Archived material Access restricted Article
Rantburg

Today's Front Page   View All of Sun 04/24/2011 View Sat 04/23/2011 View Fri 04/22/2011 View Thu 04/21/2011 View Wed 04/20/2011 View Tue 04/19/2011 View Mon 04/18/2011
1
2011-04-24 Economy
Dollar's Decline Speeds Up
Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.
Posted by g(r)omgoru 2011-04-24 06:02|| E-Mail|| Front Page|| [6479 views ]  Top

#1 As the dollar drops, watch the other trading countries come up with new and interesting 'regulations' and 'standards' to act as trade barriers to cheaper American produced goods and materials. Suckers.
Posted by Procopius2k 2011-04-24 09:41||   2011-04-24 09:41|| Front Page Top

#2 The young seem to believe the rhetoric out of Washington. I heard my son say that we should have the rich pay more taxes. This was unusual for him to say. I said several things to point him in the proper direction but how effective I was remains to be seen. The thought that others should pay is growing in this country unfortunately. During the riots here if you were perceived to have anything more than another you would have to give it up, one way or another.
Posted by Dale 2011-04-24 09:44||   2011-04-24 09:44|| Front Page Top

#3 Soros' Bretton Woods Conference Accelerates Push for New Global Economy
It’s been two weeks since George Soros bought himself a major economic conference designed to remake the entire global economy. Just because the event received little major news attention, it still had an impact Americans might be reeling from for years.

When the anti-American Soros spent $50 million creating the New York City-based Institute for New Economic Thinking(INET), he began a major move against the dollar. The billionaire who once crushed the British pound through currency trading openly declared his plans to “reform the currency system.” In the Machiavellian mind of Soros, the dollar needed to take a back seat and end its stint as the world reserve currency. “The dollar no longer enjoys the trust and confidence that it once did, yet no other currency can take its place,” he wrote in late 2009.

In 2011, he is already pushing aside the dollar. “The big question is whether the U.S. dollar should be the reserve currency; and, in fact, it no longer is,” Soros told Bloomberg. He’s not the only one. Nobel Prize winning economist and Soros buddy Joseph Stiglitz said he is arguing for “a global reserve currency.” Stiglitz, who also chairs the U.N. General Assembly on Reforms of the International Monetary and Financial System, called for a new “global system,” saying the current one is “fundamentally unfair because it means that poor countries are lending to the U.S. at close to zero interest rates.”

In the short time following the Soros-funded Bretton Woods event, the move against the dollar has gained momentum rapidly. Soros wrote in 2009 that “the rising powers must be present at the creation of this new system to ensure that they will be active supporters.” Here come those rising powers right now, singing the Soros tune.


Open borders and an open economy are open invitations for predators, some in pinstripes.
Posted by Zebulon Thranter9685 2011-04-24 09:59||   2011-04-24 09:59|| Front Page Top

#4 AH! at last the infamous #1(Prisoner TV series).
Mr P of 2K, Imports will decline?. I hope but the tentacles run deep into the fabric of this economy.
Consumer nation perhaps no more. That will throw a wrench into the domestic and world economies. Temporally however. Brazil. Chile, and Norway are booming and will get stronger while we flounder.
Posted by Dale 2011-04-24 10:00||   2011-04-24 10:00|| Front Page Top

#5 I believe the US is undergoing default by devaluation. The too-big-to-fail financial institutions are being supported by devaluation, the rest of us are paying for it. This is how the Mother of All Bailouts is playing out. Soros is just a convenient demon, but he is only taking advantage of this opportunity the US has provided him.
Click here for a nice graph of the value of the dollar compared to the cost of crude.
The alternative to devaluation would have been forcing the Pig Men to eat their bad loans whether or not it killed them. Can't have that, you know. On top of that the banking executives and the banks themselves have not been indicted for any of their many felonies. The rule of law is also being devalued.
Posted by Anguper Hupomosing9418 2011-04-24 10:18||   2011-04-24 10:18|| Front Page Top

#6 Things are never straightforward. "Black George" Soros (real name Schwartz György) hopes to become the great world tyrant, yet while he can make money, and endless schemes, he does not truly understand power, nor does he know that he is mortal. With his demise, the world will once again have a breath of fresh air.

