How Long Before The Usd Is Trading For 10-15 Thb ?

[el jefe]

U.S. Savings Rate Falls to Depression-Era Levels: Chart of Day

Jan. 6 (Bloomberg) -- Government deficits have caused the U.S. savings rate to turn negative for the first time since the Great Depression, and the gap is widening even as households and companies put away more money than ever before.

The CHART OF THE DAY shows net savings, adjusted for depreciation and changes in the value of business inventories, as a percentage of gross income. This rate is provided by the Commerce Department on a quarterly basis since 1947, when the chart begins. Annual figures go back to 1929.

The savings shortfall widened to negative 2.3 percent in the first three quarters of last year from negative 0.2 percent in all of 2008. Before 2008, there hadn’t been a full-year drop since 1934, the last year of a four-year period when rates were below zero.

Deficit spending by the federal government reduced net savings at an annual rate of $1.33 trillion during last year’s third quarter. State and local government deficits widened the gap by another $14.9 billion. At the same time, personal and corporate savings increased by a record $983 billion.

Health-care outlays represent “the key for savings” in the next few years, according to Michael Mandel, president of South Mountain Economics. The former chief economist at BusinessWeek magazine -- now owned by Bloomberg LP, the parent of Bloomberg News -- published a similar chart two days ago on his Innovation and Growth blog.

“The U.S. will be stuck between a rock and a hard place” if costs keep soaring, Mandel wrote yesterday in an e-mail. “If health-care reform manages to restrain spending, then we’ll see net national savings eventually head upwards.”

(To save a copy of the chart, click here.)

To contact the reporter on this story: David Wilson in New York at [email protected]

Last Updated: January 6, 2010 11:00 EST

http://www.bloomberg.com/apps/news?pid=206...id=aexjnfkHISt0

First you wrote "American's savings rates are at the lowest since the end of World War II". Then you quote an article that states "... households and companies put away more money than ever before."

As I stated before there's a big difference between consumer spending, govt spending, and trade deficits. You're mixing all three concepts randomly.

[lannarebirth]

[TheItaliann]

Try reading the article and clicking the links to the .gov websites which will better explain to you why Net Savings is negative.

[Naam]

Never. The USD is the strongest currency in the world, also the US is the most politically stable country in the world, thats why.

PRAISE THE LORD!

[TheItaliann]

Brit,

Yes you are right that the whole world (except the individuals who make the smart investments now) will be hurting. The US will not fail and the rest of the world just keeps on tooting. It will most definitely be painful. Any solution to this problem has to revolve around America doing something to fix its trade deficit - but what is it supposed to do? --- or significantly reducing benefits to seniors but we just saw Obama's plans for the next ten years and even more social spending towards healthcare reform... Do you think this healthcare reform is going to create a significant dent in healthcare costs? i don't. a matter of fact, stocks rallied on the bill... more people covered for the same or higher premiums. we have obama's ten year plan and it calls for 10 trillion in added debt over that time.

if u just click on some of these links you will see US liability. in ten years the us gov will be spending 50% of its tax revenue on interest on its debt. the numbers will just keep getting bigger. i dont see how saying other countries will just have to keep buying this debt is a realistic long term solution.

[Lancelot]

China, on the other hand, is working hard to become less reliant on exports to the West.

China is still heavily dependent on exports to grow their economy and keep the teeming masses content...

[NovaBlue05]

Brit,

"...........the whole world (except the individuals who make the smart investments now) will be hurting.

Assuming you fall into the latter group, can you clue the rest of us in on some investments?

[hhgz]

"It is a mathematical fact that the USA is headed towards bankruptcy...."

Depending upon the statistic you are using, there are a dozen countries in worse financial shape than the US. Regardless, to answer your question, "not in your lifetime".

[TheItaliann]

Long Yuan and Gold

Short USD / UK Pound / Euro

Those are the safest simplest investments one can make imho

You want want physical gold not paper gold that isn't actually backed by gold which is the case with many of these american etfs

[lannarebirth]

Long Yuan and Gold

Short USD / UK Pound / Euro

Those are the safest simplest investments one can make imho

You want want physical gold not paper gold that isn't actually backed by gold which is the case with many of these american etfs

One may be long or short the $USD Index but with respect to those other currencies don't you need to be short against a given currency? If that's so, which currency is it? Unless you're using futures of course, but it's my impression most "forex" folks don't use futures.

