Dollar seen as risky currency status alert

[Cameroni]

3 minutes ago, WorriedNoodle said:

Markets say otherwise. The markets are always right no matter who is POTUS. Now we see gold at all time highs and dollar and stocks falling. When people are investing in a rock rather than capital and innovation, there's your signal.

 

You do not understand what is happening, Trump WANTS the dollar to fall.

 

Stock markets fluctuate it's not a big issue.

 

The fact that Trump is right that manufacutring has to be revitalised is not affected by market fluctuations.

[placeholder]

13 minutes ago, Cameroni said:

 

Greenspan was a disaster on many levels. Clinton did make that mistake of passing a law that forced banks to give loans to people who could not afford to pay them back. An obvious error borne from ideology, DEI led to the subprime mortgage crisis.

 

The bankers were not locked up because at the time the loans were repackaged they were not bad loans. It was the borrowers who defaulted who made them bad loans.

 

Indeed manufacturing has to be revitalised in the US. Trump is right.

Still repeating the same falsehood? Most of the lenders who gave subprime mortgages were not bound by the CRA acct..

 

Ellen Seidman, formerly the director of the Office of Thrift Supervision,
points out that the surge in subprime lending occurred
long after the enactment of the CRA, and that in 1999
CRA Lending During the Subprime Meltdown
Elizabeth Laderman and Carolina Reid*
Federal Reserve Bank of San Francisco
regulators specifically issued guidance to banks impos-
ing restraints on the riskiest forms of subprime lending.4
In addition, researchers at the Federal Reserve Board of
Governors have reported that the majority of subprime
loans were made by independent mortgage lending
companies, which are not covered by the CRA and
receive less regulatory scrutiny overall.5 In addition to be-
ing excluded from CRA obligations, independent mort-
gage companies are not regularly evaluated for “safety
and soundness” (a key component of the regulatory
oversight of banks) nor for their compliance with con-
sumer protections such as the Truth in Lending Act and
the Equal Credit Opportunity Act.6

https://www.frbsf.org/wp-content/uploads/cra_lending_during_subprime_meltdown11.pdf

[nauseus]

4 hours ago, placeholder said:

So your claim is that even though inflation wasn't rampant before covid, somehow the fed printing money was responsible for it afterwards?

 

https://www.macrotrends.net/2497/historical-inflation-rate-by-year

 

Should we pro rate 2025 up to 4%?

[jas007]

Too much bickering here about who did what and when.

 

Anyone around back in 1987 must surely remember when Greenspan bailed out Wall Street following the crash.  Over time, the "Greenspan Put" became a foregone conclusion and is now the "Fed Put."  After the 1987 bailout, next came a bailout of Long Term Capital Management in 1998 after a bunch of supposed bond market "geniuses"  couldn't even manage a bond portfolio without failing to account for multiple extraneous forces.  That's a long story.

 

Fast forward to the worry about the year 2000 computer meltdown and, again, the Fed flooded the world with money, just in case.  All that money printing and then the dot.com crash/.  Once again, the Fed lowered rates. 

 

Fast forward to the Great financial crisis of 2008.  Another massive Fed bailout.  

 

Anyone notice a pattern here?  The Fed Put.  Whether the Fed admits if or not, they often have no choice.  Rescue the markets or you have a credit freeze, and nobody wants that.

 

So, since at least 1987, The Feds loose money combined with negative nominal interest rates have taken their toll.  

 

Today?  Once again, the bond market is on life support and many of the traditional Fed backstops have been weakened.  Bank reserves are probably near zero.  The reverse repo facility is about gone. And, while the Fed has been reducing their balance sheet, it's still much higher than the 800 billion that was on it in 2000.  How high can they go before they really screw things up?

 

So, what's next?  Another Fed Put, no doubt, whether Jerome Powell likes it or not.  

 

Perhaps there's an alternative?  A massive depression with millions out of work.  A collapse of many banks under the weight of non-performing real estate loans, especially commercial loans.   Political chaos in the USA.

 

It's a mess.  Staglation like the late 70s, but with no easy fix.   

 

 

 

 

[placeholder]

19 minutes ago, nauseus said:

 

Should we pro rate 2025 up to 4%?

What has this got to do with QE?

