What is Digg?120 Comments
- ardenr, on 10/12/2007, -9/+36Or, ask an economics professor what our pointless war has done to the economy. Or what our vast military spending has done to education and our standing in the world's knowledge economy.
- ardenr, on 10/12/2007, -5/+29Now please, someone tell me how Dick Cheney is a patriot after he screwed our economy with a 400 billion dollar war, with no end in sight and probably double the cost in reparations... and then he bets against the dollar. He's a rich guy, and he knows how to handle his money. His advisors say he doesn't watch his investments closely, and we all trust Dick's advisors right?
Right? Remember, this is the same guy who said that going into Iraq would be a "quagmire" ten years ago. Giggedy. - Yez70, on 10/12/2007, -8/+22In addition to the 25% drop in the dollar's value on the world market we have been hit with about 15% worth of inflation with no rise in wages. Add tax cust where over 80% of them went to the 10% of Americans at the top of the income range. A dollar is worth 60 cents now (in 2000 world dollars), so in actuality wages did not stay level they were cut by 40% ?! Yea the economy is in great shape - NOT!
This administration and the GOP congress have raped the american people to line their gold lined pockets.
I hope everyone had stock in lube companies, since most of us have been bent over taking it where it hurts for the past 6 years.... - inactive, on 10/12/2007, -3/+14"Here's a valid point - Dick Cheney is investing against the dollar."
So am I. I've made a lot of money betting against the dollar...apparently we both have. The difference between us is I'm not a self-righteous putz awarding no-bid government contracts to my country club buddies.
You can bet against the dollar by buying gold, overseas currencies like the Euro, investing in overseas emerging markets either through individual stocks or ETF's, and buying real estate and then selling it to overseas buyers. I've done all those things. Somewhat ironic, I take a lot of that cash and loan it back to the US government. The Treasury Dept. is paying off pretty good right now. Though I have no faith in our current leadership or currency, I do have faith in the US economy and American people. - hambend, on 10/12/2007, -3/+14Just wait 'till someone starts trading oil in Euros. Then you're in trouble.
- ardenr, on 10/12/2007, -7/+18Here's a valid point - Dick Cheney is investing against the dollar.
...
http://articles.moneycentral.msn.com/Investing/Extra/CheneysBettingonBadNews.aspx
...
Also, from Kiplinger's
...
"Vice President Cheney's financial advisers are apparently betting on a rise in inflation and interest rates and on a decline in the value of the dollar against foreign currencies. That's the conclusion we draw after scouring the financial disclosure form released by Cheney this week." - there, on 10/12/2007, -5/+16 I dunno... if you're going to use GDP as the sole indicator of standard of living (it's not by any economist's metric that I know of) maybe you should use REAL GDP which considers inflation adjusted numbers (e.g. currency devaluation). You may get a far different picture of which direction we are headed..
Stats are from December 2003 which rank the US 118th. (somewhere in the middle of the pack for developed countries). Since that time there has been a 25% devaluation in currency to the EURO. I'll let you do the math what that says about our economy and quality of life by comparison.
http://www.nationmaster.com/graph/eco_gdp_rea_gro_rat-economy-gdp-real-growth-rate
While we're at it..... lets compare our system of extreme have and havenots with Europeans. It seems to result in more net prisoners (less freedom), more murders, .more rapes, more car thefts, more executions, more assaults but lower school-life-expectancy and SHORTER LIFESPANS.
(figures are per capita)
http://www.nationmaster.com/red/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp&nofb=1
http://www.nationmaster.com/red/graph/lif_hap_net-lifestyle-happiness-net&nofb=1
http://www.nationmaster.com/red/graph/lif_hap_net-lifestyle-happiness-net&nofb=1
http://www.nationmaster.com/graph/cri_mur_percap-crime-murders-per-capita
http://www.nationmaster.com/graph/cri_rap_percap-crime-rapes-per-capita
http://www.nationmaster.com/graph/cri_car_the_percap-crime-car-thefts-per-capita
http://www.nationmaster.com/red/graph/cri_ass_percap-crime-assaults-per-capita&nofb=1
http://www.nationmaster.com/red/graph/hea_lif_exp_at_bir_tot_pop-life-expectancy-birth-total-population&nofb=1
http://www.nationmaster.com/graph/edu_sch_lif_exp_tot-education-school-life-expectancy-total
And technology? Let us not forget big physics has left for Europe since LHC and Iter while the SSC is gathering dust after government cutbacks.
