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IS THE U.S. GOVERNMENT PRINTING TOO MUCH MONEY ?

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[+] serious ballot by thesoothsayer

Okay, I know the Federal Reserve Bank actually prints and issues the money, but I am refering to the overall effect of what may happen when a mirade of actions occur simultaneously...first, we have a very costly war(s) going on, ( The U.S. administration is spending about $7 billion a month to wage the war on terror and costs could total $570 billion by the end of 2010, assuming troops are gradually brought home, a congressional report estimates) then there's costs associated with Katrina and Rita, Then, there's outsourcing of jobs, (which effects consumer spending) coupled with illegal employment, (which results in monies transfered to other Countries to support relatives, etc, and we have supposedly conservatives who avow "deficits don't matter"...I don't profess to be an accountant or banker or financial wizard, but I know if I were to run my houshold based on these sort of principles, I would soon be homeless...the Canadian dollar is now equal to the U.S. dollar, and according to some experts on Bloomberg TV, there seems to be dumping of U.S. dollars all over the world...there are many countries that are flooded with U.S. currency due to trade imbalances...then, there's the home mortage loan debacle...I recall one economic class which suggested ghettos are ghettos due to more money flowing out than coming in...what do you think, are we digging a financial hole which will be nearly impossible to fill, based on how we are responding to the current situations on hand ?

Yes, we are printing too much money
No, we can print as much as we like
The U.S. economy is the best in the World
It's time to rearrange our priorities before it's too late
It's too soon to determine this
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COMMENTS:
Voted : It's time to rearrange our priorities before it's too late
Health care, economy, then a diplomatic solution to this war, in more-or-less that order.
Voted : Yes, we are printing too much money
yes absolutely.

it's getting embarassing carrying US dollars these days, just look at the foreign exchange.

econ101: print more money, inflation comes. sooner or later.

people are already feeling it, when they go to walmart and the chinese shirt they used to buy for $5 is suddenly $7.

it's going to trickle up real fast.
by LCD [+]

another troubling trend is oil producing Countries turning away from the U.S. dollar as the de facto money to buy oil and to the Euro...and this can't be good...
No, because they aren't. They are only printing money to meet demand and every country prints money all the time. Example, when they take money out of circulation.

A currencies value is not nearly as important as many believe. For example, the Bush administration has a "weak dollar" policy, which unlike previous administrations, means they prefer it to lose value.

Are you aware that Canada's currency has not gained as much value as the dollar has lost? In other words, it's gone up against some other currencies, but barely. It's risen against the U.S. dollar in the sense that the dollar has lost value. And yes, there is a huge difference.

You're implying we are printing money to cover what?? If that were the case, we'd never have budege shortfalls and there'd never be a budget deficit. See the point? So they're not "just printing money."

Secondly, the Euro is over-valued now and that worries the European Central Bank. Same for Canada. Since their currency is reaching partiy with ours, it will have an adverse effect on their exports to the United States, which is their largest trading partner. Our exports to them will surge, while theirs to us and the rest of the world will plummet.'

Take the Euro. They're losing billions in tourism and retail revenue because their currency is over-valued, which is why the European Central Bank is weighing an intervention.

If you want to know why we have trade imbalances, it's directly because that in all the years past, foolish novices believed that a strong currency was somehow a thing to be proud of. So we had a "strong dollar" policy and it hurt us beyone belief.

As for currency reserves, currency is traded non-stop all around the world daily. The reason why so many countries have huge stock piles of U.S. dollars is because we pay for the goods in dollars and because it is one of the Reserve currencies. It has not been the only reserve currency in many, many years. But you don't hear that on CNN. The Yen, the Pound, the Dollar and now the Euro are all currencies most nations keep in large reserves. It's not "dumping" dollars per se, as much as it is reducing their exposure to holding a currency that has lost value.

And in reality, yes, this administration has very unsound fiscal policies that have left us exposed on many levels. It's not good, but it's hardly so drastic.

And LCD, if you're embarassed to carry U.S. dollars, I'll take it off your hands :) Are you travelling abroad a great deal? You can't be embarassed to carry them in the U.S., since we all pretty much do.

another troubling trend is oil producing Countries turning away from the U.S. dollar as the de facto money to buy oil and to the Euro...and this can't be good...
by thesoothsayer on Thu Sep 20, 07 6:01pm


Another example of bad information. Oil is only priced in U.S. dollars. It has not been traded only in U.S. dollars for a long, long time. Most countries that import or export large quantities of oil have always used a "basket of currencies" to actually pay for the oil. Again, the Yen, the Dollar, the Pound and now, the Euro.

Voted : Yes, we are printing too much money
Of course
Voted : It's time to rearrange our priorities before it's too late



It's the smug mentality assuming nothing is changing while everything is shifting is why some day reality just might smack you in the face...the U.S. is running huge trade deficits which are financed by borrowings from the central banks of Asia -- mainly the Chinese and the Japanese ( and don't forget to include Taiwan, South Korea, and many Oil Producing nations). All the world's central banks are chock-full of US dollars -- they're holding many more dollars than they really want. They're holding those dollars because at the moment there's no great alternative and also because the global economy depends on US consumption. If they dump the dollar and the dollar collapses, then the whole global economy is in trouble. It doesn't take any great stretch of the imagination to see what could happen if one of these central bank managers decides to dump dollars. We had a situation recently when a mid-level official at the Central Bank of Korea used the word 'diversification'. It was a throwaway remark at some obscure lunch, but there was instantaneous overreaction. The US stock market fell by 100 points in 15 minutes because the implication was that South Korea might be shifting out of US dollars. So picture this: you have a quiet day in the market and maybe some smart MBA at the Central Bank of Chile or someplace looks at his portfolio and says, 'I got too many dollars here. I'm gonna dump $10 billion'. So he dumps his dollars and suddenly the market thinks, 'My god, this is it!' Of course, the first guy out is OK, but you sure as hell can't afford to be the last guy out. You would then see an immediate cascade effect -- a world financial panic on a scale that would dwarf the Great Depression of the 1930s. (These are excerpts from Three Billion New Capitalists by Clyde Prestowitz.)***today, the New York Times news service has a news storytoday on this very subject - Global markets dumping U.S. dollars, there is an alternative currency emerging and, along with bad fiscal planing, along with disenchantment with U.S. policies this trend may well continue to grow...misinformed, no, perhaps you should do more current research on this ongoing problem...this reminds me of the cavalier attitude when the Japanese first began importing stuff to this Country, I distinctly remember small transistor radios and cheap toys, so what, then cars, big deal, we are the biggest best there ever was or will be...look at the picture now, even North Korean cars and someday Chinese cars will be perfered to domestic models if things don't change, you should never draw conclusions based on what was, things change and when Countries (or companies) don't forsee or prepare or have contingency plans for them they may have regrets...

**even South Korean cars**




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