Exchange Rate Wars

[LivinLOS]

is exchange rate war a new thing... assuming that it is a conscious effort by the chinese to drive the dollar down, just as though it were a physical war?

is this a realistic analysis of what may be happening? do/can the chinese benefit from this?

and what can america do about it? so far they have been selling assets to who ever will buy them. arab countries seem to lead this charge. won't the loss of american assets weaken them when/if another attack is made?

and a new one...

You really dont get it do you..

The chinese are not holding the dollar down.. They are holding the dollar UP !!!

THINK ABOUT IT !!

Your asking them to revise the Yuan UP and lower the dollar more !!!

The Chinese are getting paid USD.. They then build up a huge deficit.. They could 'sell' those dollars to other assets and the dollar would be toast.. If the chinese said they were selling thier reserves look at a 15 baht dollar if that.. Instead the USD hold the yuan down, they dont cash out thier dollars, they invest them back into USD assets trying to keep thier export market.

Really spend a minute to think about this.

And no none if its new.. This is why those of us posting about the dollar demise for the last 3 or 4 years were laughing at the 'deficits dont matter' quotes and posters. America has given away the keys to its economic kingdom.. They can be torpedoed by the Chinese any time the chinese want !! All that for some cheap electronic goods a failed housing boom. HO-RA !!

[LivinLOS]

China is cheating since the beginning. They have destroyed large part of western industries with :

-their low wages

-compounded by their weak currency

Ohh those nasty nasty Chinese.. Working cheaply to better themselves, selling cheap electronics and goods to the US..

Spending the results of that investment into holding up collapsing US banks, and buying US treasuries to hold up the USD.. So so nasty !!

[LivinLOS]

so it's the fault of the Chinese, rather than bad management by the American government????

Give that man a cigar !!

[LivinLOS]

No worries Yanks the $ will rise, sooner rather than later.

Ohh Brit.. Nothing if not predictable.. Same hopes for the last 3 years !!

Whats that cost you in assets so far ??

[LivinLOS]

hey quite whining.

I have to change my money from us to canadian, back to us then back to thailand baht.

When you have to lose so much in fee's and exchange rates.. then you can whine.

OR you could also get a teaching job 6-8hours a week for 40 000baht a month, if you did not work enough during your life, you still have time to make some ok money

Why cant you do one direct exchange ???

[LivinLOS]

china's role in all this is that - the usa allows china to sell anything and everything they want in the usa. but china doesn't allow the usa the same flexibility. THAT IS WHY THEY HAVE OVER A TRILLION DOLLAR SURPLUS WITH US.

Complete fantasy..

If America made goods and services, at a price that was better than the rest of the world.. People would buy those goods and services.

America is no longer a maker of anything much.. It was christened a 'service' economy.. well hello.. Having burger flippers sell insurance and financial services to each other does not create wealth (niether does house prices rising but no one got that memo either)..

[LivinLOS]

Pretty piss poor returns given the markets were way up in 06 and also up 07. My own portfolio was up 22% in 2006 and 11% in 2007. People should not count on some unknown sod for something as important as investments.

Hog Wash - Not everyone has the knowledge, the time, the ability or inclination to study and understand financial markets and financial planning. Many quite rightly are too busy living their lives to spend time 'investing'.

For these people, investing through fund managers is a very good option, they let the professionals take care of the investments while they go out and live life.

--

I'm almost tempted to ask how much your investments have fallen recently .... BUT .... I halt myself .... remembering I disregard ANY AND ALL claims made by people in Internet Forums on the subject of gains and losses on investments, on the stock market, with property and in business.

Done about 35% per annum for the last few years.. Was over 40 early this year but backed off a bit.. to be down to a bit over 30 in the last 12 calender months.

And no I would not put my money into some managed fund of funds multi level management fees system either.

[ray23]

"Complete fantasy..

If America made goods and services, at a price that was better than the rest of the world.. People would buy those goods and services.

America is no longer a maker of anything much.. It was christened a 'service' economy.. well hello.. Having burger flippers sell insurance and financial services to each other does not create wealth (niether does house prices rising but no one got that memo either).. "

Unfortunatley this is very close to being true. But where did that come from, the American worker. Or buisness people who decided they could make a gidget for less some where else. Because somewhere else there was no middle class. You were poor or you were rich. Hence you did not have to pay a liveable wage. The rich became richer and the poor could get subsiday money for there labor.

Look around you Thai's build the homes we buy, how many of those workers live in the same kind of even track housing.

So the sad thing is that the few gave away our manufactoring ability. It wasn't the " Americans" that did that. It was the same group of greedy individuals who have now ruined the financial markets.

Whats even sadder they derial the train we give them huge bonus's for ruining the very thing they were required to make profitable. In the end we will pick up the pieces so they can for it again and become even more wealthy.

This really has nothing to do with nations, China or anyother, what it does have to do with is the powerful , becoming more powerful.

I see comments about people retiring under funded, personally that is not true in my case. I had a good retirement and will in short matter of time get my second one. But if you think one minute that losing 25% of my usabel income makes me comforatable you are very wrong.

Hindsight is 20/20 I retired five years ago. How many of you out there were that sharp that you could predicted this six years ago? So how about we engage the grey matter before we get into arrogance.

If this were predictable six years ago I certianly never saw anyone saying it.