So there are all these wonderful far rightwing economic theories about how laissez-faire is some Utopian paradise ..... and then there is the reality of wild economic swings and the subsequent social destabilization that occur with an under regulated economy with poorly distributed wealth.
(we're right between China and Laos)
http://www.nationmaster.com/graph/eco_inc_dis_ric_10-economy-income-distribution-richest-10
On the plus side though....we have lots and lots of nukes and we have an excellent media that propagates the myth that we are righteous ubermensche alien asskickers.... when we are decidedly second rate to socialist Europe in virtually every metric. - dboylon, on 10/12/2007, -2/+12Anyone know what Cheney was worth when he left the first Bush administration as Sec. of defense. He had worked nearly his entire life in government. He was worth less than a million dollars. As secretary of defense he started the practice of outsourcing what used to be work done by soldiers (potato peeling, construction, shipping, logistics, etc.) and using private contractors to do the job. He left office and became the CEO of Halliburton...a company who benefited from the new contracts he instigated. Here cheney increased his wealth from less than a million to between 60 and 100 million dollars. He left Halliburton to reenter politics and became Vice President. He steered no bid government contracts to Halliburton worth billions. Talk about quid pro quo. Would you engineer a war if you were paid 60 to 100 million dollars to do it? The first rule of detective work...was it a jealous rage or was it for money. Who benefits?
- BigSlacker, on 10/12/2007, -0/+9Ah, the confusion of "web bloc economics". If you think exchange rate is an economic health indicator, you need to go back to school.
The issue right now is Euro inflation will potentially damage the economies that use it because it shrinks savings and encourages imports over local production. - ardenr, on 10/12/2007, -3/+12I'll explain that one a little... The middle east oil tycoons were looking at switching the oil currency to euros as the dollar was so unstable, about a few months before we went into Iraq for no obvious reason... hmmm.... let me put on my tin-foil thinking cap.
Nah, that's crazy... but hmm... - taxonimous, on 10/12/2007, -4/+13If the dollar takes a fall there will be a lot of pain around the world, it's not just USA that will be hit hard. I for one hope it recovers ...
- dboylon, on 10/12/2007, -2/+10OK...I'll explain for you dummies. At the end of WW2 the US had a ton of gold, an unbelievable manufacturing base, and everybody elses country was smoldering rubble. The Europeans and Americans got together and decided to spur recovery and help facilitate trade by making the dollar the world's reserve country. Goods could be traded easily between all the world's countries by using dollars. Americans were doing most of the building, we were on a gold standard, and our vaults were full of gold. If a foreign country thought we were abusing our role they could return their dollars for gold. Everybody thought this was a great idea because it would spur economic growth, trade, and rebuilding. The world was on a Sterling standard before and the new system would better reflect the rise of the American power and the decline of the British power. The US financial institutions like it because they now play a role in all the world's banks and our government liked it because it created a huge demand for dollars. This is what Kissinger meant when he said control the food and you control the people, control the resources and you control the continent, control the money and you control the world. This system worked well for years...until our deficit spending got out of hand because of the guns and butter approach to the Vietnam War. At the end of the war the French felt our spending had gotten out of hand and wanted to return huge amounts of dollars for gold. Nixon said hell no...and closed the gold standard. We inflated like hell to cover our debts and the world's financial institutions were buckling...it looked like the whole thing might collapse...Energy prices were through the roof...Israel fought a war...and OPEC responded by raising prices...things were looking ugly. Carter sent the Navy to the Gulf, got the Saudis on the phone, and made them an offer they couldn't refuse (if you know what I mean). Now OPEC requires all sales to be done in dollars. Anybody in the world who wants to buy oil needs dollars to do it. All of a sudden everybody needs dollars again. Our inflation problem is solved and our economy evens out. The aritifical demand for dollars helps prop up the US economy in this fashion. The US dollar is on a sort of Oil standard now. Yes...this does play a role in the Iraq war...you would be stupid to think it didn't. Iraq is a mess but their is a Lebanese company building a nice refinery in what could soon be Kurdistan...That Lebanese company is just a front of course...but the Arabs don't need to know that. No, the US military isn't going anywhere. They will salvage what they can from the fiasco. Sadam started selling his oil in Euros before the war. One of Bush's first acts after taking over Iraq was to sell Iraqi oil in dollars. Any questions?