[placeholder]

2 minutes ago, jas007 said:

Too much bickering here about who did what and when.

 

Anyone around back in 1987 must surely remember when Greenspan bailed out Wall Street following the crash.  Over time, the "Greenspan Put" became a foregone conclusion and is now the "Fed Put."  After the 1987 bailout, next came a bailout of Long Term Capital Management in 1998 after a bunch of supposed bond market "geniuses"  couldn't even manage a bond portfolio without failing to account for multiple extraneous forces.  That's a long story.

 

Fast forward to the worry about the year 2000 computer meltdown and, again, the Fed flooded the world with money, just in case.  All that money printing and then the dot.com crash/.  Once again, the Fed lowered rates. 

 

Fast forward to the Great financial crisis of 2008.  Another massive Fed bailout.  

 

Anyone notice a pattern here?  The Fed Put.  Whether the Fed admits if or not, they often have no choice.  Rescue the markets or you have a credit freeze, and nobody wants that.

 

So, since at least 1987, The Feds loose money combined with negative nominal interest rates have taken their toll.  

 

Today?  Once again, the bond market is on life support and many of the traditional Fed backstops have been weakened.  Bank reserves are probably near zero.  The reverse repo facility is about gone. And, while the Fed has been reducing their balance sheet, it's still much higher than the 800 billion that was on it in 2000.  How high can they go before they really screw things up?

 

So, what's next?  Another Fed Put, no doubt, whether Jerome Powell likes it or not.  

 

Perhaps there's an alternative?  A massive depression with millions out of work.  A collapse of many banks under the weight of non-performing real estate loans, especially commercial loans.   Political chaos in the USA.

 

It's a mess.  Staglation like the late 70s, but with no easy fix.  

 

Too much bickering? The US is mostly in debt because of massive tax cuts enacted by Republicans. It's that simple. And all the attempts to invoke complexity and various factors are merely camouflage and evasion to hide that fact.

[ericbj]

Regarding inflation:

Q.E. produced massive inflation, as might be expected when currency is 'printed' into existence without an equivalent increase in goods and services.

 

That this does not show up in official figures is due to the way those figures are calculated, and who received the low-interest bank loans and what they did with it.

 

The banks that received the hand-outs principally lent it out to their best customers: wealthy investors and speculators.  These had already virtually all they needed from High Street and so invested the bulk on Wall Street (and in real estate etc.).  Thus creating a huge bubble in such places as the stock-markets, where share prices rocketted in relation to actual or potential earnings.

 

A stock-market crash was made inevitable by runaway inflation in share prices caused by cheap loans.  All it needed was a trigger to make it happen.

[black tabby12345]

5 hours ago, placeholder said:

Completely castrated, huh? You sure about that?

China leads the world in manufacturing output, followed by the United States and Japan. These three countries account for a significant portion of global manufacturing output, with China leading the way. Germany and India also rank among the top manufacturing nations globally

 

AI Overview

Here's a more detailed ranking of the top manufacturing countries

• China: 31.6% of global manufacturing output.
• United States: 15.9% of global manufacturing output.
• Japan: 6.5% of global manufacturing output.
• Germany: 4.8% of global manufacturing output.
• India: 2.9% of global manufacturing output.
• South Korea: 2.7% of global manufacturing output.
• Russia: 1.8% of global manufacturing output.
• Italy: 1.8% of global manufacturing output.
• Mexico: 1.7% of global manufacturing output.
• France: 1.6% of global manufacturing output.

 

Thank you for sharing very clear information.

Until 1960s, USA was the superpower of the manufacturing industries.

But things changed, since their mega corporations started to shift their factories overseas.

 

Some people just don't want to recognize that simple historic fact.

And possessed with the no existing illusion; US of A can instantly revive its yesteryears' status as the Factory of the World.

 

In reality, whatever stock/property money US of A got now, it won't any serve to turn the clock back to America's golden age past. 

 

Innocently believing in the empty slogan yelled by not so bright businessman(own firms busted multiple times, and busted with tax evasion several times).

 

One great thing about America's education, often said to be developing Critical Thinking, from the young age.

However, that ability looks like shutting  down when they find some Cult Guru who repeats one same phrase(MAGA) groundlessly.

And the followers never ask him one simple question: How we make it possible?