As far as the economic situation in the world, the problem is less the damage that outright trillion dollar gambling has done, but that the gaming is allowed to continue without hindrance. Yet the solution to both is surprisingly easy.

By hook or by crook, the US will default on its debts. And while that prospect is horrifying to many, the truth is that it might be the most painless conclusion to much of this nonsense.

This is because US debt is not based on the core capital of its creditors, but the profits those creditors have earned by selling the US vast amounts of goods. So if the US defaults, while they will be out their profits, it will not be as devastating to them as if it took away their core money.

To show how nonsensical this is, much of the US trade deficit with China is in the millions of empty shipping containers, built in China to carry goods to the US, and too expensive to ship back empty, now rusting peacefully in the US. Each of those containers cost the US about $100,000, that we "owe" China.

Just outside the port of Los Angeles, over a million of these containers now rust. That can add up to some real bucks. But nobody cares.

So, with the stroke of a pen, the US tells China that they will not be paid for these containers. China spent a fortune to mine the ore, refine it into steel, and use that steel to build shipping containers. But in the process, it profited from mining, and it profited from making steel plants, that still remain even if the US defaults.

So while China will be upset with the US, and its economy will be upended for a while, in the long term it will recover, and still be strong.

And the US, on renouncing its foreign debt, while it will no longer get vast amounts of cheap goods from overseas, except in trade swaps, will have to rebuild its industries, which will do much to revitalize our economy.
Posted by Anonymoose 2011-04-24 11:02||   2011-04-24 11:02|| Front Page Top

#7 Wow so much economic stupidity on one page it's untrue.

I expect a little more sense.

If you think about a falling dollar as a pay cut, and then start thinking "wow that makes me more employable" maybe you should lower your pay some more?
Posted by Bright Pebbles 2011-04-24 11:49||   2011-04-24 11:49|| Front Page Top

#8 ..and so how did all those Chinese get employment to begin with?
Posted by Procopius2k 2011-04-24 12:52||   2011-04-24 12:52|| Front Page Top

#9 Soros must die. The sooner the better. Preferably in a horribly painful accident.
Posted by OldSpook 2011-04-24 14:01||   2011-04-24 14:01|| Front Page Top

#10 Looks like the US may have to go cold turkey, real bad-ass cold turkey, after all the Bernank finagling
China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings
Posted by tipper 2011-04-24 14:23||   2011-04-24 14:23|| Front Page Top

#11 Agreed, OS. But AH9418 is also correct. So long as there are opportunities, there will be opportunists.

Curious to see the Fed's first official press conference on the 27th. Turbo Timmy recently insisted there was "zero risk" of a ratings downgrade, while the S&P itself places that risk at 1/3. Something cooking? A surprise halt to the legalized counterfeiting known as QE2? I'll believe it when I see it.
Posted by RandomJD 2011-04-24 14:33||   2011-04-24 14:33|| Front Page Top

#12 I'm shorting Government Bonds and going long on torches and pitchforks. Sure winner!
Posted by Canuckistan sniper 2011-04-24 15:42||   2011-04-24 15:42|| Front Page Top

#13 Things are never straightforward. "Black George" Soros (real name Schwartz György) hopes to become the great world tyrant, yet while he can make money, and endless schemes, he does not truly understand power, nor does he know that he is mortal. With his demise, the world will once again have a breath of fresh air.

I don't think so. Once the socialist-lite folks pave the way, the heavies move in. The socialist path must be rolled up and incinerated, along with whatever channels of power allow it to happen, whatever form those "channels" happen to take.

As for the dollar's final value, it will depend on how long it takes those dollars to filter down through the pyramid and find their level of stability in the world stage. I know nothing about economy, but it seems to me that it should take on the order of two to four years after each infusion at the top for this money to make it out into the open. It seems to me that unless Obean et. al. manage to admit that all of their economic theory is based on crap, and can somehow artificially slow this process until after he is elected, many of his stimulii will be hitting the market about the time the next presidential election hits.

Of course, this is all assuming that they speak what is in their hearts, and is not based on some ulterior motivations.

