[Shinrei]

I know there are lots of (mostly) non-americans on here. What do you see happening in your neck of the woods as the dollar steadily weakens? Is this good, bad, or nothing changes?

Personally, I think that the dollar losing value is all just part of the enormous credit bubble that has been forming and growing impossibly big, and when it pops, it's going to effect most of the world's economies negatively. Sooner or later, Japan and China and the other dollar sinks aren't going to be able to lap up the slop from the Federal Reserve (that unconstitutional big rig for rich bankers) and America will see another Great Depression and the rest of the world will have their own problems resulting.

The dollar is only paper after all..........

[Cold Iron]

Resource war.

...oh wait...

Millions starving.

...oh wait...

More of the same.

[Hume]

Cold Iron;239778 said:

...oh wait...

More of the same.

+1

@ Original Poster

Have faith in the versatility of the capitalist economies.
Or, better put, faith in the versatile capitalist economies.

[MrXIII]

Hume;239784 said:

+1
Have faith in the versatility of the capitalist economies.
Or, better put, faith in the versatile capitalist economies.

Well put Hume.

While it might put a dent in other national economies, it's nothing they wont recover from the Euro-zone seems to be doing really well at the moment so I have no fear of a global recession (it will most likely happen in some markets though).

I wouldn't like to be an American right now especially if you planned on going to the uk for you holidays what is it right now $2 to £1. That said I'm not entirely happy being Scottish with the monkeys we have running the place here and down south, just don't trust these people to run our economy... but I don't trust goverments to run economies.

[Werthead]

MrXIII;239837 said:

That said I'm not entirely happy being Scottish with the monkeys we have running the place here and down south, just don't trust these people to run our economy... but I don't trust goverments to run economies.

Hmm. Would the banks running the economy (the only real alternative) be any better though?

[Shinrei]

The thing is, the current wealth of the world is unprecedented. When the great depression hit in the 30's, there wasn't the mass of credit and sheer dollar liquidity that there is now. If everything sinks it could be far worse than same old same old.

@hume - Can you be more specific? How is alleged versatility going to save the day? Historically speaking we have recessions and depressions all the time, and we're pretty much due. The difference in 2008 is, we have a build up of credit and money liquidity that is entirely unprecedented in years past.

Below is a small slice (yes only a small slice) of the problem. Note how non-US banks are accomplices as it were - sucking up the US Dollar debt. If your government and banks are heavily invested in dollars, and everything in the US tanks, it's going to affect your life too.

------------
"Now you know just a teensy, weensy part of the reason why the Fed is creating so much money and credit; they have to, just to pay the interest on the debt! All of which will turn into, I am sorry to say, inflation in prices."


--------------------------------------------------------------------------------

by The Mogambo Guru

Total Fed Credit, from whence comes the fabled "money from thin air", from whence comes inflation in the money supply, from whence soon comes inflation in consumer prices, from whence comes social distress and upheaval, was up another $2.5 billion last week, which is about average, if you are keeping score, which I do because it Freaks The Hell Out Of Me (FTHOOM) when I think of all the inflation in prices that will necessarily result.

This continual inflation-stoking idiocy was bad enough, even taking a prophylactic handful of whatever miscellaneous medications or alcoholic beverages (or both) were readily at hand before cautiously looking at that particular Total Fed Credit number.

The part that sent me screaming in fear and outrage this week was the mysterious catch-all category labeled "Other Federal Reserve Assets", which ballooned by $14.2 billion last week! $14.2 billion! And in other mysteries, the Fed's cache of "US Government Securities Owned Outright" surprisingly fell by $15 billion last week, too! Zounds! Big money is zipping around the place! Whew!

If you are like me, you are by now shoving random tranquilizers into your mouth with one hand and gripping a loaded handgun with the other, shaking in absolute fear and nervously asking yourself, "What, what, what in the hell is going on?"

Don't look to Ben Bernanke, chairman of the Federal Reserve, for answers, because that clueless, neo-Keynesian halfwit has no idea what in the hell he is doing, which I prove by noting that he is on record as saying on May 17 that "We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." Hahaha! How wrong can you be? We're freaking doomed!

