What about the increasing number of conservatives that suck dick?:D
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What about the increasing number of conservatives that suck dick?:D
As Doggboy readies to leave Miami for Barcelona the exchange rate with the euro hits $1.31, the Chinese are frequently hinting about "diversifing" and how much more do you want to know? Doggboy suggests you fellows who think the US economy and the dollar are rock solid better start diversifying a bit yourself. Before it's all over with, Uruguayan banks may look like an alternative for things other than routing dollars to BA for real estate deals. An ill wind is blowing and today's dollars could be tomorrow's expensive toilet paper.
If you had to put your life savings in a bank account for 50 years would you choose USD or Euros?
Will Euros even exist?
[QUOTE=Doggboy]Doggboy suggests you fellows who think the US economy and the dollar are rock solid better start diversifying a bit yourself. Before it's all over with, Uruguayan banks may look like an alternative for things other than routing dollars to BA for real estate deals. An ill wind is blowing and today's dollars could be tomorrow's expensive toilet paper.[/QUOTE]From several of your other posts, I would infer that you are roughly around my age: mid-50s. If so, I would call your attention to all the other times in the past 40 years or so that the U. S.economy...the American dollar...whatever...was perceived to be sliding irrevocably downhill, and the pundits saying essentially that soon the dollar would be tomorrow's expensive toilet paper.
At some point in the distant future that may, indeed, be the case. After all, America probably will not maintain its military/economic/political supremacy forever. But from a near-term point of view -- i.e., the rest of [i]our[/i] natural lives -- I don't see that happening. I'd be more concerned about global warming than about the dollar losing enough value to have a seriously adverse impact on my life over a long period of time.
SL
Doggboy is right, the dollar is Fucked.
This is one of the reason's that both Gold & Oil have risen in price, both sold in dollars.
The only thing that could save the dollar would be a rise in intetrest rates which would trash our economy and would be only a short term fix.
The United States can not compete in the internation market place on any idem that is labor intensive. Hense, the third world economies, China, India and the like are becoming the driving engines of world commerce.
Remember Ross Perot and his famious line "That Sucking Sound" as jobs head for Mexico.
Well now your seeing it on a world wide basis with both jobs a capital fleeing the country searching for more competitive markets, looking for a better return.
Were Fucked and anyone that doesn't believe it is a fool. There will come a time where most everyone in America will have to take a cut in their standard of living just like the Argentines have with their "Crisis"
I do this sort of thing for a living and I know what I'm talking about.
Exon
I don't believe for one nanosecond that the US economy is going to collapse. Too many fools have been making this prediction since the 1970s, and I had listened to them, I would be living with nothing more than a coffee can full of gold coins buried in the backyard of my rented apartment.
The dollar goes up, and the dollar goes down. It runs in cycles, like in any free economy. In the 70s it was way down. In the 80s it was way up. In the early 90s it was way down again. In the late 90s it was higher than ever. Now it's cycled back down again. Big fucking deal.
If you want to go about this the right way, the lesson is to be diversified in your assets. I personally have 30% of my stock portfolio in a broadly diversified basket of international stocks. If the dollar goes down, I make even more money. If it doesn't, the cycles will even out, and I will make still more money.
Or you can listen to the latest generation of fools predicting economic armageddon. If anybody wants some old books from Howard Ruff, forecasting disaster, published in the 1970s, I can send them to you and you can save yourself the money you'd spend on the more current prophets of doom and gloom. I think I also have Ravi Batra's famous book, "The Great Depression of 1990." They all tell the same story, only in different years, and they're all bullshit.
[QUOTE=Exon123]I do this sort of thing for a living and I know what I'm talking about.[/QUOTE]BWAHAHAHAHAHAHAHAHAHAHAHAHA....{cough}....{cough}....{cough}. ...Whew! Please, man, don't say that kind of shit while I'm eating. I mean, it's funny and all, but really, you can't be telling jokes like that while people have stuff in their mouths. It'll fucking [b]KILL[/b] 'em from laughing so hard!
SL
Exon is right unfortunately, because it means the decline of this country.
How can any country have an $8 trillion debt and growing larger every year and have it's economy survive? Anyone who thinks a country in such debt is not in serious danger of collapse sometime in the next 30 years is ignoring basic economics and the obvious.
It is amazing how so many intelligent people always ignore the $8 trillion dollar debt as if it were nothing.
And with the jobs and technology moving to China and India ever faster, it can only get worse. If I remember correctly, for the first time ever, the US did not file for the most international patents for last year-that honor went to China.
And we have only ourselves to blame because the politicans and corporate execs only look to next quarter rather than to the next decade.
Suerte.
Stowe
[QUOTE=Stowe]Exon is right unfortunately.[/QUOTE]No, Moore is right. The so-called collapse of the American economy has been the basic stuff of predictions at least as far back as the '70s.
For every doomsday statistic cited -- e. G. 8 trillion dollar debt or whatever -- there is another statistic being completely overlooked.
As J. P. Morgan said about the stock market, "It will fluctuate." Same same about the dollar...the economy...etc.
SL
[QUOTE=StrayLight]BWAHAHAHAHAHAHAHAHAHAHAHAHA.{cough}.{cough}.{cough}. Whew! Please, man, don't say that kind of shit while I'm eating. I mean, it's funny and all, but really, you can't be telling jokes like that while people have stuff in their mouths. It'll fucking [b]KILL[/b] 'em from laughing so hard!