- CiXeL, on 10/12/2007, -6/+13our own vice president is betting against the country?
wow. that sucks - RedbeardUH, on 10/12/2007, -1/+8With a weak dollar.....exports increase and the trade deficit decreases....You guys are afraid of a weak dollar and afraid of a big trade deficit.....these are fairly mutually exclusive in a globalized economy. This is why Germany was afraid of an overly strong Euro (notice how they said that if the euro jumped to 1.5 there would be problems...) because then their BMWs would be prohibitively high.
As for the fact that auto sales have gone up...that's largely because of an expansion into new markets and the fact that US spending hasn't really slowed down a whole lot. Give it a few years.
Nothing to fear from this article except fear itself. - mustafya, on 10/12/2007, -10/+17I hate to hurt everyone's feelings but the value of the dollar and its possible depreciation pales in comparison to the real problem with our economy and monetary policy. (Ask an economics professor about what our social programs will start doing to the economy in about 10 - 15 years).
- Nichevo, on 10/12/2007, -30/+36The trusted American leaders have sacked the economy now that they have made their money. Bush and his buddies Cheney and Ken Lay did an excellent job for their masters, but now it's time for the democrats to come in and continue the masters plan to give away the country to the U.N., remove rights, and complete the trans-American union. You think there is a gap between rich and poor now, the whole continent will be like mexico before you know it.
Don't worry though, lots more money to be made after the fall... For the rich.
Mod me down, just remember me when you finally wake up in a few years. I really don't care, I stand for the same guy you harassed during the beginning of the righteous Iraq war... - Calculon64, on 10/12/2007, -2/+8Unofficial M3 figures are hovering around 13%. Why do you people think the Federal Reserve stopped reporting M3?
- mookiemookie, on 10/12/2007, -6/+12@ p0und
"please name one european country with a higher gdp."
If you want to get technical about it, the EU has a higher GDP than the US. - cosmicv, on 10/12/2007, -2/+7Gotta love partisan morons that attribute evil economic badness to one party...as if "their" team is holier then thou.
Both parties are corrupt and the sooner you learn that, the sooner your party worshiping ass will stop being surprised when its YOUR teams nonsense that happens to be on the front page that day... Amazing you guys still trust politicians of ANY stripe. - mustafya, on 10/12/2007, -3/+8Well, honestly it is better for goods to be cheaper for us than it is for our goods to be cheaper for others. This is because the US Economy is pretty well developed. Only a developing economy (with corresponding high growth rates) wants their exports to be cheap. Of course there is a limit to how much our trade can be imbalanced by these flows. Once that limit is reached we (surprise!) see a revaluing of the dollar as part of the natural equilibrium that keeps things from getting too out of whack.
- geekee, on 10/12/2007, -0/+5"Why not make US goods cheaper abroad? Anything disturbing about that?
Jobs? Factories?"
That's what a weak dollar effectively does. - mustafya, on 10/12/2007, -3/+8I am both an econ and finance major and walk this month...