Edited March 26, 2010 by lannarebirth

[Naam]

Long Yuan and Gold

Short USD / UK Pound / Euro

Those are the safest simplest investments one can make imho

You want want physical gold not paper gold that isn't actually backed by gold which is the case with many of these american etfs

please elaborate how you go long Yuan.

[britmaveric]

Physical gold will do you no good if no one can buy it. What would you get back with it -dodgy currency?

[TheItaliann]

keep thinking on it Brit! you buy an ounce for 1100. the price of gold doubles. you can sell an ounce for 2200.

you can buy yuan in china (Duh!) or you can buy Yuan etf's...sadly, i do not know of any interest barring yuan options.

u r right lann, with traditional shorts u need to pick another currency to short it against. i meant that broadly. run run run away from the USD.

Edited March 26, 2010 by TheItaliann

[britmaveric]

when the yuan tanks and it will.

Edited March 26, 2010 by britmaveric

[gregb]

don't put words in my mouth i never said. but today i say that my finances are on a diversified and solid footing. i don't deny that people can make a decent living in Thailand with an income of 1,600 dollars a month and achieving a 10% yield is possible too. but that is all relative (to each his own) and equivalent to the pocket money my wife draws.

your problem is that you are still a poor young boy and to compensate some complex you act as if you have ingested financial wisdom with a big ladle and call people like Krugman, Bernanke, central bankers et al idiots. with that behaviour you might impress some thai girlfriend but not even the most ignorant participant in this forum.

Naam, I have no idea if even half of the detritus coming out of your mouth is true, but I can honestly say that if $1600 USD is pocket change to your wife then you are quite clearly living in a world that 99% of us can not even fathom. I'm sure given that kind of income Bernacke and company are your personal friends and neighbours, so I would not expect you to be able to relate to those of us who actually live on a realistic planet. Luckily, there are enough posters here to balance out your pretentious bluster.

As for the USD hitting the range of 10 - 15 I seriously doubt it. The USD will most likely stay approximately where it is at for several more years. After that, there will then be global resource wars as countries fight for the dwinindling scraps of supplies that are left. Most of these wars will be in the Middle East and Africa, but I can imagine skirmishes spilling over into Europe, America and Asia. These wars will last for more than a decade.

After all of this is over, in about 2-3 decades, the US will collapse just like the old soviet union, and at that point the USD will be worthless, just like the old ruble was for a time. While this will generally be a time of great suffering, it will also have the advantage of cleansing the world of the quixotic economic theories that extraordinarily wealthy individuals believe to be reality. No amount of paper investments will help you during this period. Tangible commodities and gold will be the things to own. People will once again recognize wealth is defined by an ability to meet needs, rather than by some esoteric and largely ineffective paper accounting system.

I don't think there will ever be a time where the trading range is 10-15 THB. It will go from approximately where it is at right now to hyperinflation during the war years. The only real question is exactly what the time frame will be on each one of these periods. For sure though, being properly diversified in paper investments is not going to serve you well during the collapse.

[TheItaliann]

WASHINGTON (AP) -- A group of 14 U.S. senators unveiled legislation Tuesday that seeks to increase pressure on China to let its currency to rise in value against the dollar, saying Chinese "currency manipulation" is hurting the U.S. economy.

The bill calls for stiff trade sanctions if China does not act.

Treasury Secretary Timothy Geithner says the legislation is a sign of how strongly China's trading partners feel about the issue. In an interview on Fox Business Network, Geithner said that he believes Chinese officials "ultimately will decide it is in their interests to move."

Geithner declined to respond directly to a question of whether the Obama administration would support the bill backed by Sens. Charles Schumer, D-N.Y., Lindsey Graham, R-S.C., Debbie Stabenow, D-Mich., and 11 other senators.

"We are sending a message to the Chinese government," Schumer said in a statement. "If you refuse to play by the same rules as everyone else, we will force you to."

He said the issue is of critical importance at a time of high unemployment in the United States.

"There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China's currency manipulation," Schumer said.

American manufacturers contend that China's currency is undervalued by as much as 40 percent and is a big reason for the huge U.S. trade deficit with China, which totaled $226.8 billion, last year, the largest imbalance with any country.

A stronger yuan versus the dollar would make American products less expensive in China, while making Chinese goods more expensive for American consumers.

