The Falling Dollar - Whose Fault Is It?

[pistonpilot]

Who do you really think is to blame for the falling dollar and the US economy as a whole?

[PeaceBlondie]

Families with a net worth over US$5,000,000

[LivinLOS]

Greenspan without a doubt..

To soften the blow of the stock market problems greenspan pumped credit into the market with the intention to stimulate the economy and try not to burst the stock bubble..

This in turn lead to cheap home finance and people taking out equity from thier homes as house prices took an alternative bubble.. So while people (with no insight) see rising house prices they think they are getting richer.. In fact if they wish to live in the house they want these houses are costing more and they are getting poorer.. For example somone has 100k and borrows 100k on a house.. The house price raises (say 300k) so they sell out and have 200k surplus in real cash.. So what do they do.. They buy a 500k house.. The 'feel' richer.. They have higher property taxes and they now owe 300k.. They are in fact 3 x poorer but thats not the psychology..

Then we have the other home owners who dont want to move.. They bought a dwelling for life at 500k.. The morgate was 250... The house price has risen way up and is now worth 1 mil.. So the remorgate at super low interest and 'withdraw equity' I love that moronic phrase.. Its borrowing money fools.. so they take out a 500k cash to spend on lifestyle SUV's chinese DVD's etc etc etc.. This consumer spending is greenspans idea to kickstart the economy (more on this later)... So now mister and misses home owner now owe 750k on their property.. So what its worth a mil and going up (how many times have I heard property always rises.. again fools)...

So interest rates rise.. The debt burdern becomes too big.. Forces sales start to happen.. the market cools.. These people who had a nice home and only 250k of manageable debt now have a 3 year old SUV, some electrical crap thats worth nothing a 750k of unserviceable debt..

Back to the consumer spending the economy healthy.. I try to look at countries economics like personal econimics.. If you met a man in the boozer and he said things were not going well.. His job was looking shaky, his payments were not what he thought they would be last year etc.. Would your advice be to borrow money on all his available assets and buy stuff ?? Well thats the greenspan approach to recover.. Borrow to spend and in turn create economic stimulus. Its laughable on a personal level (its only slightly less laughable on a country level) what everone seems to forget is the US is in a major trade deficit.. They are buying all these good that are supposed to stimulate the us ecomomy from overseas !! so Amercian are digging themselves into a debt hole and the ones loaning the money and selling the goods are the Chinese and Japan (plus a host of others but you get the picture)... So its the consumer getting into hock (and hocking his available assets) to give that money to overseas contries..

Thats bad to begin with but one thing you forget is that when those countries buy US paper to hold thier store of wealth it remains in the us but with a slide of the magnitude currently happening and that slide having no fundamentals to stop it why would they want to buy 5% perfroming paper in a 30% falling currency.. They are not fools (###### they are the ones making the widgits the yanks are lapping up on cheap credit)..

If this was a person on a pre Christmas credit card binge we all know come january he is going to see his statements and shit himself at how to pay those debts.. This is the result on a contry wide scale to Greenspans easy credit and knock on house price bubble (and more easy credit and equity witdrawl) and when rates rise expect to see home values crash.. Increased credit costs to the cosumer.. Increased home finance costs.. Increased forclosures and default sales.. massive bancruptcy and masses of false (valued) wealth wiped out..

Alan 'bubbles' Greenspan softened the blow of the stock market meltdown by letting people feel that despite stock losses thier home values have been making up for it.. This is a lie brought on by cheap credit (when inflation is taken into account free credit really).. You simply cant spend yourself richer..

Edited December 25, 2004 by LivinLOS

[LivinLOS]

I strongly advice anyone who actually enjoys this to sign up the funny and free email newsletter called 'The daily reckoning' (and buy thier simple to read and irreverant 'Financial Reckoning day').. I find the UK version pulls less punches than the us version.. All on thier site..

Its a very irreverant, funny, contrarian newsletter packed with stats that are normally spun in an entirely different light.. Its worth it for the Magambo Guru commentaries alone.. Priceless..