And, more horrifyingly to everybody, foreign central banks are doing everything they can to "help" us, too, and bought up another huge freaking $8.5 billion load of in U.S. debt through the Federal Reserve last week, meaning that the government is now sending more of your taxpayer money out of the country into the pockets of foreign central banks, to the total terrifying tune of roughly more than two trillion dollars at this point, or more exactly, $2,156,411,000,000.00. I notice that the sheer horror of it actually seems enhanced by displaying all the numerals.

And this is just a part of it! Total national debt is already over $9 trillion, which looks like $9,120,000,000,000.00! Gaaahhhh!

Now you know just a teensy, weensy part of the reason why the Fed is creating so much money and credit; they have to, just to pay the interest on the debt! All of which will turn into, I am sorry to say, inflation in prices. Oh, I can see looks on your distrustful faces as you rudely disparage my facts, figures, intellect and musky body odors!

Fortunately, I am prepared for your antagonism; I merely quote Doug Noland from his Credit Bubble Bulletin, who said, "During the year 2007, it became clear that the Federal Reserve had lost control of inflationary forces. The year ended with Import Prices up 11.4% y-o-y, the Producer Price index up 7.2% y-o-y, and the Consumer Price index up 4.3% y-o-y. Despite a weakened economy and another year of dollar devaluation, the U.S. Current Account Deficit remained in the neighborhood of $800bn. Coupled with huge speculative outflows seeking profits from global inflation, the world was absolutely inundated with dollar liquidity."

[MrXIII]

Werthead;239877 said:

Hmm. Would the banks running the economy (the only real alternative) be any better though?

No you need a truely independent body... the problem is that hypothetically thats a great idea, practically who is truely unbiased when it comes to money? If we can't have that I'd settle for less goverment intervention, nothing but the bare minimum.

@shinrei

Yup America is pretty much doomed (too strong a word I feel, it's not apocalypitc or anything). Inflation is deadly to debt based economies, if that goes uncontrolled then... well the article said it well.

[Cold Iron]

Shinrei no Shintai;239934 said:

If everything sinks it could be far worse than same old same old.

I didn't mean same old same old, I meant more of the same, as in more resource wars and more people starving.

But in addition to that, I'm thinking that the fall from riches of the american led west has been long in arriving, and a great leveling of whites to a more comparable economic standing to other colours is inevitable, which seems to go some way towards an explanation for all the recklessness. Postpone it as long as possible right?

[paladin]

bernake and bush both need to stop bailing out the industry. helping out people not become homeless is acceptable, but just giving away billions to these corporations so they can continue investing in risky ventures isnt viable capitalism or viable use of taxpayer money. the economy is cyclical, you can't stop it, only prolong it and steepen the fall when it does com

[Lost Marine]

The dollar may fail, but we still have guns. We'll just rob some international banks... watch out Geneva here comes the Bush-Cheney gang.

[RodeoRanch]

On a purely personal scale, the Canadian dollar being on par and occasionally higher than the Yankee buck has made me quite happy. I've bought all sorts of books from Amazon.com for cheaper than I could get them in store or Amazon.ca

I've also snapped up a number of hard-to-find/pirate albums from iTunes on the cheap.


I'm ignorant of the larger global repercussion but it works well for me on the small scale.

[paladin]

on the flip side, i get hit harder when buying erikson novels since they arent out in the us on release

[Zelech]

Yup, a weaker dollar means others can/will buy more of our goods...and also brings in a lot of foreign investment.

Or, thats what Macroeconomics teaches, right?


And inflation is bad for debtors, but good for debtees who have to pay off the debt.

[Morgoth]

high inflation is generally bad no matter.. As far as I remember it from my economics classes, optimal inflation is around 2-3 %, it gets problematic at 5 and outright dangerous at 10. all things being equal and all that

[Folken]

RodeoRanch;240203 said:

On a purely personal scale, the Canadian dollar being on par and occasionally higher than the Yankee buck has made me quite happy. I've bought all sorts of books from Amazon.com for cheaper than I could get them in store or Amazon.ca

I've also snapped up a number of hard-to-find/pirate albums from iTunes on the cheap.