The Obama administration is hoping China will resume allowing its currency to rise in value against the dollar as a way of narrowing that gap. China allowed its currency to appreciate until mid-2008 when the global recession began to cut sharply into its exports.

The Senate bill marks the latest escalation in tensions between the two nations.

Chinese Premier Wen Jiabao on Sunday rejected American pressure on China to allow its currency to rise in value against the dollar, saying such efforts amounted to a kind of trade protectionism. His comments came after President Barack Obama in a trade speech last week said that China would make an "essential contribution" to rebalancing the global economy by moving to a more market-oriented currency regime.

On Monday, a group of 130 House members sent a letter to the administration urging the Treasury Department to cite China as a currency manipulator in a report that is scheduled to be released next month. The group also called on the Commerce Department to impose trade sanctions on China on the basis that its currency system is an unfair trade practice.

Asked about the upcoming currency report, which the administration is required to send Congress in mid-April, Geithner said it had not yet been decided whether to cite China as a currency manipulator.

Such a finding would trigger talks between the two nations with a threat of trade sanctions if the talks failed to resolve the issue. The Obama administration, following the lead of the Bush administration, has so far refused to cite China as a currency manipulator, believing that the more productive course would be to convince the Chinese that it is in their own interests to allow their currency to rise in value.

Geithner said he believes that China needs to realize its currency policy is "not just an issue between China and the United States, it's an issue for the world economy as a whole."

The issue is a complex one for the United States because China is the largest foreign holder of U.S. Treasury bonds. The United States must depend on foreign investors to keep purchasing those bonds at a time when it is running record federal budget deficits, including a $1.4 trillion imbalance last year.

[britmaveric]

Doom/Gloom from gregb, so 10yrs is the end again?

Funny thing is I heard the same thing 10yrs ago and it seems all is well.

[gregb]

Doom/Gloom from gregb, so 10yrs is the end again?

Funny thing is I heard the same thing 10yrs ago and it seems all is well.

All will continue to be well for eons. But there are global resource wars coming. If you choose to ignore that fundamental reality, you will suffer.

Gloom and doom is a pejorative term used by people who are afraid to look at fundamental realities. The religion of progress is just as much a fantasy as the gods of Olympus. I'm sure the ancient Greeks would have been spouting similar obscenities to anyone who dared to say their god was mythical.

As a matter of fact....Cassandra! Knock that off.

[Indo-Siam]

I think we will see dollar below 30 baht later this year, and maybe below 28 baht by late 2011. 20 baht by 2015.

I wish it were otherwise

[britmaveric]

^no worries your wishes will not stop the $ hitting say 40.

[flying]

^no worries your wishes will not stop the $ hitting say 40.

Oh winged horse of marble white take me on a magic flight

Edited March 26, 2010 by flying

[Naam]

you can buy yuan in china (Duh!) or you can buy Yuan etf's...sadly, i do not know of any interest barring yuan options.

then i know slightly more than you. NDFs (Non Deliverable Forwards) are indirectly bearing interest, presently 2.3% per annum. that is all what the market expects inspite of the big hoo-ha one can hear from some clowns in Washington.

[Naam]

Naam, I have no idea if even half of the detritus coming out of your mouth is true, but I can honestly say that if $1600 USD is pocket change to your wife then you are quite clearly living in a world that 99% of us can not even fathom. I'm sure given that kind of income Bernacke and company are your personal friends and neighbours, so I would not expect you to be able to relate to those of us who actually live on a realistic planet. Luckily, there are enough posters here to balance out your pretentious bluster.

luckily, i couldn't care less what you or anybody of the posters here (who don't know me personally) think about my financial status. i can assure you however that i know more than a handful of Thaivisa members who play in the same league as i do.

[jcon]

you can buy yuan in china (Duh!) or you can buy Yuan etf's...sadly, i do not know of any interest barring yuan options.

Yuan ETF? Disaster!

And as Naam pointed out re: "interest bearing options," here are the rates at the bank I use in HK:

CNY (Renminbi) Non-deliverable Forward

The information below is for reference only. Spot Date:30 MAR 2010 As at 26 MAR 2010 18:53:23 HKG

Bank Buy USD

Bank Sell USD

Valuation Date

Settlement Date

Bank Sell CNY

Bank Buy CNY

1 Month 6.8134 6.8256 28 APR 2010 30 APR 2010 2 Months 6.7999 6.8131 26 MAY 2010 28 MAY 2010 3 Months 6.7849 6.7991 28 JUN 2010 30 JUN 2010 6 Months 6.7459 6.7611 28 SEP 2010 30 SEP 2010 12 Months 6.6649 6.6781 28 MAR 2011 30 MAR 2011

So looks like just 2.02% for me (with the spreads - I'm sure Naam has access to a better spread - mid-market according to the above info is about 2.22%). And the rates indicate, as Naam pointed out, that (currently, and for 12-month forwards) this is what the market expects.