Either way, this is all wrong and must be reversed. Any "halt" before a reverse is just a delaying action to increase the likelihood that we go into an irreversible decline. Deficits must not be halted, they must be turned into a surplus as soon as possible. The debt trend needs to be reversed now and paid off within the next eight years, and a short, simple constitutional amendment for the common citizen to understand for a balanced budged based on simple, honest accounting principles must be passed. War might be an exception, but not be allowed to be used for an excuse.
Posted by gorb 2011-04-24 16:59||   2011-04-24 16:59|| Front Page Top

#14 Schwartz Gyorgy should be put down and on his way down, he should be made to confess publicly about his crimes against humanity that he has never atoned for. He is not a lightweight anything, he is an evil SOB.
Posted by Fi 2011-04-24 17:04||   2011-04-24 17:04|| Front Page Top

#15 gorb: As for the dollar's final value
Zero. Well, the paper + ink.

it will depend on how long it takes those dollars to filter down
Nay, unless you mean the time to zero is uncertain.

on the order of two to four years after each infusion at the top
Average is two years. Weimar Ben is fully aware of this.

somehow artificially slow this process
That's the point of the current extend-and-pretend. There are different ways to rearrange the deck chairs on the Titanic, and so far they're choosing default-by-inflation.

many of his stimulii will be hitting the market about the time the next presidential election hits.
That's the only "good" news, especially if there is a QE3: unemployment won't budge and gas and food costs will be through the roof.

You said it, Canuck: go long pitchforks and torches! And maybe Hewlett Packard, heh.
Posted by RandomJD 2011-04-24 17:42||   2011-04-24 17:42|| Front Page Top

#16 I blame greedy, Wallstreet Anabaptists.
Posted by Besoeker 2011-04-24 18:10||   2011-04-24 18:10|| Front Page Top

#17 Who told you inflation makes unemployment!??

Oh everyone with the slightest memory of history.

If anything unemployment, underemployment and mal-employment (hiding unemployment by state hiring for non-jobs) will rise.
Posted by Bright Pebbles 2011-04-24 19:18||   2011-04-24 19:18|| Front Page Top

#18 Essentially, 'reserve currencies' underpin world trade.

Getting rid of the USD as the world's currency would crash the world's trading system, because there isn't a viable alternative.

We would go back to the 19th century when the British paid for everything in gold. And there isn't nearly enough gold to support the current levels of world trade.
Posted by phil_b 2011-04-24 20:04||   2011-04-24 20:04|| Front Page Top

#19 phil_b,
Essentially, 'reserve currencies' underpin world trade
Only since the Bretton Woods System, which seem to be unravelling by the day.
Getting rid of the USD as the world's currency would crash the world's trading system, because there isn't a viable alternative
There's always gold.

We would go back to the 19th century when the British paid for everything in gold. And there isn't nearly enough gold to support the current levels of world trade.
It's a pity more people are not aware of Richard Cantillion The Irishman who founded Political economics.
Here is how he described payment for foreign trade in 1720: (page 193)
There is an expense associated with transporting
money based on the distance, risks, and other transaction costs. Bills of Exchange are a type of contract that can reduce this cost by avoiding shipments that are offsetting between two locations. When money must be sent, bankers
charge a fee for arranging the shipment and providing their customers with a bill of exchange, or check, that can be drawn or cashed at a correspondent bank where the money is sent. When the exchange rate is above par, it indicates a balance of payments deficit, and when the
exchange rate is below par, it indicates a balance of payments surplus.

so although bills were denominated in gold, very little gold was used. With allowances made for the massive increases in communications, there is no reason why a similar system cannot now be used.
It would certainly sort out some of the crazy things going on in currency markets.
Posted by tipper 2011-04-24 22:08||   2011-04-24 22:08|| Front Page Top

#20 AFAIC QE2 = QE3 = QE??? = the USSR imploded so that post-Cold War, post-9-11 America = Amerika can adopt Soviet accounting-budget methods, espec BLACK WRITEOFFS = GOOD-FOR-THE-OWG-AMERIKAN-POLITBURO "BLACK BOOKS"???