 

Kicking out illegal aliens is one thing.

Resuming long-lost domestic production is another.

As the manufacturing is the cost and labor intensive work.

Once the whole infrastructure is gone, takes enormous fund and manpower to bring it back home(nearly impossible as the change of industrial structure also changes social landscapes).

 

Not like ordering Gestapo police to arrest some innocent tourists, or break open the door behind which some undocumented people from outside might live.

[nauseus]

40 minutes ago, placeholder said:

What has this got to do with QE?

 

It's your chart. Why not explain it?

[placeholder]

3 minutes ago, nauseus said:

 

It's your chart. Why not explain it?

Had I launched it on its own, and not as a reply, your point would be a good one.

[Cameroni]

47 minutes ago, jas007 said:

Too much bickering here about who did what and when.

 

Anyone around back in 1987 must surely remember when Greenspan bailed out Wall Street following the crash.  Over time, the "Greenspan Put" became a foregone conclusion and is now the "Fed Put."  After the 1987 bailout, next came a bailout of Long Term Capital Management in 1998 after a bunch of supposed bond market "geniuses"  couldn't even manage a bond portfolio without failing to account for multiple extraneous forces.  That's a long story.

 

Fast forward to the worry about the year 2000 computer meltdown and, again, the Fed flooded the world with money, just in case.  All that money printing and then the dot.com crash/.  Once again, the Fed lowered rates. 

 

Fast forward to the Great financial crisis of 2008.  Another massive Fed bailout.  

 

Anyone notice a pattern here?  The Fed Put.  Whether the Fed admits if or not, they often have no choice.  Rescue the markets or you have a credit freeze, and nobody wants that.

 

So, since at least 1987, The Feds loose money combined with negative nominal interest rates have taken their toll.  

 

Today?  Once again, the bond market is on life support and many of the traditional Fed backstops have been weakened.  Bank reserves are probably near zero.  The reverse repo facility is about gone. And, while the Fed has been reducing their balance sheet, it's still much higher than the 800 billion that was on it in 2000.  How high can they go before they really screw things up?

 

So, what's next?  Another Fed Put, no doubt, whether Jerome Powell likes it or not.  

 

Perhaps there's an alternative?  A massive depression with millions out of work.  A collapse of many banks under the weight of non-performing real estate loans, especially commercial loans.   Political chaos in the USA.

 

It's a mess.  Staglation like the late 70s, but with no easy fix.   

 

 

 

 

 

We all remember when the British equivalent of the Fed thought they could outplay the markets during the ERM crisis, when Trump's current economic advisor Scott Bessent was part of Soros' team that put together a bet that broke the Bank of England. Possibly that was the beginning of the end for Britain, now terrified foreign debtors will not help finance their lifestyle anymore.

 

The American situation is different, because the American economy is vastly greater than Britain's, and the American market will always be a  magnetic attraction for export nations. However, I wonder if the Fed could also make a major blunder like the British did. Hopefully not. But QE has contributed to inflation and it is highly doubtful the Fed officials foresaw this. To have Powell in charge now, who famously advised inflation was a temporary phenomenon and nothing to worry about, does not fill you with confidence..

[nauseus]

7 minutes ago, placeholder said:

Had I launched it on its own, and not as a reply, your point would be a good one.

 

What a sad response. 

[WorriedNoodle]

1 hour ago, Cameroni said:

The fact that Trump is right that manufacutring has to be revitalised is not affected by market fluctuations.

Just like in the 1920's when the Agricultural Marketing Act and Smoot Hawley tariffs tried to revitalize farming? How did that work out? The market is always correct.

[Cameroni]

20 minutes ago, WorriedNoodle said:

Just like in the 1920's when the Agricultural Marketing Act and Smoot Hawley tariffs tried to revitalize farming? How did that work out? The market is always correct.

 

The idea that governments and financial regulators cannot influence markets is nonsense. 

 

Of course they can, and have done so countless times in the past. If you want to talk about the past, you will recall that Roosevelt's New Deal pulled the world out of depression.

 

Policies can make a difference.

[jas007]

1 hour ago, placeholder said:

Too much bickering? The US is mostly in debt because of massive tax cuts enacted by Republicans. It's that simple. And all the attempts to invoke complexity and various factors are merely camouflage and evasion to hide that fact.