SL[/QUOTE]Then Don't Read My Posts While Your Eating.
Exon
[blue]Hi,
I sincerely appreciate your reports, but...
[red][u]Would you please STOP capitalizing the first letter of EVERY word in your reports![/u][/red]
It's difficult to read, it's time consuming to fix, and it takes you more work to write like that.
On behalf of myself and your fellow Forum Members: [i]Thank You![/i]
Jackson[/blue]
Please provide:
A. The present number of Dollars per Euro:
B. The number of Dollars per Euro in 2001:
C. The number of Dollars per Euro in 1996 (based on the currency basket weightings):
Answers:
A. 1.30
B .85
C. 1.30
So much for the imminent disaster. However, you Armageddon theorists, please convert your holdings into gold coins and bury them in your back yard while I buy US stocks and real estate. In 20 years I will be even richer and you will still be waiting for Armageddon to arrive.
Hunt, I agree with what you are saying, but I also think you got off the main point. I don't think anyone is saying the US isn't a safe investment at all, even though we have tons of unemployed, a huge deficit, corruption is getting worse, blah blah blah so on and so forth. The point is many people think that it isn't as solid as it used to be and for that reason, many people are advocating diversification. I personaly agree that it's not good to have " all your eggs in one basket ".
I don't think I would every liquidate all my US assets, but investing in up and coming economies is a very good thing, and just like the stock market, you need to know when to get in and when to get out. I agree the Euro is gaining on the dollar, I was just there and 5 years ago many people preffered to deal in dollars and keep their savings in dollars, these days people are switching to the Euro, do I think it's the smartest thing to do? Maybe, maybe not, but it is more common than you might think.
In Ukraine for instance all real estate transactions used to be done and priced in dollars, now it's starting to move towards the Euro. Alot of people around the world seem to think diversification is the best bet.
I would suggest that instead of " having one dirty little finger in one dirty little pie you should have all your dirty little fingers in all the dirty little pies".
BTW, that's a quote from the movie Lock, Stock and two smoking barrels, great movie:D.
Badboy
Diversify abroad absolutely. You don't even need foreign corporations/funds in order to have substantial global exposure. Just owning Coca Cola might not be a bad idea.
I believe that during the 1970s and early 1980s many people thought the USA was doomed and definitely not as strong as it used to be. The economy was weak, there was stagflation and Carter, an energy crisis, Vietnam was recent, and everything produced abroad seemed superior to an American product.
Then the Reagan administration arrived and possibly the the strongest period of sustained economic growth in US history began. The information revolution arrived a bit later and the USA pioneered and led the charge as usual. We heard a lot less preaching about the imminent collapse of the US ecomony for about 20 years.
Whatever the next economic, industrial, or technical revolution is, it will almost surely be led by the USA using the last 150 years as a guide. That is because it is still the most entreprenurial, dynamic, developed, free market on the planet with no country poised to take its place in the forseeable future, regardless of the national debt.
I agree with alot of what you said Moore, but I have to say you overlooked two things, first being during the 1970' s, The US wasn't dealing with an economic powerhouse like China, India, or Energy giants like Russia. I could go on and on about the differences between now and then, but the point is things HAVE changed, and your predictions about the next technical, economic, industrial revolution being led by the US, is more of a maybe than a definite. I just read somewhere that for the first time in history China is overtaking the US in Patents, they are also publishing more research and scholarship, it's not a huge thing, but it is a sign that the future is not a given. There is a reason the US government and US corporations are knee deep in Asia. They can say anything they want for politically motivated talking points, but MOST people forsee that the new emerging economic powerhouse is Asia. Just three letters S. C. O, get used to them because in the future you will hear alot more about them.
I think All you have said about the US is true, but the point is to stay focused on growth and development and stop dumping all our money on the M. I. C, I really think Keynes was misinterpretted to the detriment of mankind. But maybe he predicted that also. It seems we are more interested in holding the biggest gun in the world and less on having the strongest economy or maybe we equate one with the other and THAT might be the problem. All the new economies have said time and time again that they prefer dealing with countries like China and Russia, because they don't like US strong arm tactics and lack of respect, and BEFORE, there wasn't a good strong alternative and now there is. The US CAN maintain it's position, but it will take the new generation to change and adapt to the new global economy. Just as history has taught all of us I hope, you either change and adapt or you become extinct, Just ask the Romans, the Ottomans, the U. K, the Soviet Union, so on and so forth. Let's be honest about one thing, The US hasn't always gotten ahead by it's inovation alone, I won't go into it but anyone who knows history, knows we had a " few helping hands ".
Badboy
[QUOTE=Badboy13]I agree with alot of what you said moore, but I have to say you overlooked two things, first being during the 1970' s, The US wasn't dealing with an economic powerhouse like China, India, or Energy giants like Russia. [/QUOTE]I agree with you that the past is always a little bit differnt from the future; analogies are just analogies, and at some point they break down and things actually [u]are[/u] different and change occurs.
Nonetheless, in terms of economic powerhouses, the U. S. Had to deal with Japan, which was perceived to be a huge economic powerhouse way back when. Magazine covers were full of feature articles about the decline of America to a resurgent Japan. What happened?