Everyone is quick on the trigger, anyone see that America donated 200 Mil, to the world food fund. Guess what my children will be paying for that. But what would have been said if America stepped up and said hey we got our own problems, go to Asia and get the money? Maybe it's time for China to step up. It's a world super Power so why not. Let thier children futures be invested in this kind of thing.

America runs the biggest welfare program in the world. We created a mess in Iraq no doubt about it and yes we should and have been paying. But at the same time Iraq is making huge fortunes on oil. We couldn't even get a discount of gas from them, for our soldiers vehicle in country.

We paid, but Iraq is no longer about Sadam and all the bad things he did to keep a lid on that mess. Now it is just the mess and you guessed the powerful wanting to be more powerful. If ther was one thing that Vietnam should have taught us it was stay out of civil wars We are not goign to win in Iraq because in reality it is no longer our war. Either the Sunis or the Shietes will win because it's there war.. The Kurd's if they are lucky will get thier little corner.

Congress is making noise like it is going to shut down funding we will see what we see.

America seems to be resented world wide, if they really do what they should be doing to protect themselves and the future how do you think they would be precieved then. America stopped putting American's first a very long time a go. If they did that then we could get out of this mess.

I'm American I could care less what political party anyone in the world lives in. I don't care what anyone elses relegion is. If those people don't like how thier lives are then it's up to them to change it not me or mine.

America has the talent and resources to make gidgets, what it doesn't have is the business people who see the value in keeping the country strong.

So what do I want to see American taking care of American's for a while and then giving when they have something to give. I'm not speaking of the greedy power brokers, I mean the average guy like me and mine.

Now I'm going to get off my soap box don't really like it there, with one last comment your powerful and rich said nothing when reaping the benefits, there crying fowl now because it's time to pay.

No disrespect meant to anyone

[Heng]

I offer my current thoughts here:

China is responsible for the falling dollar.

Nah, not their fault, but I bet they're having a good laugh about it all though.

[Heng]

Everyone is quick on the trigger, anyone see that America donated 200 Mil, to the world food fund. Guess what my children will be paying for that. But what would have been said if America stepped up and said hey we got our own problems, go to Asia and get the money? Maybe it's time for China to step up. It's a world super Power so why not. Let thier children futures be invested in this kind of thing.

They do, just like a whole lot of other countries. Aid programs in general are for single digit % humanitarian reasons and double digit % political + economic benefits for whoever is providing the funds, weapons, food, oil, etc. Even now there are still US based (typically under the UN banner) aid programs to China.

The problem in the US case is they don't follow the basic 'spend less than you make' philosophy (or perhaps betting too heavily that the benefits will one day outweigh the pre-payments: for instance how will US$2-3 billion in yearly grants NOT loans to Israel ever be worth it?) instead choosing to push the debt over to the next generation again and again and again.

[LivinLOS]

So the sad thing is that the few gave away our manufactoring ability. It wasn't the " Americans" that did that. It was the same group of greedy individuals who have now ruined the financial markets.

It was also middle america.. Getting fat and lazy.. Having a negative savings rate (china has a 30% personal savings rate from memory.. they have been hungry see !!).. Buying TV's they cant afford to put in homes they cant pay for.. For being greedy and assuming they could flip real estate at low low interest rates...

You dont need to look far for America woes.. A mirror is far enough.

Hindsight is 20/20 I retired five years ago. How many of you out there were that sharp that you could predicted this six years ago? So how about we engage the grey matter before we get into arrogance.

If this were predictable six years ago I certianly never saw anyone saying it.

I dont mean to gloat.. But 4 years ago I was ranting that this was coming.. Often I was laughed at (hence why I am often so brash about it all now).. I personally dont think 6 years ago all these seeds were planted, but after the tech wreck, when bubbled greenspan lowered rates to 1% and the US housing boom became a joke.. Well EVERYTHING was obvious.. Hence why I have returned almost 300% of my pile since I came to thailand 5 or 6 years back.

Everyone is quick on the trigger, anyone see that America donated 200 Mil, to the world food fund. Guess what my children will be paying for that. But what would have been said if America stepped up and said hey we got our own problems, go to Asia and get the money? Maybe it's time for China to step up. It's a world super Power so why not. Let thier children futures be invested in this kind of thing.

First thing.. Compared to the few trillion the war for oil will cost its a drop in the bucket.. Second thing, which is always a total mystery to US people, the US has used the wold ban, food aid, development programs etc since the 60's as a tool to subjigate the 3rd world and create the 3rd world debt. keeping the poor poor and ensure that the US has control over them. Please go read 3 books, Confessions of an economic hitman, A game as old an empire, and rogue state.. Once you have read them lets discuss the world bank (run by wolfowitz and any other neo con hawk.. What do you REALLY think its doing ??.. Its a tool and its done so the proles dont understand.. Please read those three, if I hadnt given my copies away I would happily post them to you..

We paid, but Iraq is no longer about Sadam and all the bad things he did to keep a lid on that mess. Now it is just the mess and you guessed the powerful wanting to be more powerful. If ther was one thing that Vietnam should have taught us it was stay out of civil wars We are not goign to win in Iraq because in reality it is no longer our war. Either the Sunis or the Shietes will win because it's there war.. The Kurd's if they are lucky will get thier little corner.

