and geopolitics (i.e. countries purposely moving to the euro to weaken the hegemon).

[PatrickHenry]

Quote by: asterix404 This war can not be an investment on us oil rights.

You are correct that it isn't about the US consumer having a better deal on oil. It makes a lotta money for Bush's oily corporate buddies that put him in office though, huh? If you can command armies, what is to stop you from profiting personally while impoverishing the nation?

Did you think Washington, DC was actually your friend?!

[Rainbow]

Quote by: PatrickHenry You are correct that it isn't about the US consumer having a better deal on oil. It makes a lotta money for Bush's oily corporate buddies that put him in office though, huh? If you can command armies, what is to stop you from profiting personally while impoverishing the nation? Did you think Washington, DC was actually your friend?!

Do you suggest that Bush gave "go ahead" to enter Iraq, in order to fill his (and his buddies) pockets with billions of dollars ?

[bishop]

huge no-bid contracts were given out to key corporations immediately following our capture of baghdad.

you admit that money is at the heart of this war.. we won't know his intentions, but the facts are clear - he did give them billions of dollars.

[Rainbow]

Quote by: bishop you admit that money is at the heart of this war.. we won't know his intentions, but the facts are clear - he did give them billions of dollars.

It may indicate that your assumptions (on this issue) are correct, :-)))
(I made "zero" on that :-))) )

However, take a look at the Middle-East region.
This whole area is more-than worth to invest, while Iraq is "the heart" of such enterprise.
All the markets established and/or developed in that whole region bring U.S. profits, and all the transactions will be made in U.S. dollars, only (!), including the most "precious" gas and oil. It brings more than trillions, back. The time is a factor.
Just imagine, that you need to build up a state from the scratch. There is nothing in there.
Can you imagine that money ? especially with trades for oil or gas ? More over, almost all the surrounding states would become affected, that - most likely, with potential political changes wihin them - add "some extra" to your economy.
Markets - and markets, again, give people jobs. Iraq IS a free-and-empty market, not to mention the whole area around.

In case of U.S. dollar, many people talk about morality, ethics, ect.
Have you ever bothered to think about others, guys ?
France and Germany planned that move for a decade (at least), to break U.S. dollar. They were fully aware (from the begining) of the consequences on establishing "euro", in order to "dump" U.S. dollar. Those countries are being called "U.S.'s friends" :-)))
These "gentlemen" are extremely sensitive on issues like : morality, ethics, ect. :-)))
I do not know whether it was (the originally) F. Mitterand's idea, but J. Chirac's for sure, since he upheld and approved that enterprise. Who stands behind Chirac's back, in a shadow ?
Maybe Bush's "colleagues", that - somehow, got "upset" (over something), and want a "revenge" to pay Bush back, and care for nothing but to pay Bush as hard as they can ?
Frictions, between "good-old friends" ?
That is why France and Germany work hard to get and control markets in post-communists countries.
It is clear, that for a along time Chirac has been familliar on these plans to bring U.S. dollar on its knees. Why ? Money, only ? I do not think so.

[bishop]

you're getting further and further away from the topic, again.

All the markets established and/or developed in that whole region bring U.S. profits, and all the transactions will be made in U.S. dollars, only (!), including the most "precious" gas and oil. It brings more than trillions, back.

the profits are being realized by the companies, but they aren't being realized by americans in general. the labor market remains weaker than it should be - especially if bush's rosy picturure matched up with reality. and growing inflation is MUCH more important to the economy than any profits the couple companies in iraq are making. like i said before, consumer spending fuels 2/3 of the economy. higher inflation, especially that which grows faster than wages, will decrease consumer spending. corporate profits are almost meaningless against that issue. exxon made record profits during the recession, if i'm not mistaken, and the economy as a whole did not benefit whatsoever.

so, like i said before, success in iraq (this time with respect to profits made in iraq) will not do anything to help the dollar. and as it falls, inflation goes up and our standard of living is affected.

can you give a solution that will cause the dollar to appreciate?

[Sasha]

A lower US dollar isnt nessicarily as bad as you all seem to make it out to be. As the dollar falls it becomes cheaper for other nations to buy American products, hence you can sell more, improve your balance of trade, pay off some of your debt etc. As that happens the dollar will regain its value.

If you want to know why its falling, stop blaming the rest of the world and some global conspiracy. The US has been a net consumer for the last decade if not more, add a government deficit to that and it is a wonder it took so long for the dollar to fall.

As far as your concers of the Euro Russia and China, they are simply fear mongering. The Euro makes good sense for Europeans regardless of what the US does, A uniform currency eases trading between member nations, (with whome they trade the most) and is more stable as it has a wider base to support it. Russia should diversify its foreign money supplies, its like any investment, nobody in their right mind invests in only one company, same deal for Russia. Finally if your worried about China Buying your debt, well why did you get the debt in the first place, and if its such a security risk, dont sell it to them.


.....oups, sorry, I read the posts backwards

[bishop]

(did you read the preceding debate before making this post?)

yes, a devalued dollar makes our exports cheaper for foreigners to buy. the problem is that for americans, a devalued dollar makes foreign imports more expensive. that is inflation. and, consumption fuels 2/3 of our economy. what your post clearly overlooked is the incredible pain, and drop in standard of living, that america would experience while becoming an export-oriented economy, rather than a consumption-oriented economy.

there has been some decrease in the trade deficit, but the dollar has continued to fall - because of the fiscal irresponsibility of congress and bush. when you have a republican majority, many of whom have sworn on the bible that they will never raise taxes, our fiscal future looks like it will remain irresponsible.

as far as your last paragraph is concerned, the issue as i see it is that we've abused the dollar's position as the #1 reserve currency. we've borrowed (i.e. engaged in deficit spending) like a gluttonous fool, and we've readily imposed our agenda on the entire world. we've staked much of our economic security on the assumption that foreign countries will always choose to fill their reserves with dollars. up until recently, they didn't have a solid alternative to choose from, but now they do. there are reasons, both economic and geopolitical for why these countries are shifting some of their reserves into euros.