From the same

We still cannot look into the future, but at least we

can read yesterday's news. And yet another buffoon in

the IHT trumpets the period of "sustained and balanced

growth" in the US...the same period in which Americans

were mortgaging their homes to buy goofy tech

stocks...while Mr Greenspan's E-Z credit created a mock

boom all over the world. Americans spent so much and

earned so little, that it took 80% of the entire

planet's savings to keep the thing running. The

Chinese, for example, earn an average of 61 cents an

hour. Americans earn 25 times as much. But it is still

not enough to keep them living in the style to which

they have become accustomed; they have to borrow from

the Chinese just to keep going.

And if you want to really read doom and armegeddon thoughts filter out the commentaries at Kitco.. Some gems in around the madness on there too...

Lastly the root of the dollars decline was nixon closing the gold window and making it a 100% fiat currency but that not a voting option.

Anyway I am off for my chistmass dinner.. Merry Christmas a nd a properous new year to all.. As was stated in another thread, there is no need for any discord in these discussion as I for one love to listen to articulated ideas on these topics.. Its the 'cuase it just wont' brigade I have trouble with..

Edited December 25, 2004 by LivinLOS

[jjrbus]

Very well put LivininLOS, I agree 100%. I see my US pension is going to become worth less and less. I also see my savings going down. But I cannot really figure out what to do about it?

[theonlyway]

Who do you really think is to blame for the falling dollar and the US economy as a whole?

<{POST_SNAPBACK}>

If you think it any 'one' person you are living in some kind of a dellusion.

America has its ups and downs the same as any other country... Was it 1939 when the world thought America was 'doomed'. What about Japan and Germany 1944-5. Russia's collapse in recent years... and the list goes on...

There is no doubt that China will try to bankrupt the USA. The Chinese are aiming to be number one world power in the next 15-20 years. This is no secret to the rest of the world. Now Europe are uniting, also to ward off the 'silent' threat of China. Russia is working hard also towards strengthening and rebuilding after their not to distant collapse.

Now think on this... China or America? Which country do you think the rest of the world 'minor-powers' would want to be No. 1 World Power? Do you think the UK would want the Chinese to be Number One? Europe? Russia? Israel? Australia? Canada? Turkey or Even the Arab States? It will be China and the Muslim 'extremists' is all, against the rest of the world.

Ok, so America may not be the rest of the world's favorite country right now... but I am sure it will be a case of 'Better the Devil you know' and it will be China against the rest of the world... in the race for Supremacy. And I for one, do not think they will win. When the 'reality' starts to sink in... the world will be backing the USA. You will see the dollar rise and keep on rising again.

My best guess is that China will 'burn out'... running too fast... not quick enough in thier 'organisation' of such massive progress... But failing all else, China will make a mistake and try moving in on another country... or 'seen' to be, or 'set up' to be... and then all HeII will break loose... and most of China will be no more...

<{POST_SNAPBACK}>

hahhhaaaahaa!!

good one!

keep dreaming!

china owns america with its dollar reserves and can dump them all in a second which would collapse the dollar and us economy.

china has the worlds investors swarming into its market and leaving americas fat illiterate bankrupt one.

china and russia and europe are already strengthening all ties and japan and south asia and the middle east will follow.

america is a dying collapsing desperate rome and the barbarians at the gates is the whole world.

america is doomed in more ways than one!

america is now facing its perfect storm!

hatred by the worlds people and media!

bankruptcy and dollar dumping!

fat illiterate violent society!

thousands of terrorists and nukes and viruses are already in america!

the worlds bully filled with ugly americans will be exterminated off the planet and the whole world will watch on tv and celebrate!

the worst country ever born with the shortest bloodiest most shameful history filled with the lowest humans genetically created from the worlds wretched refuse and rejects will be just a blip on the world history chart.

but i will will really miss the bachelor and temptation island and jerry springer and big macs and britney spears and michael jackson and oj simpson and tonya harding and joey buttafuoco and scott petersen and women that kill pregnant mothers to rip the babies from their wombs and abu gharaib and military invasions and bombings of poor peoples and ....

MWAHAHAAHHAHAHAHHAHAAAAAA!!!!

Edited December 25, 2004 by theonlyway

[cdnvic]

I hate to be judgemental newbie, but you're a &lt;deleted&gt; moron.

Isn't there some knitting you should be doing right now?

cv

Who do you really think is to blame for the falling dollar and the US economy as a whole?

If you think it any 'one' person you are living in some kind of a dellusion.