So you admit then that it was a farce from the beggining.. You went in made a mess (more of I should say) of the middle east and confirmed what every anti western arab already thought, becuase the US is so pro isreal non stop.. Of course it wasnt because there was oil there ?? It was cos he was a nasty man.. Like Mugabe for instance, but coffee isnt as interesting as energy so no ones heading into Africa with the tanks !

America seems to be resented world wide, if they really do what they should be doing to protect themselves and the future how do you think they would be precieved then. America stopped putting American's first a very long time a go. If they did that then we could get out of this mess.

America is resented because of what america does.. As I said already.. The book 'rogue state' is a good place to start.. Basically since the 50's and the CIA unseating the properly elected Mosadeq, when the CIA installed the shar of iran, a total depot with fanatical torturing secret police (because mossadeq was going to cut out the american oil companies), someone far worse than Saddam, the CIA has been training torture squads (the school of the americas anyone.. Read about it) Practically creating the hard line iranian anti US reaction you have now.. Blowback is the term.. and meddling in other countries politics non stop.. Countries learn to resent that !!

America has the talent and resources to make gidgets, what it doesn't have is the business people who see the value in keeping the country strong.

Sure they do.. When they will work for the same bowl of rice that a china man will work for, live in homes like a chinaman, bicycle miles to work, etc etc etc.. Then you will have some balance.. Otherwise you have what you have now, a 'made in the US gidget for 100 USD and a Made in china gidget for 5.99.. Compare for a minute the use of global resources (barrels of oil) that an american uses per year, the food miles involved in a western diet, the cost of living the american lifestyle to the planet. Well when the western lifestyle has been reduced to an equal footing with an equivalent educated and working developing worlder.. There will be balance. But until then the world is shifting.

I want to emphasize here that I am not anti american (tho I am very anti us globalized meddling and subjugation of the developing world).. I have some great yank mates.. I have spent time travelling all over the states and apart from being a bit inward looking and not really knowing what is done in thier name I find Americans open honest friendly and in general fun.. But Americans just seem so ignorant about what America has done to other countries for the last 60 years !! The whole post WW baby boomer generation really.

[LivinLOS]

Apologies for the term 'you' when I rant away.. I am not trying to be personal, As I said I dont see that as a personal thing with Americans 1 on 1 and I am not a yank basher (I know that seems mad given the above) but many of the above are personal hot button topics for me and ones I tend to get worked up on them.. The demise of the western world and the USD as the global premier currency is what we are talking about gentlemen.. Thats no small thing !!

Would be great to rant them over a cold beer one day.. First ones on me.

Edited April 15, 2008 by LivinLOS

[LivinLOS]

They do, just like a whole lot of other countries. Aid programs in general are for single digit % humanitarian reasons and double digit % political + economic benefits for whoever is providing the funds, weapons, food, oil, etc. Even now there are still US based (typically under the UN banner) aid programs to China.

The problem in the US case is they don't follow the basic 'spend less than you make' philosophy (or perhaps betting too heavily that the benefits will one day outweigh the pre-payments: for instance how will US$2-3 billion in yearly grants NOT loans to Israel ever be worth it?) instead choosing to push the debt over to the next generation again and again and again.

100% correct and nicely perceptive Heng.. All valid areas, 'aid' as a tool, savings and reinvestment in yourself as a nation, and even the Israel conundrum..

Why can you say it in 5 lines but I need a page ???

[Naam]

Americans just seem so ignorant about what America has done to other countries for the last 60 years !!

the problem is that some Americans (very good friends of mine) prefer to stay ignorant and are not willing to accept or discuss facts.

[LivinLOS]

Well the information is out there..

I tend to think the 'ideals' of America are probably the most noble that you could have.. The respect that 'all men are created equal' the freedom to do as you like and be left alone as long as you dont harm others.. The 'pursuit of life liberty and happyness'... i mean, what other base of governance actually tells you you should be going out and being happy.. I love that !!!

But somewhere along the line things have got very twisted.. and somehow many Americans dont see that or dont want to see that.. American foriegn policy is just a collection of Machiavellian horror while at the same time the average american thinks they are sooo good with world bank donations and why does the world hate us so ??

I mean this very thread, in which the OP blames china for a global mess that is US created through and through.. All while china is actually dollar supportive !!! Kinda laughable..

[Crushdepth]

I offer my current thoughts here:

China is responsible for the falling dollar.

Had China re-valued their Yuan currency when asked to do so by the US last year

I offer you my current thoughts. Your president is a bloody idiot, you'd have more money if he didn't insist on blowing it up in Iraq and Afghanistan, and since when is China or any other country obliged to follow your afore-mentioned warmongering, cretinous leader's recommendations on its own currency? US financial problems have US financial origin. Live with it, get used to it, and vote Democrat next time.

[LivinLOS]

Books everyone interested in this topic should read.

The bubble of American supremacy - Soros

Empire of Deb - Adisson wiggin and Bill Bonner

Financial reckoning Day - Same as above.. Both of these are funny too !! Enjoyable easy economic reads.

Theres a new Soros out next month.. Its a digital download now.

Less so but still good reads and interesting..

Mobs messias and markets

Crash proof

Goodbye America

I would also say (as I am a tin foil hat wearing goldbug ) gold once and future money.

And on the food aid issue.. Really these should be read by anyone !!

Confessions of an economic hitman

A Game as old as empire (not as powerful as his personal stroy)

Secret history of American Empire

Rogue state

A legacy of ashes

I could go on and on.. I am a pretty voracious reader and amazon 10 or 15 books every month or so..

