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83 Comments
- clouds31, on 11/06/2009, -1/+37"I'll give you my 2 cents, which used to be a dollar."
Stephen Colbert D.F.A - CaliforniaEagle, on 11/06/2009, -6/+37Yup...and losing more and more value every day!
We can thank the Fed and our Government for that! - Ebacherville, on 11/06/2009, -2/+21lets see we added how many trillions of dollars to the financial system... the outcome is prety predictable.. im suprised that inflation has been as slow as it has been , but alot of those banks that have all these dollars are just sitting on the cash.. once it starts flowing .. watch out.
- DiggerLater, on 11/06/2009, -3/+19Gold went up drastically today. Obama signed another $24,000,000,000 of "stimulus" today. Unconnected? I don't think so.
- argoff, on 11/06/2009, -10/+22Well, lets see .... has the amount of US dollars being pushed into circulation gone down, ..... nope they've gone up drastically. TARP anyone? Has overall credit in the US economy declined? Nope not at all. Has the amount of government spending percapita gone down,.... nope it's gone up drastically. Has the amount of government debt gone down per capita .... nope it's gone up drastically. Have the tax rates gone down, nope not at all. Has the amount of government interference in the private sector gone down ... nope, the government even owns GM for chrissake. Health care anyone? Cap and trade anyone? In fact, less than 1% of the people on capital hiss are talking about reducing spending and cutting back on the size of government. In sum. The USA is going to be in deep dodo for the forseeable future, which means the dollar is too.
IMHO the question is not if the dollar is doomed, it is, the question is how much are other countries going to ruin their currencies to manage social policies and keep their exports competitive. Till things change, it might be wise to panic into gold and silver about now. - lead2thehead, on 11/06/2009, -2/+14Of course it is - just like the Ruble did in the 1980s after Russian government's cold war spending spree.
- bbtrev, on 11/06/2009, -4/+13I think you're also forgetting your peoples' own insatiable need to spend beyond their means as well as the lack of regulation that facilitated the crash in your economy.
- Spirods, on 11/06/2009, -3/+11Yes
- Pschkqitzsough, on 11/07/2009, -2/+10You think banks WANT to give billions to people who couldn't afford to pay it back?
The government was REGULATED into giving money to people who didn't usually qualify (called sub-prime) and would be fined heavily for not complying with the law pushed through by the Clinton administration (and the Republican controlled Congress) back in the early 90s causing a HUGE boom in housing and our entire economy.
So it wasn't lack of regulation it was lack of GOOD regulation.. - inactive, on 11/06/2009, -3/+11Awww. How cute. Our little friends from the north think that they are independent of the US.
- SpeedyG, on 11/07/2009, -1/+8Long-term, the dollar is dead.
The U.S. economy simply cannot grow at the levels of China and India. We are going to cease to be the world's dominant superpower. We can either slide back gracefully as the world's thinktank and peacekeepers, or we can fail hard. All signs are pointing to "fail hard" right now. - frcc, on 11/06/2009, -2/+9Bernanke and the other saviors of the world are on it. Everything is fine. Go back to sleep.
- muffcakes, on 11/06/2009, -2/+9This is not a cyclical problem. This is a unique financial situation that has been building up since Reagan and which is taking place at the same time that a number of other problems related to unsustainable practices and exponential population growth are coming to a head.
- sangjmoon, on 11/06/2009, -12/+19Obama and the Democrats will do their best to put the dollar into cardiac arrest by printing money like mad to fund their unsustainable programs. Along with the coming economic armageddon when the bulk of the baby boomers retire and send Medicare/Medicaid and Social Security through the roof, the dollar is going to look almost like play money. However, I hope there is enough buffer so that the US people will learn from this and swing back to more fiscally conservative policies of decreased government spending and taxation. If there isn't enough buffer, this is the start of the end of the USA as the country we know now because it will tear itself apart under the economic stress.
- stonebear, on 11/07/2009, -0/+7The world will continue to need toilet paper.
- etx313, on 11/07/2009, -1/+8No, It's dying quite quickly. Everything your parents and grandparents worked so hard for is being drained away.
- Wargala, on 11/06/2009, -5/+12Let's spend $890 billion over 10 years on healthcare! Let's spend billions to bail out AIG! Let's not put anyone in jail who said that jobs at their company was "saved", when all they did was give pay raises to existing employees!