I don't think anyone will argue with the fact that, over the years, tax cuts have contributed to the current debt problem.  After all, Reagan made no secret of what he wanted to do when he initially took office.  He got some questionable advice, perhaps, but the initial intention was to "starve the beast."  Lower taxes so much that congress would have no choice but to cut spending. You can ask David Stockman all about that.  After a short period, Reagan saw that his plan wasn't working as advertised, and he reversed course, but the tax cuts were politically popular and, over the years, multiple presidents have campaigned on a promise to cut taxes. The voters love it.  

 

To his credit, George H.W. Bush finally agreed to raise taxes in a compromise budget deal, despite campaigning on a "no new taxes" platform.  And for agreeing to tax increases, he was politically punished and lost his reelection bid, in part, because of the tax increases.

 

In any event, the point you seem to forget is that, over the years, the Fed has enabled all this nonsense. The government spends much more money than it takes in, much of that money flows into Walls Street and the banking system, even more money is created by way of the banking system, and it's the top 1% of the people who ultimately profit.  And this is possible for one reason and one reason only: the US Federal Reserve and their penchant for bailing out Wall Street and the banks every time there's trouble.  Those people can't lose.  When they win, they keep all the money.  When they lose, the Fed rides to the rescue, bails them out, and the rest of America pays the price with higher inflation, particularly the middle class.

 

Take away the Fed and their games and none of this would have been possible.  

[KhunLA]

25 minutes ago, jas007 said:

I don't think anyone will argue with the fact that, over the years, tax cuts have contributed to the current debt problem.  After all, Reagan made no secret of what he wanted to do when he initially took office.  He got some questionable advice, perhaps, but the initial intention was to "starve the beast."  Lower taxes so much that congress would have no choice but to cut spending. You can ask David Stockman all about that.  After a short period, Reagan saw that his plan wasn't working as advertised, and he reversed course, but the tax cuts were politically popular and, over the years, multiple presidents have campaigned on a promise to cut taxes. The voters love it.  

 

To his credit, George H.W. Bush finally agreed to raise taxes in a compromise budget deal, despite campaigning on a "no new taxes" platform.  And for agreeing to tax increases, he was politically punished and lost his reelection bid, in part, because of the tax increases.

 

In any event, the point you seem to forget is that, over the years, the Fed has enabled all this nonsense. The government spends much more money than it takes in, much of that money flows into Walls Street and the banking system, even more money is created by way of the banking system, and it's the top 1% of the people who ultimately profit.  And this is possible for one reason and one reason only: the US Federal Reserve and their penchant for bailing out Wall Street and the banks every time there's trouble.  Those people can't lose.  When they win, they keep all the money.  When they lose, the Fed rides to the rescue, bails them out, and the rest of America pays the price with higher inflation, particularly the middle class.

 

Take away the Fed and their games and none of this would have been possible.  

Just read the first couple sentences.   If you subtract the fake wars since 2000, and the market/bank bail out, then that's a huge part of the deficit, along with the interest to maintain it.

 

Also the Medicare / Medicaid cost now, since ACA was written by the insurance lobbyist, and cost are through the roof, and a huge part of the budget.

 

Tax cuts certainly aren't the problem IMHO.

 

Year 2000 & onward, and doesn't include 2024

 

[FlorC]

What about the trillions spend on unnecessary wars ? (the trillions the pentagon can not say where it went).

The tax cuts for the rich , sure,  but also all the waste , SIPHONING trillions

through NGO's , SS fraude , Medicare and Medicaid fraude.

Millions of illegal aliens getting paid and housed and free health care.

Federal money that goes to bail out usually blue states.

Money that goes to countries that don't need or deserve it.

Overpaid government personel.

Black funds by 3 letter agencies to do illegal stuff/ black ops.

The list goes on and on.

 

USD seen as a risky currency has a lot to do with freezing assets of other countries.

Like Russia under Biden. Not just the US debt.

Sanctioning other countries , locking them out of SWIFT.

Making the dollar riskier started way before Trump 47.

 

 

[Walker88]

Using a kind-of-like Bill Maher trick:

 

"I don't know it for a fact; I just know it's true."