[LivinLOS]

I offer my current thoughts here:

China is responsible for the falling dollar.

Had China re-valued their Yuan currency when asked to do so by the US last year

I offer you my current thoughts. Your president is a bloody idiot, you'd have more money if he didn't insist on blowing it up in Iraq and Afghanistan, and since when is China or any other country obliged to follow your afore-mentioned warmongering, cretinous leader's recommendations on its own currency? US financial problems have US financial origin. Live with it, get used to it, and vote Democrat next time.

I am not wanting to get into politics.. I think they are as bad as each other (they are all the same puppets.. Skull and bonesmen, etc etc.. Libertarian here through and through.. Whats the line ?? A man needs a little luck and a little government but only a fool trusts either ??

But the main point in this reply is..

Even if china was responsible for the falling dollar.. why should they have revalued to benefit the US at a detriment to themselves ?? I mean surely Chinas responsibility is to the people of China not the people in the US.. Why would a competitor (as thats what countries economies are) ever hurt themselves to benefit an opponent ??

The whole concept boggles my mind !!!

[Naam]

is exchange rate war a new thing... assuming that it is a conscious effort by the chinese to drive the dollar down, just as though it were a physical war?

is this a realistic analysis of what may be happening? do/can the chinese benefit from this?

and what can america do about it? so far they have been selling assets to who ever will buy them. arab countries seem to lead this charge. won't the loss of american assets weaken them when/if another attack is made?

and a new one...

Really spend a minute to think about this.

AARRRGGGHHHH! you think people like "Altman" are able to think?

[Naam]

I am a pretty voracious reader and amazon 10 or 15 books every month or so..

i wish i could read but i have been told it is very difficult to learn reading

[ray23]

Ok I see you guys points, but my point is simple, is it really that much different then your home countries?

Where I have problem understanding is the number of people who seem to think Bush is a average American.

The fact is the generation that I come from were taught to work for a living. There were many Americans who worked and retired from thier first jobs. Theory was you take care of the company it will take care of you. Hasn't worked out that way has it.

Sorry I don't blame the workers for that.

Let me tell you when I finally got time to think about Foriegn Policy, when I stopped working 12 hours days or two jobs, or going to school at night to get a degree. In other word when I retired in Thailand and I was not different then my peers. You know many people insult America based on Bush, you don't get it he is not smart enough to understand it. So in the end who you really insult are average Americans like me.

Well that's OK. You know something like all Brits are drunks cause I have seen a few get drunk and start fights. But that is my experience so they must all be that way. Of course I will look the other way if it's American doing the same thing. Good clear thinking Chia Mai

[Heng]

They do, just like a whole lot of other countries. Aid programs in general are for single digit % humanitarian reasons and double digit % political + economic benefits for whoever is providing the funds, weapons, food, oil, etc. Even now there are still US based (typically under the UN banner) aid programs to China.

The problem in the US case is they don't follow the basic 'spend less than you make' philosophy (or perhaps betting too heavily that the benefits will one day outweigh the pre-payments: for instance how will US$2-3 billion in yearly grants NOT loans to Israel ever be worth it?) instead choosing to push the debt over to the next generation again and again and again.

100% correct and nicely perceptive Heng.. All valid areas, 'aid' as a tool, savings and reinvestment in yourself as a nation, and even the Israel conundrum..

Why can you say it in 5 lines but I need a page ???

Maybe you type faster?

[LivinLOS]

Ok I see you guys points, but my point is simple, is it really that much different then your home countries?

Where I have problem understanding is the number of people who seem to think Bush is a average American.

The fact is the generation that I come from were taught to work for a living. There were many Americans who worked and retired from thier first jobs. Theory was you take care of the company it will take care of you. Hasn't worked out that way has it.

Sorry I don't blame the workers for that.

But look at the standard of living an American expects ?? A new car every 3 - 5 years (on cheap credit).. Big screen TV's (on credit).. 2 and 3000 sqft homes (on credit).. Holidays (tho less international).. Look at the american leisure industry the jetski in the garage, the adult toys, dirtbikes, 5 liter 10 MPG cars, etc etc.. I went to the states to travel around from the tail end of thatchers britain, I was astounded by the wealth and living standard that normal blue collar americans expect as normal.

Now why would an American blue collar worker be worth 10x or 20x the labour rate of a Indian blue collar worker ?? Why would a US engineering graduate be worth 10x or 20x more than an equal graduate of a poor country. The simple answer is they are not. So there will be a radical levelling of the playing field.

Let me tell you when I finally got time to think about Foriegn Policy, when I stopped working 12 hours days or two jobs, or going to school at night to get a degree. In other word when I retired in Thailand and I was not different then my peers. You know many people insult America based on Bush, you don't get it he is not smart enough to understand it. So in the end who you really insult are average Americans like me.

Why not vote for the best and brightest then.. Lets face it America voted.. TWICE !!!

Also there has been historical reasons why the US has had a tailwind.. After WWII Britains empire had crested and fallen.. The pound had lost its place as the global reserve currency and the bretton woods agreement and marshal plan firmly cemented the US Dollar as the worlds reserve currency and the unit that all else is measured against.

Then the fact that oil is traded in dollars (you may notice what happened when saddam said he was going to sell his oil in Euros ?? Hmmm WMD's or slight of hand ??) and you have another factor that allowed the US to live beyond its means.