And in terms of energy giants, the U. S. had to deal with a very strong (at the time) OPEC. And the naysayers and doomsday prognosticators were beside themselves with how this spelled the end of American economic dominance. What happened?
I think Moore is spot on in his assessment about America's more intangible assets, and their imlications on the economic future.
Yes AND no, for one thing, OPEC is one of the big reasons we are STILL paying 55-60 a barrel, so they are kicking our ass in those terms, and right now as we speak the US is falling over themselves to try to stop the NEW energy cartel being started by Russia and many other african and central asian countries with loads of natural resources, the US and Europe fear these energy cartels. That is the truth so I think the jury is still out on that one, as far as your Japan assesment, you are 100 % correct, BUT, and this is a big BUT, you continue to miss the point, we aren't in a 1970's economy anymore, we aren't dealing with countries we are dealing with blocks of nations with a limitless supply of energy, consumer populations, and so on. Japan could not sustain growth because in the end it is just a small island with very little natural and energy resources of it's own. It was only a matter of time. It was like saying we should fear Taiwan. They might have big money and big industry but there is a limit to what a small island with very few resources can achieve.
The SCO is something different, you have India, China, Russia, Kazhakstan, Iran and Possibly Pakistan in the near future agreeing to work together on trade, military, science, defense, research and development, energy trade and policy. This is NOT Japan. You will see a little more in the future as this will be gradual. But the poles are slowly shifting. We can overcome that, but we need to start thinking outside the box and leave the whole " manifest destiny " bit at the door because if we don't refrain from our arrogance we will learn our lessons the hard way.
Again I never said the US isn't solid, but for how long doesn't depend on us saying so, but on our actions around the world. Nothing is certain.
Badboy
It means that we're paying the same price for oil now as we did in 1984, and a third less than we did in 1979, when you adjust for inflation.
Oooh! Oooh! The sky is falling! The sky is falling!
And by the way, BB13, the energy supply is in fact limitless, and not just in the Middle East. If oil gets expensive enough, the US can process the oil shale in the western states into fuel. There is the equivalent of 1 trillion (that's trillion with a "t") barrels of oil sitting in shale in Colorado, Wyoming, and Utah. Don't lose sleep worrying about the future. The only thing that one need fear is socialist economic policies which could strangle innovation, production, and investment.
Many of those things are found in the US economy, but I guess we can all nit pick, I don't think Japan was ever on the level that China is on. And no offense but I just can't really take serious your last comment, I mean I don't even believe you bought this last one. You are basically telling us the the TOP US corporations are all wrong and they are somehow misguidedly tripping over themselves investing billions upon billions into the chinese economy and they are all at each others throats trying to secure exclusive rights to the chinese purchase power present and future. The thing is if your "prediction" is correct some of the biggest losers will be US corporations. I don't think you could make that comment straight faced to a room full of top level multi national C. E. O's and be taken seriously. I think sometimes you try too hard to win an argument. And I am sure you agree, this time you really gave most a good laugh.
Badboy
Talk about doomsday theories
Plus, can you imgine how many Chinese Supermecardos they have in China? Not the best places to shop in BA for quality and price.
For people who owned stocks in Germany, at two times in the last 90 years their holdings went to zero. At least once in Italy and Japan. The same was true in China. And was also true in various other countries, many times.
The Chinese banking system is utterly bankrupt, Papa Benito has hit this one right on the head. The banks are forced by the government to make worthless loans to state-owned or state-affiliated enterprises. These non-performing loans far exceed any prudent reserve standards (upwards of 50% of Chinese "bank" loans are non-performing). I recently read that there are at least 3000 ball bearing factories in China either recently built or under construction. How many of them do you really think the world needs? Or that are running at 80% capacity?
On the bright side, Citibank, Morgan Stanley, and other Western banks are being brought in to "invest" in the Chinese banks. We'll see how that goes.
Well I guess we should be talking, since we owe them our shirts, or at least we owe them trillions, that is. They are paying for our war on terrorism. Those guys have stockpiles of money, I am not really worried about China in the near future. Of course there are weak points in THEIR economy, just like their are very very weak points in the US economy. I guess we are doing better since we are in a huge deficit and they have huge surpluses. Let me know when WE stop borrowing money from them, then I might take all your " concerns " seriously. Plus, all that " valuable " US real estate? Why don't you tell me how much of it is owned by China? Guys are buying american more than americans. I think one of the biggest problems the US is having is getting China to stop saving money and start spending it on US corporations.
But hey I guess we can all dream,
Badboy
Again, I think you will have a VERY hard time convinced just about every US and every other major corporation in the world NOT to invest in China. And you are very right NOT to want your " predictions " to come true, The world has become very VERY dependent on China and their economy and their money. China goes, we go also.
[QUOTE=Badboy13]You are basically telling us the the TOP US corporations are all wrong and they are somehow misguidedly tripping over themselves investing billions upon billions into the chinese economy and they are all at each others throats trying to secure exclusive rights to the chinese purchase power present and future. The thing is if your "prediction" is correct some of the biggest losers will be US corporations. I don't think you could make that comment straight faced to a room full of top level multi national C. E. O's and be taken seriously.[/QUOTE]I would never, ever, ever, in a million years, take the fact that all U. S. Corporations are doing something as proof that it is in any way the right or prudent thing to do. This falls under the category of Exon's joke, "I do this for a living so I know what I'm talking about."