I'm ignorant of the larger global repercussion but it works well for me on the small scale.

Agreed I've gone crazy shopping from the US. Clothes, books, dvd's hell I was thinking of running a scam with a car lol but that was far too complicated. But Canadian businesses in general have been hit, a lot of the big name stores have been forced to cut prices because they realized they could no longer justify charging us 20-30% more for the same products with our dollar worth more because we'd simply just buy it from there.

[Shinrei]

Well Rodeo, that is a plus side. American stores have reported increased business from Canadian customers - people crossing the border to go to American shopping malls even.

Cold Iron....how in the world do you make this an issue of color? Do you think the 14% blacks 14% Hispanics and all the Asians etc. etc. in America won't be affected by this? Aside from the fatcats who made bad investments, the disadvantaged poor (an statistically speaking, lots of minorities in the US are poor), will suffer from this as well. Job loss, less purchasing power etc.

Also, do you consider Japan a "white" country? I find your statement ridiculous on so many fronts, I don't know where to begin....

[Cold Iron]

I'll admit to slightly asinine but ridiculous? How is it not an issue of colour? Because there are racial minorities in the US? Because one or two non-European nations have benefited by being near forced onto the band-wagon? Please. Accidents of technological advancement aside the white west has done more that I can see to disrupt the development of the rest of the world than assist it. It has been clear since the start of the cold war that there's only room (resources) for one at the top.

If you are wondering about the relevance to topic, see the last comment on my last post. I believe the reckless debt accumulation of the US is due to the fact that without it, China would already have more economic pull by now.

[Sir Thursday]

Shinrei no Shintai;239934 said:

The thing is, the current wealth of the world is unprecedented. When the great depression hit in the 30's, there wasn't the mass of credit and sheer dollar liquidity that there is now. If everything sinks it could be far worse than same old same old.

@hume - Can you be more specific? How is alleged versatility going to save the day? Historically speaking we have recessions and depressions all the time, and we're pretty much due. The difference in 2008 is, we have a build up of credit and money liquidity that is entirely unprecedented in years past.

Below is a small slice (yes only a small slice) of the problem. Note how non-US banks are accomplices as it were - sucking up the US Dollar debt. If your government and banks are heavily invested in dollars, and everything in the US tanks, it's going to affect your life too.

------------
"Now you know just a teensy, weensy part of the reason why the Fed is creating so much money and credit; they have to, just to pay the interest on the debt! All of which will turn into, I am sorry to say, inflation in prices."


--------------------------------------------------------------------------------

by The Mogambo Guru

Total Fed Credit, from whence comes the fabled "money from thin air", from whence comes inflation in the money supply, from whence soon comes inflation in consumer prices, from whence comes social distress and upheaval, was up another $2.5 billion last week, which is about average, if you are keeping score, which I do because it Freaks The Hell Out Of Me (FTHOOM) when I think of all the inflation in prices that will necessarily result.

This continual inflation-stoking idiocy was bad enough, even taking a prophylactic handful of whatever miscellaneous medications or alcoholic beverages (or both) were readily at hand before cautiously looking at that particular Total Fed Credit number.

The part that sent me screaming in fear and outrage this week was the mysterious catch-all category labeled "Other Federal Reserve Assets", which ballooned by $14.2 billion last week! $14.2 billion! And in other mysteries, the Fed's cache of "US Government Securities Owned Outright" surprisingly fell by $15 billion last week, too! Zounds! Big money is zipping around the place! Whew!

If you are like me, you are by now shoving random tranquilizers into your mouth with one hand and gripping a loaded handgun with the other, shaking in absolute fear and nervously asking yourself, "What, what, what in the hell is going on?"

Don't look to Ben Bernanke, chairman of the Federal Reserve, for answers, because that clueless, neo-Keynesian halfwit has no idea what in the hell he is doing, which I prove by noting that he is on record as saying on May 17 that "We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." Hahaha! How wrong can you be? We're freaking doomed!