Back in 73 (or 72) Nixon closed the gold window.. this was the last vestige that tied the USD to gold holdings and values.. From that day forth the USD was merely a number, in god we trust (but all else pay cash).. This allowed the dollar to be freely printed passing power to the bankers.. Once money is just numbers on a screen, the whole issue of derivative plays grows exponentially.

Late in the 80 a guy called Lous Ranieri came up with a way to securitze debt.. By splitting debt into tranches it was possible to start inventing this alphabet soup of debt based instruments and debt based derivates.. From that point on american debt didnt even get held by Americans.. You can trace a lot of whats happening (and I think this is looking quite possibly like another great depression, possible hyper inflation, possible really really nsaty things that will wipe out a lot of people totally) right back to Old Lous at Solomon !! One day the history books are going to start looking for a scapegoat as to what started the depression of 2012 and Lous is right up there at the top of the list.

Now while this flood of cheap debt meant everyone got 1% mortgages.. Its boom time.. Moneyfight !! While the US government prints billions to pay for its guns and butter politics, and that freshly minted money finds its way into assets the markest are happy.. Everyone feels good.. But no one really mentions that the stock market going up (when production isnt) or house prices going up is just inflation. Of course thats good inflation !!! Inflation in the DOW and everyones happy.. House prices rising 20 - 30% in a year time to refi and buy a new Beemer... But once that same inflation, with the exact same root causes effects medical care, food prices, cost of living.. Everyone panics.. Its the same dam_n thing !!! Blame bubbles greenspan.. Blame the refinancing homebuyers.. Blame those idiots that elect leaders who have no idea of fiscal responsibility.

The seeds have been laid.. I reckon its gonna be a bitter harvest.

[LivinLOS]

They do, just like a whole lot of other countries. Aid programs in general are for single digit % humanitarian reasons and double digit % political + economic benefits for whoever is providing the funds, weapons, food, oil, etc. Even now there are still US based (typically under the UN banner) aid programs to China.

The problem in the US case is they don't follow the basic 'spend less than you make' philosophy (or perhaps betting too heavily that the benefits will one day outweigh the pre-payments: for instance how will US$2-3 billion in yearly grants NOT loans to Israel ever be worth it?) instead choosing to push the debt over to the next generation again and again and again.

100% correct and nicely perceptive Heng.. All valid areas, 'aid' as a tool, savings and reinvestment in yourself as a nation, and even the Israel conundrum..

Why can you say it in 5 lines but I need a page ???

Maybe you type faster?

Or the fact I had been drinking in the afternoon again.. It gets me fired up and holding forth !!

[ray23]

Ok I see you guys points, but my point is simple, is it really that much different then your home countries?

Where I have problem understanding is the number of people who seem to think Bush is a average American.

The fact is the generation that I come from were taught to work for a living. There were many Americans who worked and retired from thier first jobs. Theory was you take care of the company it will take care of you. Hasn't worked out that way has it.

Sorry I don't blame the workers for that.

But look at the standard of living an American expects ?? A new car every 3 - 5 years (on cheap credit).. Big screen TV's (on credit).. 2 and 3000 sqft homes (on credit).. Holidays (tho less international).. Look at the american leisure industry the jetski in the garage, the adult toys, dirtbikes, 5 liter 10 MPG cars, etc etc.. I went to the states to travel around from the tail end of thatchers britain, I was astounded by the wealth and living standard that normal blue collar americans expect as normal.

Now why would an American blue collar worker be worth 10x or 20x the labour rate of a Indian blue collar worker ?? Why would a US engineering graduate be worth 10x or 20x more than an equal graduate of a poor country. The simple answer is they are not. So there will be a radical levelling of the playing field.

Let me tell you when I finally got time to think about Foriegn Policy, when I stopped working 12 hours days or two jobs, or going to school at night to get a degree. In other word when I retired in Thailand and I was not different then my peers. You know many people insult America based on Bush, you don't get it he is not smart enough to understand it. So in the end who you really insult are average Americans like me.

Why not vote for the best and brightest then.. Lets face it America voted.. TWICE !!!

Also there has been historical reasons why the US has had a tailwind.. After WWII Britains empire had crested and fallen.. The pound had lost its place as the global reserve currency and the bretton woods agreement and marshal plan firmly cemented the US Dollar as the worlds reserve currency and the unit that all else is measured against.

Then the fact that oil is traded in dollars (you may notice what happened when saddam said he was going to sell his oil in Euros ?? Hmmm WMD's or slight of hand ??) and you have another factor that allowed the US to live beyond its means.

Back in 73 (or 72) Nixon closed the gold window.. this was the last vestige that tied the USD to gold holdings and values.. From that day forth the USD was merely a number, in god we trust (but all else pay cash).. This allowed the dollar to be freely printed passing power to the bankers.. Once money is just numbers on a screen, the whole issue of derivative plays grows exponentially.

Late in the 80 a guy called Lous Ranieri came up with a way to securitze debt.. By splitting debt into tranches it was possible to start inventing this alphabet soup of debt based instruments and debt based derivates.. From that point on american debt didnt even get held by Americans.. You can trace a lot of whats happening (and I think this is looking quite possibly like another great depression, possible hyper inflation, possible really really nsaty things that will wipe out a lot of people totally) right back to Old Lous at Solomon !! One day the history books are going to start looking for a scapegoat as to what started the depression of 2012 and Lous is right up there at the top of the list.