* CHINESE MILITARY FORUM > THE US BEGINS TO THINK ABOUT DEFAULTING ON ITS DEBT | [AP] US DEFAULT COULD BE A DISASTROUS CHOICE FOR ECONOMY.

CMF POSTER = de facto US DEFAULT = even lead to US SOCIETAL BREAKDOWN = IMPOSITION OF MARTIAL LAW!?

"Martial Law = IMO not necessarily in only the OWG Mighty USSA = OWG Weak USRoA that once again SSSSSHHHHH..CCCCCCCorrectness NO AMERICAN FORMALLY VOTED FOR.

* Also from SAME > CHINA BRAVELY CHALLENGES US PREDOMINANCE.

Again, CHINA is prob quietly thanking the GOD OF EARTHQUAKES for 03/11 + JAPAN'S FUKUSHIMA CRISIS.

However imperfect, Radical Islam sees real opportunity to achieve de facto OWG ISLAMIST CALIPHATE [Nuclear?] thanks to Political-Legal Jihad + the "Jasmine"-led ME Uprisings, while Rising China stands to ANNEX OR DOMINATE ECON, RADIATION-TROUBLED JAPAN, + KOREAS + RECOVER TAIWAN, OKINAWA [ancient RYUKYUS vassal state].

JAPAN = EGYPT?, while SOUTH KOREA = JASMINE-SURROUNDED US ALLY "ISRAEL" = CUSTER AT THE PLA'S "LITTLE BIG HORN"???

Once again, wid feeling - "2012"!
Posted by JosephMendiola 2011-04-24 22:15||   2011-04-24 22:15|| Front Page Top

#21 tipper, bills of exchange and other trade finance documents are, as noted, transferrable cheques (I can't recall if checks are transferrable in the USA).

19th century British bills of exchange could be redeemed for gold at various locations as could British currency.

Interestingly, foreign holders of US currency could redeem them for gold up until 1971.

As the Chinese are now discovering, selling goods abroad for dollars that are not immediately spent overseas, results in these unspent dollars being progressively stolen by the US government through its huge deficit (and the money printed to support it).

The Chinese talk of not using USD in its reserves are just so much posturing, because export led growth is the foundation of the Chinese economy. And having a few 10 of billions stolen from them each year is a small price to pay.
Posted by phil_b 2011-04-24 22:55||   2011-04-24 22:55|| Front Page Top

#22 phil_b.
19th century British bills of exchange could be redeemed for gold at various locations as could British currency.
Basically they were using the "spot price" which could be months out of date. This spot price could also differ from the mint price. Newton spent his considerable talents trying to come up with a solution and failed. He received a well deserved serve from Cantillion for his ham-fistnedness. With the spot price for gold now being available 24/7 all these problems are now obsolete. Just as a Chines company which sells to the US denominates its contract in dollars but received Yuan when it presents its check to the bank in China, there is no reason why the contract should not be denominated in gold. However if they wished for gold they would have to go further and buy gold on the spot market. The fear has always been the volatility of the gold price, however with the price of gold going through the roof, that should not be a problem for the seller at present .

The Chinese talk of not using USD in its reserves are just so much posturing, because export led growth is the foundation of the Chinese economy. And having a few 10 of billions stolen from them each year is a small price to pay
Their export trade with the US is now only 18% and rapidly declining. That fear might have existed a few years ago, but I doubt it does now.
Posted by tipper 2011-04-24 23:50||   2011-04-24 23:50|| Front Page Top

00:01 JosephMendiola
23:50 tipper
23:09 JosephMendiola
22:57 JosephMendiola
22:55 phil_b
22:50 SteveS
22:44 JosephMendiola
22:37 Ricky bin Ricardo (Abu Babaloo)
22:31 JosephMendiola
22:27 JosephMendiola
22:25 JosephMendiola
22:23 Voldemort Croque9893
22:22 Barbara Skolaut
22:15 JosephMendiola
22:08 tipper
22:04 Steve White
21:56 phil_b
21:48 JosephMendiola
21:47 Pappy
21:45 JosephMendiola
21:38 Pappy
20:39 Barbara Skolaut
20:24 Ulomoper Sinatra1392
20:22 JosephMendiola
Merry-Go-Blog










Paypal:
Google
Search WWW Search rantburg.com