And, more horrifyingly to everybody, foreign central banks are doing everything they can to "help" us, too, and bought up another huge freaking $8.5 billion load of in U.S. debt through the Federal Reserve last week, meaning that the government is now sending more of your taxpayer money out of the country into the pockets of foreign central banks, to the total terrifying tune of roughly more than two trillion dollars at this point, or more exactly, $2,156,411,000,000.00. I notice that the sheer horror of it actually seems enhanced by displaying all the numerals.

And this is just a part of it! Total national debt is already over $9 trillion, which looks like $9,120,000,000,000.00! Gaaahhhh!

Now you know just a teensy, weensy part of the reason why the Fed is creating so much money and credit; they have to, just to pay the interest on the debt! All of which will turn into, I am sorry to say, inflation in prices. Oh, I can see looks on your distrustful faces as you rudely disparage my facts, figures, intellect and musky body odors!

Fortunately, I am prepared for your antagonism; I merely quote Doug Noland from his Credit Bubble Bulletin, who said, "During the year 2007, it became clear that the Federal Reserve had lost control of inflationary forces. The year ended with Import Prices up 11.4% y-o-y, the Producer Price index up 7.2% y-o-y, and the Consumer Price index up 4.3% y-o-y. Despite a weakened economy and another year of dollar devaluation, the U.S. Current Account Deficit remained in the neighborhood of $800bn. Coupled with huge speculative outflows seeking profits from global inflation, the world was absolutely inundated with dollar liquidity."

I have to say I don't like this article at all. The primary rule of balanced and informative economic commentary, or so I was told in my economics classes, is NEVER USE RAW NUMBERS. They have shock value, but they don't actually mean anything unless you compare them to something else. So what if national debt is over $9 trillion? That doesn't really mean all that much unless you express it as a percentage of GDP or something.

Aside from that, the inflation statistics that the article quoted are slightly worrying, although the Consumer Price index being up 4.3% isn't too bad. It's understandable that import prices are up so much - after all, that's what a weak dollar will do to you (mind you, I guess it's a chicken and egg thing - increased inflation devalues the dollar causing increased import prices causing increased inflation).

There is a credit bubble, but to be honest I don't see any realistic way of altering the current state of affairs. In a free(ish) market economy you can't really stop people from spending - and to be honest stopping more credit from building up will crash the economy pretty badly anyhow (although perhaps not quite as much as the credit bubble bursting).



Sir Thursday

[Shinrei]

@ Cold Iron-
I think what had me scratching my head was the relevance of your answer to the questions I asked in my OP. What North American and European capitalism has done to the third world and developing nations is a whole big topic on its own, which wasn't really the topic I was trying to bring to discussion.

Also, it seems to imply that to be white means to be economically advantaged. Although the world developed in way that primarily white nations are "on top", I don't think it's because they are white! So to make the argument in terms of color also makes me scratch my head.

[Cold Iron]

Shinrei no Shintai;240681 said:

@ Cold Iron-
I think what had me scratching my head was the relevance of your answer to the questions I asked in my OP. What North American and European capitalism has done to the third world and developing nations is a whole big topic on its own, which wasn't really the topic I was trying to bring to discussion.

Yeah, understood, I was just taking it to it's logical conclusion ie end of western domination. We can go back and discuss the intermediate steps if you wish

Quote

Also, it seems to imply that to be white means to be economically advantaged. Although the world developed in way that primarily white nations are "on top", I don't think it's because they are white! So to make the argument in terms of color also makes me scratch my head.

If you mean I seemed to imply that whites are on top for genetic reasons, I assure you I did not. The relevance of colour is in the mindset of national "enemies". Before the cold war, technology was simply not shared with other nations outside your immediate, culturally and racially close allies. The careful guarding of technology became redundant with the spread of nukes, but what is now closely guarded is access to resources. Governments are representatives of the people, people are racist. The US would not invade Canada for their shale oil. Australia would not invade New Zealand for their methane.

And most of all the US does not want inflation to go negative. Which is what will happen when China start outstripping their global economic pull. Hence more and more national debt, more and more musical chairs and buck passing, more and more fiscal insanity. The bubble's gunna burst anyway, they've known that since the 80s. They're just riding it as far as it goes.