If I were going to look somewhere for guidance on where things might be going, I'd look to see what a tried and true investor like Warren Buffett, or a tried and true fund manager like Bill Miller, is doing.
But corporations? No fucking way.
[QUOTE=Badboy13]we owe them trillions[/QUOTE]When I owe one million dollars, the bank owns me. When I owe one trillion dollars, I own the bank.
A lot of those numbers are inflated, wrong, or simply misleading when viewed in isolation. Don't sweat them.
Well I can't argue with you there Stray, The Sage of Omaha is a good bet, moreso than our very own mongering nostrodamus (no offense nostradamus) On CNN money as we speak " the US dollar is at a 20 month low against the Euro". Seems hedge funds are dumping on the dollar.
Some of Warren's thoughts.
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Public stances:
Buffett has repeatedly criticized the financial industry for what he considers to be a proliferation of advisors who add no value but are compensated based on the volume of business transactions which they facilitate. He has pointed to the growing volume of stock trades as evidence that an ever-greater proportion of investors' gains are going to brokers and other middle-men.
Buffett emphasized the non-productive aspect of gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Buffett believes that the U. S. Dollar will lose value in the long run. He views the United States' expanding trade deficit as an alarming trend that will devalue the U. S. Dollar and U. S. Assets. As a result it is putting a larger portion of ownership of U. S. Assets in the hands of foreigners. This induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005, as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make acquisitions of companies which derive a substantial portion of their revenues from outside the United States.
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Well I hope that helped ease some minds. If you need citations I would be happy to give you some.;)
Badboy
[QUOTE=Hunt99]When I owe one million dollars, the bank owns me. When I owe one trillion dollars, I own the bank.
A lot of those numbers are inflated, wrong, or simply misleading when viewed in isolation. Don't sweat them.[/QUOTE]Again, your comments make alot of sense, and they are hard to argue, but at the same time they are using that debt to buy out our corporations and our real estate, guess what? They don't want our government bonds.
Some facts and stats I came across.
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Consequences of foreign ownership of U. S. Debt:
U. S. Treasury statistics indicate that, at the end of 2004, foreigners held 44% of federal debt held by the public. About 64% of that 44% was held by the central banks of other countries. A large portion was held by the central banks of Japan and China, although, most was held by members of the EU. This exposes the United States to potential financial or political risk that either banks will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then.
On 3 August 2006, Italy's central bank announced that it would sell off a large portion of its dollar holdings (including US Treasury bonds) and instead shift to British Pound Sterling. The reason Italy gave for doing out of fear of an "expected slide in the dollar." Russia, Sweden, and the United Arab Emirates had announced similar shifts out of the dollar into other currencies and gold earlier and cited the United States's "twin deficits" (I. E. The US trade deficit as well as its budget deficit) as the reason for the expected fall in the dollar's value.
U. S. Public debt on 30 December 2005 was $8,170 billion (or $8.1 trillion) circulation (M1 Money Supply) estimated to be $1,372 billion.
The debt equates to $28,412 per head of the U. S. Population, or $58,390 per head of the U. S. Working population.
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I would read this link, if you haven't allready:
[url]http://www.executivefocus.com/displayStory.cfm?story_id=8083036[/url]
These are some quotes from this article:
China's central bank is thought to be switching from Treasury bonds to American mortgage-backed securities and corporate bonds in an attempt to earn higher yields. Chinese officials have also discussed in private the need to diversify reserves out of dollars in order to reduce exposure to a big drop in the greenback. The bank may be putting a bigger slice of any increase in reserves into euros and emerging Asian currencies, but so far there is little sign of a shift out of its existing stock of dollars. One problem is that China's investments are so big that they move markets. Shifting money into euros would push down the dollar. China would then not only suffer a capital loss on its remaining dollar reserves, but it could also be forced to buy yet more reserves to hold its currency down against a weaker dollar.
China's official reserves already far exceed what is required to ensure financial stability. As a rule of thumb, a country needs enough foreign exchange to cover three months' imports or to settle its short-term foreign debt. China's reserves are equivalent to 15 months of imports and are six times bigger than its short-term debt.
Badboy
Since China is a communist state they do not care much, if anything for the lives of their people so what would stop them from calling in $1 trillion of our notes they hold (they do not hold that much now but withing 8 years they will) and bankrupt us.
The fact that it would hurt their people would have little meaning to them at this juncture of the 'capitalistic' state.
I would expect that they could and might do that in the future when we are adversaries over Taiwan or Korea or something else?
No country stays on top forever and with an $8 trillion dollar debt, there is no logic that could explain how the US can continue to be such an economic power.
The other option is for countries with oil to have begin trading on something other than the dollar, something Iraq (pre-invasion), Iran and Venezuela have been advocating. While this is not likely in the near term, the result of that would be a massive decline in the dollar. I have read where it could be up to 30% drop.
Suerte.