Now while this flood of cheap debt meant everyone got 1% mortgages.. Its boom time.. Moneyfight !! While the US government prints billions to pay for its guns and butter politics, and that freshly minted money finds its way into assets the markest are happy.. Everyone feels good.. But no one really mentions that the stock market going up (when production isnt) or house prices going up is just inflation. Of course thats good inflation !!! Inflation in the DOW and everyones happy.. House prices rising 20 - 30% in a year time to refi and buy a new Beemer... But once that same inflation, with the exact same root causes effects medical care, food prices, cost of living.. Everyone panics.. Its the same dam_n thing !!! Blame bubbles greenspan.. Blame the refinancing homebuyers.. Blame those idiots that elect leaders who have no idea of fiscal responsibility.

The seeds have been laid.. I reckon its gonna be a bitter harvest.

Darn Gary I wish I drink so I could have a beer and respond

So lets take a look at what I think the average American is, I have never purchased a home beyond 1700 Sq Ft. The lowest loan I remember is 4&3/4% Cal Vet loan. Never actually owned a house always rented from the mortgage company. Toy's guilty once had a jeep that I used for weekend activities and traveling to work. Owned I believe three motorycles one a time over lifetime in the states none were financed. I have actually owned more bikles here in my five years, difference now I have the time to play with them. Neve owned a boat or a jet ski. Never really had the time to play. Might take real vacation every four years or so. Cars guilty but coming from Southern California you put on lots of milage, so when yuo start hittting 100K milage it's more expensive to keep fixing them to buy a new one. Don't remember any real cheep interest rates. But then again I'm old so maybe.

You see the people I knew in America for the most part were conservative, they were more concerned about education for tthier children then a sports car. That is where a huge amount of the money I earned went and thats OK I wouldn't change a thing. I did better in my life then my parents and hoprfully my children will do better then I have. I made sure they had the tools within my capabilty now the rest is up to them.

George like it or not a very lucky man, he did not win the popular vote, he won the electoral vote based on some chards, first time out. The second time we were at war and we later found out for all the wrong reasons. But it wasn't just American that believed what we were told at the time.

There are some very uncomfortable things about our political system we have an election coming up with at the moment three possible canidates. Are they the best and brightest that America has to offer, I serioulsy doubt that. You see the sad thing about our system is it is not about who is the best, but who has the fianancing to campaign and the highest chance of winning. So who is the best that we haev sitting in front of us now, do yuo know? Cause I don't have a clue.

Oh yes Tricky Dick, all he really did was to make it impossible for anyone to really achieve the American dream. I had to come to Thailand to have that.

Old Lous, keel haul seems appropriate to me, not huge bonus for failing. Depressesion 2012 I don't think so, in four short years we will know.

Things change with time if that Indian guy is now capable of producing at the same level as an American then he deserves the same reward. In my short stint in Kuwait I saw how the Indian workers were treated thaere adn my friend it wasn't nice. A tenth of the pay pretty accurate. Never given job beyond minimnal support functionions. Were they capable of more I'm sure they were, they seemed like smart people but had no incentive to go beyond where they were. Simplly becauset they were making more then they could have dreamed possible in thier own country. Did the prices go down for exports when cost were reduced by 90% if they did I don't remember it. Did the standard of living go up by 90% for those producing the products, maybe I don't have that knowledge, but my guess is no. But you can bet the power peoples standard of living went up a huge amount.

You see I don't doubt one word that you said, but I think applying to an entire people is not accurate.

There are many things that have happened and are happening in my country that I'm not happy with. But, I have about a much chance of changing them as any other average citizen of any country. It dpes not make me ashamed of the people of my country, that is something that is an individual thing. I'm proud of some others no I'm not.

The way I looking at where the economy is going in the states, is that people will adjust. I've lost 25% of my income I adjusted I'm an American. Most people in the states are really no different then I am. But most people don't pull the line that blows the whistle ans make the train go. Just like everywhere else. I don't demean people for trying to have a good life anymore then I would demean those involved in China's growth. I wish them well but everything comes to a new cycle eventually.

So you want to condem the people who caused this I'm on your side. But to put down the people who actually believed the line of crap fed them from birth, no I don't think so. They got lessons coming and hopefully they will learn just as the rest of us had to do. What scares me is rewarding a few for failure, not hardly what I was taught as a young child by my parents. The same lessons I gave my children. It is a trend I have now seen over at least ten years.

Now Gary to go anyfurther I would have to go back to drinking That wouldn't be a good thing So I'm leaving it here. Now we will see how much resolve I have

[ozzydom]

Ok I see you guys points, but my point is simple, is it really that much different then your home countries?

Where I have problem understanding is the number of people who seem to think Bush is a average American.

The fact is the generation that I come from were taught to work for a living. There were many Americans who worked and retired from thier first jobs. Theory was you take care of the company it will take care of you. Hasn't worked out that way has it.

Sorry I don't blame the workers for that.

But look at the standard of living an American expects ?? A new car every 3 - 5 years (on cheap credit).. Big screen TV's (on credit).. 2 and 3000 sqft homes (on credit).. Holidays (tho less international).. Look at the american leisure industry the jetski in the garage, the adult toys, dirtbikes, 5 liter 10 MPG cars, etc etc.. I went to the states to travel around from the tail end of thatchers britain, I was astounded by the wealth and living standard that normal blue collar americans expect as normal.

