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COMMENTS:
The current administration seems determined to drag the U.S. into an economic trough. While certain analysts paint the economy as 'promising', the reality is much starker. The collapse will coincide with a terrorist attack or another similar cataclysm. Sorry to be so doom-laden, but that's the way it's looking for the future.
The agenda has been carefully planned and will be savagely executed. In order for the NWO to reach its goals, America has to be weakened from within and from without.
Oops ... I missed some transition: Krugman has looked at these numbers and says Yes ... that corrections may start as early as 2005.
Hopefully he is right, but the U.S. can't continue to spiral into debt and wage never-ending war without something going pop.
Sorry for teh imprecision ... "corrections" means repercussions for the bad fiscal policies ... that is when the floor starts going out from under us.
Oh! :o)
I was thinking in a completely different context...
He agrees with you ... and says the "pop" is coming soon.
It won't get any better anytime soon. This President is incapable of making tough choices.
Scary stuff.
My parents, who live half the year in England, are already feeling the crunch of a weak dollar.
by mojo on Wed Nov 17, 04 2:02pm
[+]
Super Inflation
Worthless Money
Time to buy Silver, Gold, Cocaine and a Strip Club--they are impervious to inflation.
The weak dollar is good news for British consumers, we can now get $1.83 to the pound.
However, in the long run, a weak dollar is bad news, especially for exports etc.
It's things like this that make me glad Kerry didn't win ... Bush caused it: Let him take the heat for the results.
The dollar's decline means that the value of foreigners' investments in U.S. stocks and bonds -- measured in their own currencies -- is also dropping. So foreigners stop buying U.S. stocks and start selling what they have. The stock market drops sharply.
Result: the makings of a global recession.
Thanks, George.
US currency ist kaput. Euro is da king naw.
One of the most alarming answers comes from Paul Volcker, Alan Greenspan's immediate predecessor as chairman of the Federal Reserve. He recently said that he thought there was a 75% chance of a currency crisis in the United States within five years.
There is definitely an issue about American curency. I don't think that Paul Krugman is the best source of Economic information though. He really is a political agitator and even though he teaches at Harvard, he doesn't publish academically, and virtually no non-ideologically driven economists support his views.
A huge concern is the falling dollar to foriegn currency. The European Central Bank is really pissed off right now because the debt funding is coming out of the world's pocket and not ours. We are consuming at a level that will never be sustainable apart from another huge growth rate like that of the IT-spawned irrational exuberance. Right now exports are up for the US while the imports from Europe is falling because there money cost so much more compared to ours.
The biggest problem right now is that the Yuan is pegged to the US dollar. That means that the Federal Reserve is basically the Central Bank for the Chinese too. The problem with that is that China's annual GDP growth has been consistent at about 9% a year for a while now. Whereas Americas rate of growth in GDP is far lower, at approximately 4%. The monetary policy in China needs to be much more aggressive than ours is to cool the heat of the Chinese growth. The problem is that the Chinese Central bank has just been reorganized and they just raised interest rates for the first time in 9 years!!! If the Chinese decide to "peg" their Yuan to the Euro it would definitley be disastrous. What has been forestalling a dollar problem has been the support of mainly Asian central banks to purcahse huge reserves of American currency to help stabilize it. This type of purchasing, if it were to continue would be tantamount to investing in real assets that you know are going to fall in value almost immediately. No one wants to do that, especially Asians--since they have already done it.
A couple of points. The dollar is controlled with monetary policy. That is the Fed Chief Alan Greenspan. Bush controls fiscal policy.
At 1.83 sterling per $1 the only advantages there would be if you were to come and visit here. Your money is only more valuable here. Not in your homelands. The collapse of the dollar would more like cause deflation not inflation.
A weakening dollar is good for America right now, and bad for everyone else. US exports will be much cheaper, your imports will be too expensive.
To be happy that the pound or Euro are king is to ignore motivations. The European Central Bank is really rattling the saber at Greenspan to do something aobut it. The Americans are basically saying forget it. Greenspan and Bush want this to happen. So knowing some of the political bents this is something you should be opposing. There is a great article about exactly this in the current issue of the Economist.
The weakening dollar is not good for America, cc. It is good for government (reduces real impacts of deficit) and good for corporations (mor eimports).
It is BAD for American people, as it means they work more to get less buying power.
We are headed down the rathole. When so-called "fiscal conservatives" start to behave like sorority girls with daddy's credit card, the nation is in trouble.
Sorry Krugman is at Princeton not Harvard. Same thing though he is a political agitator and not an econmist.
Cathexis you are wrong. A weakening dollar is weak abroad, not at home. The only way for purchasing power to be reduced here would be if there was inflation. Which their is not.
The dollar is weak compared to foriegn currencies.
Inflation doesn't mean you work more pay for less. It means that money is simply less able to purchase what it puchased before.
I think that you are right to be concerned with the dollar. But there are far more important issues. Like the Congress giving Bush a blank check. I can't argue for his fiscal policies because they often make little sense. The Republicans used to stand for budget deficit reduction when the Democrats were spending on social engineering. But now that they are firmly ensconced they seem to have forgotten their forthing at the mouth about deficits. But the rank and file haven't forgotten. This is probably one area where we will agree despite our political differences.
Yet the fact that you quote Krugman is disturbing. The reality is that he is interested in fear mongering to advance his political agenda. It seems to work on you.
Seeinga s how the US imports most of its goods, I suggest thattranslates into weakened purchasing power for Americans, cc.
I can't dismiss the falling dollar, but combined with the rest of the existing fiscal policy ... it all sucks in a major way, trying to say what sucks most is an academic endeavor.
I'm glad you at least value your fiscal conservation over partisan politics. Good to see someone holding to some kind of integrity.
cathexis, both the right and left are filled up with people with integrity. yet they both sell that down the drain for money. I think in the past you have talked about the uselessness of political parties and i am begining to agree.
The Congress really pissed me off with giving Bush up to a trillion more dollars without oversight. They are not supposed to be a rubber-stamp for the President the are supposed to provides checks or balances or both.
I have to agree. No one should want one party -- even their own -- to have total control of two or more branches of government.
I have always felt that if the presidency is Repub, then it would be best to have the House Dem, and vice versa. That way there can be effective checks. Right now the Repubs are busy trying to assassinate the character of Specter. They are starting to feed on their young.
With Bush talking up a strong dollar but secretly encouraging weakening, a currency debacle is likely. Indeed, the dollar may have to sink another 20% for the current account to be sustainable. The events Greenspan warned of last week would force the Fed to jack up interest rates to make investing in America more attractive. That, in turn, could cause a recession in the United States, with worldwide repercussions. Asia and Latin America could be hit hard. Their exports to America would slow. And since oil is priced in dollars, if their currencies rise versus the greenback, their oil imports would become more expensive. Also, if U.S. interest rates rise, they will suck funds out of emerging markets.
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