Stowe
[QUOTE=Badboy13]Yes AND no, for one thing, OPEC is one of the big reasons we are STILL paying 55-60 a barrel, so they are kicking our ass in those terms, and right now as we speak the US is falling over themselves to try to stop the NEW energy cartel being started by Russia and many other african and central asian countries with loads of natural resources, the US and Europe fear these energy cartels. (Edit) We can overcome that, but we need to start thinking outside the box and leave the whole " manifest destiny " bit at the door because if we don't refrain from our arrogance we will learn our lessons the hard way.[/QUOTE]Badboy,
Have to tell you I have really enjoyed reading this thread in the last 24 hours. Would be interested to get your reaction on the following:
Should we fear cartels that include members that do not have the technical, political, or security apparatus to bring their commodities to market (Nigeria and DRC would be two good examples with oil and copper) Just because a country has vast natural resources means nothing - you have to be able to not only bring these resources to market, but continue to re-plough some profits into continued production (not individual Swiss bank accounts)
Who exactly in the US government is falling over themselves to prevent the formation of this new energy cartel? Would this be the same guys that buy their "Soccer-Mom" wives a Suburban, Expedition, or Escalade? No, I forgot those vehicles were disposed of at $3.00/ gal. However the sales have surged now that gas is approaching $2.00 - so you never know.
The HUGE balance of payments situation is not a mystery. We live in the "Walmart Generation" - meaning we are very happy to buy cheap Chinese goods. Not a bad thing, if you happen to work outside the manufacturing sector! Not to worry though, the newly invigorated Democrats have the answer: raise the minimum wage.
I would agree with you that today is not the past. What is different today from 30 years ago? The economy is burdened with an unthinkable about of litigation, affirmative action, and dumbing-down of the educational system. All have put the USA at a decided disadvantage in terms of doing business. Some may feel that these are reasonable impediments to economic activity-for a civilized, liberal society.
I recently returned from a couple of weeks in Botswana. The number of Indians and Chinese who are there, set-up and doing business is shocking. But the goals and priorities for these nations are totally different than the US. They need the raw materials and they need to develop the markets to sell their finished goods. The US will continue to rest on it's laurels - we are used to the world coming to US, and I don't see that changing anytime soon.
I would like for you to explain your comments about US arrogance, and those "historical few helping hands". Do you mean the general attitude of the world beginning and ending at the Atlantic and Pacific Oceans? Do you mean the idea that US businesses don't think they need the small secondary markets?
Not living in the USA could you help answer this question: Now that the election is over, is the liberal "main-stream" media still speaking about the horribly high gas prices or has that problem vaporized now that the Democrats are in control?
Regards,
Alan
Hi Alan,
I have already made my points and they are valid and well researched, it is your right to disagree with them, that is fine, I would love to see some research and stats and figures if you have some handy. I have to say, wide ranging broad open ended generalized statements aren't really doing me much good.
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Liberal Media ? You mean media run by liberals ? Liberals being people that believe in liberalism ? Let me see if I got it right. This is a general definition I agree with :
Liberalism is an ideology, philosophical view, and political tradition which holds that liberty is the primary political value. Liberalism has its roots in the Western Age of Enlightenment, but the term now encompasses a diversity of political thought.
Broadly speaking, liberalism emphasizes individual rights. It seeks a society characterized by freedom of thought for individuals, limitations on power, especially of government and religion, the rule of law, the free exchange of ideas, a market economy that supports relatively free private enterprise, and a transparent system of government in which the rights of all citizens are protected. In modern society, liberals favor a liberal democracy with open and fair elections, where all citizens have equal rights by law and an equal opportunity to succeed.
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We are probably on completely different spheres here, I don't like labels much, I find them used primarily by lazy people for divisive purposes. I basically just gave alot of facts and figures and some opinions by leading economists and investors. That's all, my point is I don't believe the US economy is as strong as some think. It is your right to disagree, and you can give me all the facts and figures to back up the " resting on laurels " claim, Or you can just make that statement and make no follow up to it and I can just try to take it as a given.
About us fearing gas cartels, that is up to you, I don't but Nato, Europe and the US do. Here is a quote from a Financial Tmes article, I will also add the corresponding link.
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Nato fears Russian plans for 'gas Opec'
By Daniel Dombey in Brussels, Neil Buckley in Moscow and Carola Hoyos in London.
Published: November 13 2006 22:13 | Last updated: November 13 2006 23:45
Nato advisers have warned the military alliance that it needs to guard against any attempt by Russia to set up an "Opec for gas" that would strengthen Moscow's leverage over Europe.
[url]http://www.ft.com/cms/s/af125540-7358-11db-9bac-0000779e2340.html[/url]
Here is another one, it is pretty much overkill but what the heck it seems like you needed the lesson, this is another quote and I will add the corresponding link, I would have you read all the russian articles online but I am guessing you don't speak russian, if you did you would probably get an even more in depth view of what is really going on over there and why.
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SCRAMBLE FOR EURASIAN ENERGY RESOURCES INTENSIFIES
By Igor Torbakov
Friday, November 3, 2006
For its part, the U.S. government appears to be increasing its critical rhetoric decrying Russia’s reluctance to loosen its tight grip over energy transportation routes. Speaking at a recent energy conference at the University of Haifa, U.S. Ambassador to Israel Richard Jones stressed the importance of multiple energy routes to help secure the supply of gas and oil to the Middle East and Europe. Jones described the current situation whereby Russia is exercising monopoly over much of the gas supply in the Caspian region as “unhealthy.”
[url]http://www.jamestown.org/edm/article.php?article_id=2371613[/url]
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I hope that clarified things, next time I would suggest you do your own research instead of asking me to do it for you (no offense BTW) Then we could debate the facts and not have to go in circles qualifiying things, we could quantify them instead which is much more intellectually stimulating.