America has its ups and downs the same as any other country... Was it 1939 when the world thought America was 'doomed'. What about Japan and Germany 1944-5. Russia's collapse in recent years... and the list goes on...

There is no doubt that China will try to bankrupt the USA. The Chinese are aiming to be number one world power in the next 15-20 years. This is no secret to the rest of the world. Now Europe are uniting, also to ward off the 'silent' threat of China. Russia is working hard also towards strengthening and rebuilding after their not to distant collapse.

Now think on this... China or America? Which country do you think the rest of the world 'minor-powers' would want to be No. 1 World Power? Do you think the UK would want the Chinese to be Number One? Europe? Russia? Israel? Australia? Canada? Turkey or Even the Arab States? It will be China and the Muslim 'extremists' is all, against the rest of the world.

Ok, so America may not be the rest of the world's favorite country right now... but I am sure it will be a case of 'Better the Devil you know' and it will be China against the rest of the world... in the race for Supremacy. And I for one, do not think they will win. When the 'reality' starts to sink in... the world will be backing the USA. You will see the dollar rise and keep on rising again.

My best guess is that China will 'burn out'... running too fast... not quick enough in thier 'organisation' of such massive progress... But failing all else, China will make a mistake and try moving in on another country... or 'seen' to be, or 'set up' to be... and then all HeII will break loose... and most of China will be no more...

hahhhaaaahaa!!

good one!

keep dreaming!

china owns america with its dollar reserves and can dump them all in a second which would collapse the dollar and us economy.

china has the worlds investors swarming into its market and leaving americas fat illiterate bankrupt one.

china and russia and europe are already strengthening all ties and japan and south asia and the middle east will follow.

america is a dying collapsing desperate rome and the barbarians at the gates is the whole world.

america is doomed in more ways than one!

america is now facing its perfect storm!

hatred by the worlds people and media!

bankruptcy and dollar dumping!

fat illiterate violent society!

thousands of terrorists and nukes and viruses are already in america!

the worlds bully filled with ugly americans will be exterminated off the planet and the whole world will watch on tv and celebrate!

the worst country ever born with the shortest bloodiest most shameful history filled with the lowest humans genetically created from the worlds wretched refuse and rejects will be just a blip on the world history chart.

but i will will really miss the bachelor and temptation island and jerry springer and big macs and britney spears and michael jackson and oj simpson and tonya harding and joey buttafuoco and scott petersen and women that kill pregnant mothers to rip the babies from their wombs and abu gharaib and military invasions and bombings of poor peoples and ....

MWAHAHAAHHAHAHAHHAHAAAAAA!!!!

[theonlyway]

I hate to be judgemental newbie, but you're a &lt;deleted&gt; moron.

Isn't there some knitting you should be doing right now?

cv

poor canucks!such hosers or losers,eh?

as america goes so will its 51st state!

no more molsons and labatts-the canucks contribution to world culture!

BWAHAHAHAHAHHAAAA!!!!

Who do you really think is to blame for the falling dollar and the US economy as a whole?

<{POST_SNAPBACK}>

If you think it any 'one' person you are living in some kind of a dellusion.

America has its ups and downs the same as any other country... Was it 1939 when the world thought America was 'doomed'. What about Japan and Germany 1944-5. Russia's collapse in recent years... and the list goes on...

There is no doubt that China will try to bankrupt the USA. The Chinese are aiming to be number one world power in the next 15-20 years. This is no secret to the rest of the world. Now Europe are uniting, also to ward off the 'silent' threat of China. Russia is working hard also towards strengthening and rebuilding after their not to distant collapse.

Now think on this... China or America? Which country do you think the rest of the world 'minor-powers' would want to be No. 1 World Power? Do you think the UK would want the Chinese to be Number One? Europe? Russia? Israel? Australia? Canada? Turkey or Even the Arab States? It will be China and the Muslim 'extremists' is all, against the rest of the world.

Ok, so America may not be the rest of the world's favorite country right now... but I am sure it will be a case of 'Better the Devil you know' and it will be China against the rest of the world... in the race for Supremacy. And I for one, do not think they will win. When the 'reality' starts to sink in... the world will be backing the USA. You will see the dollar rise and keep on rising again.