Now why would an American blue collar worker be worth 10x or 20x the labour rate of a Indian blue collar worker ?? Why would a US engineering graduate be worth 10x or 20x more than an equal graduate of a poor country. The simple answer is they are not. So there will be a radical levelling of the playing field.

Let me tell you when I finally got time to think about Foriegn Policy, when I stopped working 12 hours days or two jobs, or going to school at night to get a degree. In other word when I retired in Thailand and I was not different then my peers. You know many people insult America based on Bush, you don't get it he is not smart enough to understand it. So in the end who you really insult are average Americans like me.

Why not vote for the best and brightest then.. Lets face it America voted.. TWICE !!!

Also there has been historical reasons why the US has had a tailwind.. After WWII Britains empire had crested and fallen.. The pound had lost its place as the global reserve currency and the bretton woods agreement and marshal plan firmly cemented the US Dollar as the worlds reserve currency and the unit that all else is measured against.

Then the fact that oil is traded in dollars (you may notice what happened when saddam said he was going to sell his oil in Euros ?? Hmmm WMD's or slight of hand ??) and you have another factor that allowed the US to live beyond its means.

Back in 73 (or 72) Nixon closed the gold window.. this was the last vestige that tied the USD to gold holdings and values.. From that day forth the USD was merely a number, in god we trust (but all else pay cash).. This allowed the dollar to be freely printed passing power to the bankers.. Once money is just numbers on a screen, the whole issue of derivative plays grows exponentially.

Late in the 80 a guy called Lous Ranieri came up with a way to securitze debt.. By splitting debt into tranches it was possible to start inventing this alphabet soup of debt based instruments and debt based derivates.. From that point on american debt didnt even get held by Americans.. You can trace a lot of whats happening (and I think this is looking quite possibly like another great depression, possible hyper inflation, possible really really nsaty things that will wipe out a lot of people totally) right back to Old Lous at Solomon !! One day the history books are going to start looking for a scapegoat as to what started the depression of 2012 and Lous is right up there at the top of the list.

Now while this flood of cheap debt meant everyone got 1% mortgages.. Its boom time.. Moneyfight !! While the US government prints billions to pay for its guns and butter politics, and that freshly minted money finds its way into assets the markest are happy.. Everyone feels good.. But no one really mentions that the stock market going up (when production isnt) or house prices going up is just inflation. Of course thats good inflation !!! Inflation in the DOW and everyones happy.. House prices rising 20 - 30% in a year time to refi and buy a new Beemer... But once that same inflation, with the exact same root causes effects medical care, food prices, cost of living.. Everyone panics.. Its the same dam_n thing !!! Blame bubbles greenspan.. Blame the refinancing homebuyers.. Blame those idiots that elect leaders who have no idea of fiscal responsibility.

The seeds have been laid.. I reckon its gonna be a bitter harvest.

Darn Gary I wish I drink so I could have a beer and respond

So lets take a look at what I think the average American is, I have never purchased a home beyond 1700 Sq Ft. The lowest loan I remember is 4&3/4% Cal Vet loan. Never actually owned a house always rented from the mortgage company. Toy's guilty once had a jeep that I used for weekend activities and traveling to work. Owned I believe three motorycles one a time over lifetime in the states none were financed. I have actually owned more bikles here in my five years, difference now I have the time to play with them. Neve owned a boat or a jet ski. Never really had the time to play. Might take real vacation every four years or so. Cars guilty but coming from Southern California you put on lots of milage, so when yuo start hittting 100K milage it's more expensive to keep fixing them to buy a new one. Don't remember any real cheep interest rates. But then again I'm old so maybe.

You see the people I knew in America for the most part were conservative, they were more concerned about education for tthier children then a sports car. That is where a huge amount of the money I earned went and thats OK I wouldn't change a thing. I did better in my life then my parents and hoprfully my children will do better then I have. I made sure they had the tools within my capabilty now the rest is up to them.

George like it or not a very lucky man, he did not win the popular vote, he won the electoral vote based on some chards, first time out. The second time we were at war and we later found out for all the wrong reasons. But it wasn't just American that believed what we were told at the time.

There are some very uncomfortable things about our political system we have an election coming up with at the moment three possible canidates. Are they the best and brightest that America has to offer, I serioulsy doubt that. You see the sad thing about our system is it is not about who is the best, but who has the fianancing to campaign and the highest chance of winning. So who is the best that we haev sitting in front of us now, do yuo know? Cause I don't have a clue.

Oh yes Tricky Dick, all he really did was to make it impossible for anyone to really achieve the American dream. I had to come to Thailand to have that.

Old Lous, keel haul seems appropriate to me, not huge bonus for failing. Depressesion 2012 I don't think so, in four short years we will know.

Things change with time if that Indian guy is now capable of producing at the same level as an American then he deserves the same reward. In my short stint in Kuwait I saw how the Indian workers were treated thaere adn my friend it wasn't nice. A tenth of the pay pretty accurate. Never given job beyond minimnal support functionions. Were they capable of more I'm sure they were, they seemed like smart people but had no incentive to go beyond where they were. Simplly becauset they were making more then they could have dreamed possible in thier own country. Did the prices go down for exports when cost were reduced by 90% if they did I don't remember it. Did the standard of living go up by 90% for those producing the products, maybe I don't have that knowledge, but my guess is no. But you can bet the power peoples standard of living went up a huge amount.