I pretty much agree with this article after scanning over it. Our fiscal policy and trade balances have been leading us towards a large devaluation of the dollar. I honestly don't think this would surprise any well informed currency watcher. - mustafya, on 10/12/2007, -6/+10@ardenr
Good point, the war is a humongous financial drain on our economy and really screws up the budget. That is probably the biggest problem I have with it. - pegme, on 10/12/2007, -2/+6I know on a personal level I've cut up all of my credit cards and am now saving a large percentage of my income. Most of my friends and associates are doing the same. I can only assume that this is part of a general trend in the USA to not spend more than you make, especially since the real estate market is cooling off.
The decline of the Dollar is more bad news for Europe than it is for the USA.
By the way, the submitter is an ass. "The Fall of the Mighty Dollar" is obviously a title that was written by someone who has no clue how economies 'actually' work, and no presence of the past. The USA was the currency standard after WWII from the Marshall Plan onwards. Once the EU was formed, it became the only real competitor to the Dollar's stability. The EU has yet to prove itself as a sustainable economy. They still have a lot of Unionwide issues to work out and their healthcare plans are way to expensive.
Anyway, don't you worry about the USA, we always figure out a way to get back on top. - jtbauki, on 10/12/2007, -2/+6It would make it cheaper, but the Asian and Latin American countries undercut the US so much that there is USA just can't compete against them. China has already developed its infrastructure and other 3rd world countries are following suit.
We are stuck between a rock and a hard place. - wendelgee2, on 10/12/2007, -13/+17You're right, it's definitely the fault of our needless social programs. Because, everyone knows that the European countries beating us have bare-bones social programs. You really hit the nail on the head, pal. /sarcasm
- dboylon, on 10/12/2007, -2/+6China has a middle class of 300 million people. What is the population of the US? The world is a changin.
- senseigmg, on 10/12/2007, -0/+4The Yuan is NOT floating.
http://www.iht.com/articles/2006/12/13/business/trade.php
"The Chinese fear that letting the yuan float upward could massively weaken their export-driven economy. The textile industry alone supports 90 million workers but makes minuscule profit, Yu said, so a drop in sales could force millions out of work or require more subsidies to keep them employed." - ardenr, on 10/12/2007, -14/+17@p0und - Hey how about I name the European countries with a better quality of life... Nah, GDP is the REAL indicator, isn't it?
Stupid traitorous *****, GDP means ***** to those who aren't rich.
/Righteous Anger - hootymcboob, on 10/12/2007, -1/+5hey sanman, care to back that up? the only thing I could find was Soros went around saying common sense things like the Russkie's are moving to euro's. Quite the difference between talking about something and putting your money where your mouth is.
Time for you to put up or shut the ***** up. - senseigmg, on 10/12/2007, -1/+5"Who is this "someone" that will convert OPEC to the Euro? Oh yeah, the Oil Sheikhs in Saudi Arabia, Syria, et al.
Maybe the whole reason we went into Iraq was as a favor to Saud?"
The OPEC president right now is the Nigerian Oil Minister.
http://www.businessinafrica.net/news/southern_africa/546651.htm - ardenr, on 10/12/2007, -6/+9@Mustafya... My biggest problem with the war is the erosion of our civil liberties and the 3,000 American casualties, and the huge Iraqi losses, and the net increase in terrorism... But yes, our economy will suffer greatly, and just to remind everybody that when the budget is that screwed the lower classes are the first to suffer, followed very shortly by the middle and upper middle classes.
Right now the middle class is suffering. The adminstration can spin the numbers all they want, but we're in a position now where even raising the minimum wage could trigger a meltdown (so Republicans say). That, and I'm sure many of you have noticed how many of your friends with college degrees can't find work for some reason.
Guess what guys - tech jobs are the next to go severely down hill. They are among the easiest to outsource as well. All I can ask of America is to start to pay closer attention to politics, and not get discouraged by the amazing ***** you will see when you do. It's up to us, the rich won't give it away, they never have. - budiversonjr, on 10/12/2007, -3/+6Why not make US goods cheaper abroad? Anything disturbing about that?