Ok let me try to tackle a few more, regarding you asking me to explain US arrogance, that kinda doesn't need explanation and I would rather NOT go down that road, MOST people around the world understood my points. I don't have to qualify that but I could easily quantify it's end result, and that is simple, more emerging economies around the world have said time and again they prefer dealing with China and Russia, again I suggest you look for the information yourself.
And in regards to Indians and Chinese being all over the place you are 100 % correct, I believe the PM of China was just in Africa about a few weeks ago holding a summit with just about every single African dignitary there promoting trade, investment, aide, african integration and other things as well. And it is at THAT summit when there was a chorus from those same dignitaries saying they prefer dealing with the likes of China, Russia, India and Iran, Basically all the S. C. O countries. And you can find the articles and see the reasons they give for US arrogance.
My main point wasn't to sit here and argue every point of my post, you can take them at face value or not. Discussing trivial issues is meaningless. Maybe next time you could post more factual information. The US is a good investment, but not as good as it used to be and if all it does is" rest on its laurels", I think we are in very big trouble. Maybe you don't think so, thats fine with me. I would suggest people take a good look at the emerging east and either be prepared to compete or invest. Burying your head in the sand won't make them go away.
Regards,
Badboy
[QUOTE=Stowe]Since China is a communist state they do not care much, if anything for the lives of their people so what would stop them from calling in $1 trillion of our notes they hold (they do not hold that much now but withing 8 years they will) and bankrupt us.[/QUOTE]Bankrupt us? How?
When your mortgage company sells your mortgage to another bank, are you bankrupted? That's the exact analogy to China's supposed sell off of treasury bonds.
And as BB13 says, they're supposedly dumping their safe treasuries and diversifying into mortgage-backed securities. Heard of the housing bubble? Foreclosure rates going up? Hah! Selling their treasuries could be the stupidest thing the Chinese have done in the last 30 years.
Some farmers-and-peasants cooperative bank in Xian, China is going to hold title to some overpriced swampland in Florida. What are they going to do when the debtor stops making his payments? Move the swamp to central China? Start taking their holidays on the Gulf of Mexico? They're going to do the same thing the Japanese did when they were confronted with the same situation 20 years ago - they're going to sell at a massive, unrecoverable, 50%+ loss.
And lastly, for you guys who fret about the trade deficit, you need to remember that the US trade deficit has been going on for well-nigh 40 years. If these trade deficits (which are consistently a very small percentage of GDP and national wealth) were really bad, don't you think it would have manifested itself by now? As Milton Friedman observed, when we import a car from Japan, we get a useful machine which takes people from place-to-place right here in America. All the Japanese get is a little green piece of paper. Is that a fair trade?
Here's an excellent discussion:
[url]http://www.frontlinethoughts.com/article.asp?id=mwo051206[/url]
Hunt you must be the smartest human on the planet. Almost every economic expert is saying that the $8 trillion dollar debt is going to have a massive impact to this country. They also state that the huge deficit is also not good for this country. They also state that the huge deficit we have with China is bad for this country.
Perhaps you should speak with all the economic experts and tell them they are all wrong.
Phew do I feel better knowing you know more than most of the economic experts. Foolish me.
If these things were not good for the country why are the experts dead set against the huge debt and deficit? If it is such a good thing why aren't all the countries in the world doing the same thing? To be part of the EU, Europe has strict standards regarding the amount of debt and deficits a country can have.
Suerte.
Stowe.
Guess we just disagree and neither of will know for sure for a couple of decades.
[QUOTE=Stowe]If it is such a good thing why aren't all the countries in the world doing the same thing?[/QUOTE]Because they can't.
Mongers-
Even though Hunt is a dedicated right winger, I tend to agree with him on this issue. Post WWII the US made a conscious decision to move in the direction of economic globalization because they believed their strategic position would allow them to dominate a world predicated on global commerce. The US has 5% of the world's population, yet it the world's largest economy by far and others are just starting to catch up because of the fact that the US ¨made the rules¨of the globalized economy. The fact that the US ¨made the rules¨ allows them to make more rules, one of them being that they can carry huge debt / deficits and see only marginal detrimental effects.
The US is the biggest consumer of the stuff that China manufactures, and China is the largest holder of US currency and T-bills. As Hunt alluded to, this puts China in at least a vulnerable position as the US. As Donald Trump said in reference to his bankruptcy as a result of the early 90's real estate crash, and well illustrated by Hunt ¨when you owe the bank $3 million, they will come after you with everything they've got. When you owe the bank $900 million, you're partners¨. China needs to US to buy their crap right now and in the forseable future, there is no other consumer available on the scale of the US. US consumers have by far the most disposable income of any nation even remotely near their size population wise. The average Indonesian, Indian, Pakistani, or Brasilian making $1 an hour cannot afford to buy even a small percentage of the Chinese made consumer goods that the average Joe Redneck making $20 an hour fixing cars can at WalMart.
Within the next several years, the US will pullout of Iraq Vietnam-style, Obama will be president supported by democratic majorities in both houses, and the financial treason of the Bush Administration will be a thing of the past. Expect Dollar-Euro parity (or better) by 2010. China will have serious internal unrest around the same time, leading to the nation wide strikes and protests that lead to the toppling of the pseudoCommunist dictatorship. China is a minimum half century away from having their house in order enough to seriously challenge US dominance.