My best guess is that China will 'burn out'... running too fast... not quick enough in thier 'organisation' of such massive progress... But failing all else, China will make a mistake and try moving in on another country... or 'seen' to be, or 'set up' to be... and then all HeII will break loose... and most of China will be no more...

<{POST_SNAPBACK}>

hahhhaaaahaa!!

good one!

keep dreaming!

china owns america with its dollar reserves and can dump them all in a second which would collapse the dollar and us economy.

china has the worlds investors swarming into its market and leaving americas fat illiterate bankrupt one.

china and russia and europe are already strengthening all ties and japan and south asia and the middle east will follow.

america is a dying collapsing desperate rome and the barbarians at the gates is the whole world.

america is doomed in more ways than one!

america is now facing its perfect storm!

hatred by the worlds people and media!

bankruptcy and dollar dumping!

fat illiterate violent society!

thousands of terrorists and nukes and viruses are already in america!

the worlds bully filled with ugly americans will be exterminated off the planet and the whole world will watch on tv and celebrate!

the worst country ever born with the shortest bloodiest most shameful history filled with the lowest humans genetically created from the worlds wretched refuse and rejects will be just a blip on the world history chart.

but i will will really miss the bachelor and temptation island and jerry springer and big macs and britney spears and michael jackson and oj simpson and tonya harding and joey buttafuoco and scott petersen and women that kill pregnant mothers to rip the babies from their wombs and abu gharaib and military invasions and bombings of poor peoples and ....

MWAHAHAAHHAHAHAHHAHAAAAAA!!!!

<{POST_SNAPBACK}>

<{POST_SNAPBACK}>

[cdnvic]

I hate to be judgemental newbie, but you're a &lt;deleted&gt; moron.

Isn't there some knitting you should be doing right now?

cv

Then again, I may have given you way too much credit.

cv

[mbkudu]

There is no doubt that China will try to bankrupt the USA.

[/quote Ravisher]

Don't think so. The USA is the biggest mass consumer of 'Chinese Junk' on the planet. If the USA goes belly up, China will lose billions in potential export revenue.

China needs the USA as much as the USA needs China (cheap labor). It is a symbiotic/parasitic relationship; each one bleeding the other.

[LaoPo]

There is no doubt that China will try to bankrupt the USA.

[/quote Ravisher]

  Don't think so. The USA is the biggest mass consumer of 'Chinese Junk' on the planet. If the USA goes belly up, China will lose billions in potential export revenue.

China needs the USA as much as the USA needs China (cheap labor). It is a symbiotic/parasitic relationship; each one bleeding the other.

<{POST_SNAPBACK}>

Sorry Ravisher, but I agree with mbkudu.

I not only hope but also think you'r wrong here. I don't know when you've been in China for the last time but let me tell you that there are quite a few very intelligent

leaders (dozens of millions!) overthere who know what they are doing, although they still can learn a lot about 'human rights'.

The leaders in Beijing are very well aware that China needs the world (and the US) since they are intelligent enough to realize they (by far) can't beat the US in any way for the next 2 or 3 decades to come.

The only thing they want is make money and improve the immense poverty in the country-side.

They already started to give land to the (extremely poor) farmers in order to let them grow vegetables, grain and other products which they sell on the free market. And guess what happens now? People (boys and girls) who moved to the cities in order to try to improve the quality of their lives, already start going back (indeed on a slow scale) since they see the opportunities and are no longer willing to work for low wages in bad circumstances in the cities and their factories.

They rather try to help their families. You know the family ties in China are very very strong and the young ones do everything to help their parents. That's different 'cake' than we are used to in the Western hemisphere...!

I think the Chinese are too 'wise and intelligent' to even think about becoming a so-called World Power Nr. 1.

They're only interested in improving the quality of life (read: money) and not becoming a World Power who want to take it up against the most powerful country (USA) in the world.

Indeed, they need each other, one way or another.

Apart from that, we should never underestimate the enormous economical/labour power of the Far East countries who in total have more than 60% of the total of the Earths' population.

Personally I think that World Power Nr. 1............is.........INTERNET.

Apat from smaller scale local 'wars' I don't think any country would try to even challenge the USA.

LaoPo

[mbkudu]

The popular words, 'Gung Ho,' used by US GIs the world over means, literally in Chinese, 'work together.'