Jobs? Factories? - dboylon, on 10/12/2007, -0/+3Cheney's history is easily researched. The "revolving door" is obvious is this case. It is not hidden. Cheney did not try to cover his tracks. That the media or the democrats have not raised this issue should set warning bells off in all American's heads. Diane Feinstein of CA lives in a mulit-million dollar mansion. She is able to do so because she married the CEO of a defense contractor who has also made his millions the same way Cheney did. It has nothing to do with Democrat/Republican. It has everything to do with the corruption of our political leaders. The media, the democrats, the republicans argue about how the system is managed. They don't argue about the system. Because their greedy little hands have control of a yearly budget worth trillions and they will not upset the system. Ross Perot tried to upset the system. His family was threatened. He dropped out of the race and came back in with a more conventional platform. Perot had to agree to debate within the framework of the system....he was made an offer he couldn't refuse. This is what happens to empires. The system collapses from corruption at the top.
- RedbeardUH, on 10/12/2007, -3/+6@cixel
The US, believe it or not, is a huge manufacturer. Think of the size of our country in terms of land and think of the raw materials in it. That's probably the US's biggest asset (along with its high and stable population).
Oh, and don't forget the amount of food we produce. The US feeds the world. - hexed321, on 10/12/2007, -2/+5Of course, this actually makes America more competitive on the world market, if you follow economic theory. The lower the dollar goes, the cheaper it is for foreign countries to import goods from the states, meaning more trade for America. Supposedly.
Of course, this means nothing while China keeps it's currency artificially lower than the dollar, doing exactly the same thing. - turricanz, on 10/12/2007, -0/+3even though the -average- chinese citizen might not make a lot of money, being a western professional working in bejing will probably net you a lot of money.
- mookiemookie, on 10/12/2007, -1/+4And it'll only get worse as the trade deficit (especially with China...up 14% from this time last year) grows. We depend heavily on Asian investors to buy our Treasuries in order to finance our debt. It's a double whammy.
BTW: Financial Analyst here, finance major back in college. That knowitall enough for you? - dboylon, on 10/12/2007, -1/+4hahahaha...of course they quit publishing M3 to hide their inflation, you have to be a complete idiot not to know that. My question...how many of you giants of economics own gold today? I do...started buying when gold was just under $300 an ounce. I think $630 is a bargain.
- MmmmmDonut, on 10/12/2007, -1/+4There is a simple reason the diggs on comments are so low.
Most digg comments don't know any thing about economics and thus cannot make sensible comments about an economic matter.
How many of people that have commented this article have any experience with economics? or at least take a single course in economics?
I can write comments about the latest developments in heart surgery. But since I don't know anything about heart surgery, would my comments make any sense? I understand my lack of knowledge, and so I don't write comments about things i dont know. Common Sense, right?
For some reason, this bit of common sense is thrown out the window when ever people talk about economics.
I am not writing this to insult anyone. Only to plead that people learn more about economics and how the world economy works. It is actually interesting stuff.
If you are still in school, try the class in economcs. If you are past your school days, read the wikipedia entries. I also recommend reading Freakonomics and Undercover Economist.
Knowledge is power. It will protect you from all the alarmist *****, you see in life. (like most of the comments on this article) - dboylon, on 10/12/2007, -4/+7You touched on a sore point with American's here. They love their welfare programs (social security and medicare). To bad their politicians have been waging stupid wars rather than saving up money to account for the demagraphics of the baby bombers. The poster at the top of this thread is 100 percent accurate. What is going to happen is they will cut the increases for inflation...they will reduce benefits...they will increase the retirement age...and they will inflate and inflate and inflate. Until most elderly are living with their children again. American's are the biggest suckers in the world. OK American dummies...you want proof. Do you know who David Walker is? He is the comptroller general who every congressman runs from everytime they seem him coming. He has been trying to present to them a simple power point presentation that shows the dangers to America's favorite welfare programs in an effort to get them to do something about it. The presentation is so simple a 5 year old child could understand it. He did this purposely so no congressman could say it is all over their heads. They are just like you though. They believe the American empire is unstoppable....no matter how stupid it behaves. I'm sure the Romans felt the same way.