 

Here's my take on what POTUS has done, which I predicted long ago. Folks can argue all they want, pretending to be economists, but as a trader, the absolute only thing that matters is results. You make money on a trade, or you lose. Results make sense, not all the political opinions in the world combined.

 

First, I didn't want the market to tank; I just knew it would. (I completely exited US equities). Since I left, the market has been ugly.

 

I did not want the dollar to tank; I just knew it would. (Yes, I went long the euro in the 1.03 to 1.04 range, and I'm now looking at 1.15)

 

I don't want the economy to tank; I just know it will. (Recession if lucky, Depression if not.)

 

I don't want unemployment to soar; I just know it will. (We'll see 10% UE in 2026, which will bode poorly for the midterms).

 

The dollar is down 10% recently. The equity market is upwards of 20% down recently.

 

Near term GDP number might look better than expected, but not because of underlying economic strength, but because consumers will hoard in front of the tariffs. Don't be fooled, especially when MAGAs boast.

 

POTUS is a failed businessman, only saved by his dad's money and co-signed loans, until Mark Burnett created a fantasy, which POTUS has "wisely" used to grift off his goobers, with sneakers, bibles, crypto, a social media campaign donation entity, etc. His ability to run a $30 trillion economy is less than his ability to run a casino, and he bankrupted several of those.

 

To paraphrase Oscar Wilde: "[MAGAs] may boo me, but when I go home and think of my money, I applaud myself."

[FlorC]

The USD /EUR was 1,45 years ago. Now today 1,15 . Big deal.

Of course against real money , gold , everthing is down.

All paper money goes to zero.

[Walker88]

36 minutes ago, FlorC said:

The USD /EUR was 1,45 years ago. Now today 1,15 . Big deal.

Of course against real money , gold , everthing is down.

All paper money goes to zero.

First, nominal rates are far less meaningful than the rate of change. The move in dollar-euro and dollar-yen has been quite rapid. The next key thing is the reason for the abrupt move, and for the dollar, it's totally self-inflicted.

 

The US economy was buzzing along at its best clip since the late 1990s. Growth rates were three times the G7 average since 2020, when Biden took over. The markets were at an all time high.

 

Enter the new President, and all goes to hell in a handbasket in the blink of an eye.

 

As for fiat, the world is never going back to a gold standard. It will give up autos and antibiotics and go back to horse drawn buggies and bloodletting before it goes back on gold. Give up the ghost. Even Nixon knew. Since going off the gold standard more people on planet earth have been lifted from poverty than ever, and that's both nominally and as a percentage of the total population. For most people, fiat has worked out pretty well.

 

Maybe all paper money goes to zero eventually, but that is a matter for Methusalehs of the world. The world is operating okay today on 180 different types of fiat, the USD being just one, though at the moment one of the weakest.

 

Of course some say nobody is better at messing up a good thing than POTUS.

[sandyf]

On 4/20/2025 at 10:02 AM, jas007 said:

The Bretton Woods agreement in 1944 established the US dollar as the world reserve currency,

Only a certain mentality divorced from reality would believe that after the war every country in the world rushed out and converted their reserves to USD.

If it floats your boat feel free.

[jas007]

8 minutes ago, sandyf said:

Only a certain mentality divorced from reality would believe that after the war every country in the world rushed out and converted their reserves to USD.

If it floats your boat feel free.

Did I ever say that? Of course not. But the Bretton Woods agreement in 1944 really did establish the US dollar as the world reserve currency by establishing the dollar as central currency, pegged to gold at specific price, freely convertible between nations, and so on. The treaty really did mean something and really was signed by Britain and finally ratified by Britain in 1945 after an agreement was reached with the US concerning post war aid for their economy.  Was the Pound Sterling still widely used at the time?  Of course. You've quoted the numbers.  And from 1944 forward, its use diminished until it eventually slipped into oblivion. What percentage of the world's reserves are today held as pounds? 4%? 5%??

 

The slow erosion was to be expected. Long term financing contracts were in place around the world and would continue for some time, and because of various political factors, not every country moved away from the pound at the same time.  So it happened slowly.  

 

Anyway, if it makes you happy to pretend the Bretton Woods treaty didn't really establish what it established, I guess that's your prerogative. Just don't pretend that because the aggregate foreign reserves were still held in pounds in 1944 means anything other than that.