Suerte,
Dirk Diggler
[QUOTE=Stowe]Hunt you must be the smartest human on the planet. Almost every economic expert is saying that the $8 trillion dollar debt is going to have a massive impact to this country. They also state that the huge deficit is also not good for this country. They also state that the huge deficit we have with China is bad for this country.
Perhaps you should speak with all the economic experts and tell them they are all wrong.
Phew do I feel better knowing you know more than most of the economic experts. Foolish me.[/QUOTE]Sorry Stowe, that instead of discussing the issues you have to reduce yourself to personalized name calling. Frankly, you don't know one damn thing if you say that "all the economic experts" agree with you. Do some reading of the economic press and you will find people all over the map. Some believe trade deficits are good, some very good, some bad, some very bad, and some are neutral. In fact I gave you a good, laymans-language article which reviews the landscape quite well. Obviously you didn't read it.
You demonstrate only your lack of manners and frank ignorance when you claim that all the experts agree with you.
Your posts sound exactly like the people I used to listen to 25 years ago, belly-aching, pissing, and moaning about the huge deficits, how the damn foreigners own us, and how the economy is on the verge of collapse. Howard Ruff anyone? Ravi Batra? Oh my god! The Japanese have bought Rockefeller Center! Oh the horror!
And meanwhile the US has continued with expanding prosperity and economic growth pretty much non-stop in the following 25 years.
They were stupid and wrong to call for economic armageddon then, and you are stupid and wrong to call for it now.
If you really believe your own BS, don't invest in any 401ks, stocks, IRAs, or even real estate. Buy little gold coins and collect them under your bed inside your rented house. And I'll see you in 25 years when I'm sailing the world on my big-ass yacht paid for with good old US dollars made from the profits of the American economy. And you're just a goofy old man with a bunch of shiny coins under his bed, still desperately waiting for the end of the world.
(And Dirk - and while you might discount anything you might hear from somebody you pigeon-hole as a "dedicated right-winger," I'd tell you not to fear China becoming economically prosperous. Countries that learn to keep themselves busy making money are countries that are too busy to invade their neighbors and cause international trouble. Look at Germany and Japan since 1945. A rising tide lifts all boats.)
Most analysts predict that by the end of the year the dollor will be at 1:1.35 against the Euro and by the end of next year the dollar will be at 1:1.40 against the Euro and 1: 2.0 against the British Pound. Scary stuff but it's the truth. Let's all keep our fingers crossed that our very own mongering Nostradamus' are correct. Even though it's not likely based on reality.
The dollar's slide: How far, how hard?
The currency sank about 2.5 percent against the euro in the last 5 sessions. More losses may be coming.
By Katie Benner, Fortune reporter.
November 30 2006: 9:26 AM EST.
(Fortune Magazine) -- U. S. Currency traders gorged on Thanksgiving turkey and took a half day last Friday while the rest of the world quietly bet against the dollar.
At first, it looked like a handful of speculators were taking advantage of light trading volume, which makes it easier to move a market up or down. But then more players started lining up against the greenback, too, and the worries hit harder than post-holiday indigestion.
The dollar has tumbled about 2.5 percent against the euro in the five sessions through Tuesday. Although the greenback came back a bit Wednesday, the dollar's near its weakest against the euro since March 2005. The dollar also fared badly against the British pound, though it's done slightly better against the lowly Japanese yen.
"With the dollar debacle, the health of the economy, current and future, is on trial," said Brian Wesbury, chief economist at First Trust Advisors.
And he, like many other traders and strategists, sees a weaker dollar in the months to come thanks to a combination of slower economic growth, the possibility of interest rate cuts from the Federal Reserve and long-term trends in international currency markets.
Currencies typically have a six- to seven-year cycle of adjustments, said Quincy Krosby, chief investment strategist at Hartford Financial. "If you look at February 2002 as the strongest point in the cycle, I do think [the dollar] will ease a bit more. But that's also just part of the adjustment process that began [almost seven years ago] and is continuing."
Many observers have been bearish on the dollar since the start of 2006, when the so-called yield curve in the Treasury bond market kept inverting, meaning that investors got a better return on the short-term, two-year government bond than on the long-term, 10-year Treasury note. That's the opposite of how yields usually behave - and an inverted curve preceded the nation's last two recessions.
But back at the start of the year, most economists said it looked unlikely the United States was headed for a recession this time - that the economy would not stumble on a housing slump, rising interest rates in Europe or a series of rate hikes by the Federal Reserve. Now, some fear that those comforting predictions may not hold true.
Foreign banks, for example, may be deciding that the United States is getting too risky because the U. S. Economy doesn't look as attractive with sluggish growth ahead, said Naomi Fink, director of foreign exchange strategy at BNP Paribas.
"It reminds me of the time surrounding the tech boom when many equity analysts were saying that P / E ratios were irrelevant," said Fink, referring to the relationship of stock prices to corporate earnings. "Similarly, we shouldn't have discounted arguments for a slowdown in the U. S. Prior to this recent move, currency traders were ignoring bad data, or only looking at the good elements of the bad data."
The bad data includes the housing slump, said money manager Hugh Moore, a partner at Guerite Advisors, who's forecasting a recession sometime in 2007.