You see I don't doubt one word that you said, but I think applying to an entire people is not accurate.

There are many things that have happened and are happening in my country that I'm not happy with. But, I have about a much chance of changing them as any other average citizen of any country. It dpes not make me ashamed of the people of my country, that is something that is an individual thing. I'm proud of some others no I'm not.

The way I looking at where the economy is going in the states, is that people will adjust. I've lost 25% of my income I adjusted I'm an American. Most people in the states are really no different then I am. But most people don't pull the line that blows the whistle ans make the train go. Just like everywhere else. I don't demean people for trying to have a good life anymore then I would demean those involved in China's growth. I wish them well but everything comes to a new cycle eventually.

So you want to condem the people who caused this I'm on your side. But to put down the people who actually believed the line of crap fed them from birth, no I don't think so. They got lessons coming and hopefully they will learn just as the rest of us had to do. What scares me is rewarding a few for failure, not hardly what I was taught as a young child by my parents. The same lessons I gave my children. It is a trend I have now seen over at least ten years.

Now Gary to go anyfurther I would have to go back to drinking That wouldn't be a good thing So I'm leaving it here. Now we will see how much resolve I have

Ah,the philosophical side of you is starting to show mate,(maybe its an age thing)

[LivinLOS]

You see the people I knew in America for the most part were conservative, they were more concerned about education for tthier children then a sports car. That is where a huge amount of the money I earned went and thats OK I wouldn't change a thing. I did better in my life then my parents and hoprfully my children will do better then I have. I made sure they had the tools within my capabilty now the rest is up to them.

Fiscally conservative and the ideal of independance was probably what made america great..

Post WWII America made goods.. hel_l for my dads generation 'american blue jeans' etc was the goal.. Made in America meant a standard..

But the tail end of the boomer generation and the gen X Y etc have now bankrupted the nation.. Thats without the medicare and retiring boomers timebomb thats out there..

Have a watch of this

http://video.abovetopsecret.com/#

In debt we trust (the 2nd vid listed).. Thats the kind of basic living beyond your / thier means that is behind the american consumer culture.. This debt mess has created a bankrupt nation for electric doodads and buggy whips.

I would also say thats theres a deeper reason behind this too (beware toin foil hat wearing anti banker / FED stuff ahead).. Try understanding

http://video.google.com/videoplay?docid=-9050474362583451279

Money as Debt.. Realize that the fed HAS to keep inflating at exponential rates to keep providing the economy monetary expansion with which to pay thier ever greater interest. Its a monster !!

You are aware that the entire income tax remissions by every american every year is not enough to pay the interest to the FED ?? You are aware the fed is a private bank not a government institution ?? You are aware it is a secret bank with non disclosure of its owners ?? All the fed does is 'create' money from nothing, which it lends to the US government and its citizens, who then pay it back with interest. They even meet to set the appropriate rates of interest to manage the amount out without stalling the economy !!!!! Why is a private for profit organisation allowed to do this (read the creature from jekyl island for some history) ?? Beats me !!!

Remember every cent, of every dollar, of income tax from every american.. Doesnt even cover the interest you paying those bankers !! for the ardious task of creating money from nothing.. Nice work if you can get it.

[Misty]

You are aware that the entire income tax remissions by every american every year is not enough to pay the interest to the FED

Hi LOS,

I had thought the US gov't was issuing the debt, not the Federal Reserve. If that's true, did you mean that the income tax remissions from all Americans is not enough to cover the interest on the US gov't's debt?

If that was it, the most recent numbers I have (2006), say that personal income taxes made up 39% of the US gov't's income, or roughly US$939bn. Net interest on the debt was 8% of US gov't outlay, or roughly $212bn. I guess things may have changed a bit in 2007, but even allowing for this income taxes would seem to be enough? Or am I missing something...

Thanks, Misty

[LivinLOS]

Yes the fed is a private bank.. Yes the fed 'creates' money from nothing.. yes the fed then charges the US interest on that money. In 1984 the Reagan administration did a study and concluded BACK THEN !!! that the entire income tax budget of the US was not enough to pay the interest on that debt.

http://zfacts.com/p/461.html

A brain melting 9.5 trillian (almost).. It only crossed 9 last nov !!

[PeaceBlondie]

You are aware that the entire income tax remissions by every american every year is not enough to pay the interest to the FED

Hi LOS,

I had thought the US gov't was issuing the debt, not the Federal Reserve. If that's true, did you mean that the income tax remissions from all Americans is not enough to cover the interest on the US gov't's debt?

If that was it, the most recent numbers I have (2006), say that personal income taxes made up 39% of the US gov't's income, or roughly US$939bn. Net interest on the debt was 8% of US gov't outlay, or roughly $212bn. I guess things may have changed a bit in 2007, but even allowing for this income taxes would seem to be enough? Or am I missing something...

Thanks, Misty

Agreeing with Misty. The official national debt, borrowed on the books, is about 9 trillion, dating back to unpaid debts from world war one. Using proper governmental accounting methods, it would be 53 trillion last year, including unfunded liabilities. Total income tax remissions include the taxes on net income from corporations. What cannot be repaid is the real debt that will come due by 2025 or later, after Medicare bankrupts.