- geronimo, on 10/12/2007, -2/+5M3 reported eurodollars which is very important, especially considering how the UK has mysteriously doubled their purchases of US treasuries ever since. If say the fed is somehow funneling printed dollars into the UK to snap up treasuries, M3 would show this.
- mookiemookie, on 10/12/2007, -1/+4Um, the decline of the dollar DOES make our goods cheaper abroad.
- ardenr, on 10/12/2007, -2/+5For anyone who just got here and is wondering why the positive diggs are so low, it's apparent trolls have no argument against this one so are just digging all sane points down.
Seriously guys, rethink your life. Discussion has it's place, and this is one of them. Let the people talk for a change. - annonimality, on 10/12/2007, -2/+4@Redbeard
"With a weak dollar.....exports increase and the trade deficit decreases....You guys are afraid of a weak dollar and afraid of a big trade deficit.....these are fairly mutually exclusive in a globalized economy"
I would have to disagree with you on this point. Between 1996 and 2006 the US dollar has lost half its value, when compared to gold, while the trade deficit has continually increased. That is because the dollar is not money, rather it is currency (in 1971 President Nixon took us off the gold standard which is exactly what the German government did in the 1930's). So basically the US treasury can just print more dollars to compensate for the growing trade deficit, which then leads to a weaker dollar. - geronimo, on 10/12/2007, -1/+3Another thing to consider is the world economy is no longer dependent on the USD. Countries like China have slowly gone away from the USD. They of course will tout it as stable while they get rid of it, but once they are off the dollar, look out below. It is similar to the dot com boom and bust, the people pumping the USD and talking about how stable it is are busy diversifying(as they like to call it) away from the dollar. China now exports an equal amount to europe and the USA. USA GDP growth could fall to 0 and China's GDP goes from 10% to 8% - like a fly on the windshield. Not to mention the significant Chinese consumer. If there is a recession or depression then other countries will be affected but it will be nothing like before where a small blip in the American economy reverberates everywhere.
This will just create more stability across the world. The rich will just get richer as they follow the money out of the USA. That will trickle down a little so the key is to be one of those rich people. - MelvinSchlubman, on 10/12/2007, -2/+4"Just wait 'till someone starts trading oil in Euros. Then you're in trouble."
Sorry, I still don't follow. In a vague sense, I can see that the Euro (or any other currency) replacing the US dollar in peoples' minds as being not a good sign for the USD. But, how is it that oil being priced in Euros instead of USDs a bad thing for the USD. X Euros equals Y USD -- so what?
Please don't mod me down because I'm asking a dumb question. I already know I'm dumb :-) - FrickD, on 10/12/2007, -0/+2Is Soros the Vice President?
- cbergeron, on 10/12/2007, -3/+5How do you figure? Since the Gold Standard was eliminated in the US, the US dollar has been the baseline for almost every other country in the world. Every major country has borrowed against the dollar, so the US Dollar will continue being the dominant baseline for every currency out there for quite some time to come.
Even with China's $18 billion invested in US Treasury Bonds, the US Dollar stabilizes every currency in the world.
This is clearly FUD. - h0tcarl, on 10/12/2007, -1/+3Its got something to do with our debt. Basically we have a huge debt, which is a promise to pay the lender back in dollars. We have used our muscle and economic might to make sure the only way you can buy oil is with dollars. If someone **Russia*Cough*Cough** were to take a different currency for oil, there would be less incentive to hold the dollar. When you combine this fact with the faltering US economy, that makes for the perfect storm. No reason to buy debt because dollars are not as useful as they once were, plus real economic problems in the US. This causes the dollar to fall, which could lead to a mass selloff. It starts as a trickle....
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