"The jobless recovery happened after 2001 because of home equity," said Moore. "Wages stagnated, but people didn't want to give up their lifestyles." So instead, they borrowed against the value of their homes. He estimated that home equity withdrawals in 2004 and 2005 totaled about $1.4 trillion, and that two-thirds of that fueled consumer spending. Consumer spending in turn fuels more than two-thirds of economic growth, so its importance can't be underestimated.
Moreover, Wesbury said that more rate hikes from the Fed remain a possibility, or at least the central bank won't cut rates anytime soon. Wall Street has been anticipating a cut for months, hoping that the Fed would lower the benchmark rate to keep the economy from slowing too much.
But Fed Chairman Ben Bernanke said in a speech Tuesday that while growth should pick up next year, inflation remains a "worrisome" threat, which could mean that the Fed's next move on rates is a rate hike, and not a cut.
Much of the recent betting against the dollar has been on the expectation that a weak U. S. Economy would force the Fed to cut rates. Lower rates make the dollar less attractive relative to other currencies.
Meanwhile, Wednesday's upward revision to third-quarter economic growth indicates that economy is growing modestly, while a key inflation gauge dipped.
That should ease short-term concerns about a recession, but, as Krosby points out, there was no pop for the troubled greenback.
"The GDP numbers were upwardly revised, but there was immediately no significant strengthening in the dollar. If the market instinctively believed the economy was chugging along well, there at least would have been a knee jerk reaction."
Perhaps the dollar's muted rebound against the euro Wednesday can be traced to the news that new home sales fell a larger-than-expected 3.2 percent in October, quelling hopes that the worst of the real estate slump was over.
"What we really should focus on is that fact that the Americans were on holiday and foreigners decided to sell," said Axel Merk, manager of the Merk Hard Currency Fund, which has $47 million under management, referring to the dollar's recent drop. "Given the extent to which we're dependent on foreigners to prop up the dollar because of our current account deficit, that's worrisome."
"A dollar decline is in nobody's interest, but it's highly overdue and will happen at some point," Merk said.
[QUOTE=Badboy13]Scary stuff but it's the truth. Let's all keep our fingers crossed that our very own mongering Nostradamus' are correct. Even though it's not likely based on reality. [/QUOTE]Why do you call the normal action of international currency markets "scary stuff"? European central banks have been raising interest rates (and are generally expected to raise them even more) while the US' Fed has stopped six months ago. The rise of the Euro and Pound is absolutely expected in such a scenario. It's covered in Macroeconomics 101. The only people who should possibly be "scared" in such circumstances are currency speculators who have a net long position in the dollar.
Frantic trading as fears of US housing meltdown grow.
Britons will head across Atlantic for bargains.
Ashley Seager, economics correspondent.
Friday December 1, 2006
The Guardian.
The dollar continued its seemingly unstoppable decline on the foreign exchanges yesterday, hitting a 14-year low at just below $1.97 to the pound as analysts predicted the two-dollar pound mark may soon be breached.
The dollar was last this low against the pound in September 1992, when Britain was forced out of the European Exchange Rate Mechanism, the euro's forerunner.
The news is likely to further boost airline bookings from bargain-hungry Britons rushing off to the United States for a pre-Christmas shopping bonanza.
The greenback fell more than 1% , or nearly 2.5 cents, in frantic trading in the world's dealing rooms after investors were panicked in particular by a key survey showing business activity for November in the US midwest contracted for the first time in three and a half years. The market had been expecting modest growth.
The survey by the National Association of Purchasing Management Chicago suggested the meltdown in the country's once-booming housing market was spreading, dashing hopes that momentum elsewhere in the economy would outweigh falling housing prices.
David Durrant, chief currency strategist at Bank Julius Baer in New York, said: "The trend is for a weakening dollar and reports like Chicago PMI provide a good excuse for investors to keep selling the currency. The report is not a complete disaster but it validates people's views that the economy is softening and therefore rates will remain low or even get lower. That's not supportive."
The dollar has fallen from $1.90 to the pound in just over a week - a drop of 3.5%. It has also fallen against all other currencies and yesterday hit a 20-month low against the euro of $1.326. The dollar has in fact been under pressure for the past five years because of the United States' giant current account deficit of 6.6% of gross domestic product. It has fallen more than 30% against a basket of currencies but unexpectedly rose through much of last year. But its renewed downward trend is now established and many analysts think it has further to run.
The latest trigger is that a weakening economy means the US central bank, the Federal Reserve, is now likely to keep interest rates steady at 5.25% or begin cutting them, maybe as soon as next spring.
This reduces the dollar's attraction to investors since the European Central Bank is widely expected to continue raising rates from their current 3.25%. The Bank of England, which has raised rates twice in recent months to 5% , is expected to either keep rates steady or perhaps raise them again early next year.
The falling dollar should help US exporters regain competitiveness in overseas markets because their goods will be cheaper.
It should also push up the price of imports, discouraging Americans from buying them. This could gradually help to narrow the country's trade and current account deficits but few analysts expect that to happen soon. However, higher inflation could also persuade the Fed to raise interest rates at a time when the economy is slowing.
Other data that spooked the markets yesterday showed that core consumer inflation remained at 2.4% for the second month in a row, defying expectations that it would fall back further and making the Fed's job more difficult, as did a fresh rise in oil prices, which took them up to $63 a barrel for US light crude futures, up from $58 barely a week ago.
Badboy