As for the "long Yuan, long Gold, short USD/EUR/GBP:" good luck with that, theitaliann.

Back on topic, I would expect USD/THB to have some intervention at 30, and then who knows. Either way, I like the THB for now.

britmav: I know you're just having some fun with the posters, but I'd buy you a beer if we hit 40 before 25 to the USD

Naam: Do you ever sleep!!!!????? Or is it the sausage dogs on rotation? That's Tchermann efficiency!

[jcon]

No edit button??? Well sorry folks, that NDF chart came out all wonky. If some mod could fix that for me, I'd appreciate it because I don't seem to have the ability to edit....

[ding]

Personal savings is up in the US and Corporate savings is up in the US. But when you add personal, corporate, and government savings as a % of US gross income, it fell into the negative in late 2008 for the first time since the great depression. Blame Bush Inc. for that. Clinton took us out of the red ink and restored us into the black. Also it was Reagan who took the US from the biggest lender nation to the biggest debtor nation -just to burst that bubble too sokal.

So, because firms and people are acting rationally and not spending, taxes will go up which will diminish that saved wealth. OR... the debt will go up. In the case of the latter, I remember Bush Inc. hiding the M3... The M3, IIRC, reports to financial markets how many dollars the US is putting into circulation. At some point the USD will find it's level just like water does, or just like counterfeiting does, in the world of fiat currency. No?

But the dollar would take the entire world with it if it fell. It wont collapse too much because it's tentacles are in every country. It will decline, I'd bet, but not crash to dust. China's bubble will burst, however, I'd bet on that too. I knew Japan was white hot and would burn out in the 90's... so I'm 1 for 1, yay me! The prime concern for peons like me is the corporate dominance over nation states' ability to balance their power and regulate their influence over all aspects of markets and commerce. I fear corporatism will destroy capitalism with its tendency to destroy governmental ability to regulate it.

China pegged the Yuan to the USD in 2008 and is about to get tagged as a currency manipulator. It's a flip of the coin, but that may set off a trade war with the US. US citizens are fed up with unemployment and the government needs tax revenues back badly. China is into the US like a drug addict. If we have a trade war, the US could reasonably tell China to forget repayment of debt. China owns 24% and Japan own 21% of the US debt. Japan would back the US in a zero sum game.

Grab tarp -this could get messy.

my 2 stang

Edited March 26, 2010 by ding

[Naam]

Naam: Do you ever sleep!!!!????? Or is it the sausage dogs on rotation? That's Tchermann efficiency!

i doze evey day from 13.00 to 14.30hrs and i sleep from 22.00 till 03.00 hrs next day.

[Naam]

you can buy yuan in china (Duh!) or you can buy Yuan etf's...sadly, i do not know of any interest barring yuan options.

Yuan ETF? Disaster! no comments , signed Naam

So looks like just 2.02% for me (with the spreads - I'm sure Naam has access to a better spread - mid-market according to the above info is about 2.22%). And the rates indicate, as Naam pointed out, that (currently, and for 12-month forwards) this is what the market expects.

i have no idea what my prevailing spreads are because i have no intentions to invest in CNY just because some confused rednecks who were sent by confused voters to Washington think they can force China to revalue or because some expert italian investors recommend it (no offence meant!)

[p_brownstone]

As a matter of fact....Cassandra! Knock that off.

A little Off-topic ....... maybe!

It's a common mistake to lable a "doomsayer" as a "Cassandra" .

According to Homers Illiad, Cassandra was the daughter of Khun Priam of Troy, blessed with the gift of Prophecy by the god Apollo, who loved her.

When she rejected Apollo he added a Curse to his gift, which made her always tell the truth - but be doomed never to be believed.

Patrick

[sokal]

Never. The USD is the strongest currency in the world, also the US is the most politically stable country in the world, thats why.

No its all about having the reserve currency status and the only reason they ever had it was because it was backed by gold.