- LordSkywalker, on 11/07/2009, -0/+6Gold has now hit $1,100 per ounce and the dollar is at an all time low, so yeah, I'd say so.
- bbtrev, on 11/06/2009, -0/+6Sleep? there's no time for that, me and my fellow sheeple have to go get our wool clipped off, hopefully we get paid in Euros ;)
- MrFunStuff, on 11/07/2009, -1/+7The mortgage sector, which caused the financial sector, is the most heavily manipulated sector in the economy. Fannie/Freddie own 50% of the $12 trillion worth of mortgages in the US. This is an unprecedented level of government intervention in a sector of the economy.
It was two government interventions, Fannie Mae and the CRA, that created the subprime bubble:
Fannie Mae:
http://www.nytimes.com/1999/09/30/business/fannie- ...
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
--
The Community Reinvestment Act:
http://www.city-journal.org/html/10_1_the_trillion ...
The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities
Howard Husock
Winter 2000
The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.
--
The only institutions that needed regulations were Fannie/Freddie, since they were government sponsored enterprises, but congress blocked oversight for them:
Don't blame FreeMarket when it was state intervention that destroyed the financial sector. - muffcakes, on 11/06/2009, -0/+6Yeah that really surprised me too. I thought that th dollar would be in free-fall by now.
- Pschkqitzsough, on 11/06/2009, -3/+8Ever heard of a trend? Yes it bounces up and down, but the prevalent direction is most certainly down. I.e. look at long term 50 year charts not 10 year and you can see it's crashing faster and faster over time.
We are going into debt levels never seen before. George Bush's less than half a trillion deficit sucked, but it's nothing compared to the trillions upon trillions of dollars of debt/stimulus the current admin. is pushing through.
I couldn't stand Bush, but it's odd that the same people blaming his $400+ billion deficits for the economic collapse don't mind if Obama plans to spend $1.2+ trillion in deficits (so in total more money than that) every year for 10 years to fix the problem... This will NECESSARILY destroy the dollar over the next decade in an exponential manner as the dollar will [rightly] be seen as a declining asset and be traded away.
It is obvious in my mind that America is the most corrupt country in the world simply by looking at the fact that we are the only country in the world where hemp is STILL illegal to grow. You can't get high from it, but you can make 25,000 products with it from oil and plastics to textiles (can replace cotton completely), food, all paper was made from hemp before it was banned and now it's all made from trees. To this very day tons of people still believe the government made lie that hemp and marijuana are the same thing.. The gov. doesn't still make the claim, but they are left with BS reasons for its illegality and most Americans don't even know what it is anyway, because it's been illegal for 70 years.
Too many people believe the government does not lie (on both sides)...... - freakFlag, on 11/07/2009, -0/+5So is the life of a Fiat currency
- funkboy27, on 11/06/2009, -2/+7how about bush and his cronies printing money to fund an unsustainable war (or two)?
At least the Obama administration is trying to do some good for the USA. - colto, on 11/06/2009, -1/+6Yes. We should not doubt our shadowy overlords.
- Pschkqitzsough, on 11/07/2009, -0/+4Obviosly I meant the banks were regulated by the government to give out sub-prime loans...
- bbtrev, on 11/06/2009, -3/+7that's what my girlfriend says..................
- aetouch4, on 11/07/2009, -0/+4Can cheap labor come from the US?
- bdbr, on 11/07/2009, -0/+3The inflation-adjusted price of gold in 1980 peaked at $2,189/oz. Companies shouting about how its at an all-time high ignore inflation because they just want to sell it to you.
http://inflationdata.com/inflation/images/charts/G ... - zeebo, on 11/07/2009, -2/+5Gold is a fiat currency. Its just heavier and more impractical than most. Buying into it does nothing to benefit society. Its essentially cashing out and going home.
If you're worried about your money, invest in a few infrastructure companies that aren't going to go anywhere anytime soon, and buy some good land. After all, if things get to the point where there's no government to back the currency, you can't eat gold, and bottlecaps make a much better unit of exchange. - inactive, on 11/06/2009, -2/+5Why wouldn't it be?
- curunir, on 11/07/2009, -2/+5Do you *really* think after 10 years it will only be $890 billion??
- bbtrev, on 11/06/2009, -1/+4i'm less than excited at the prospect of our highly manufacturing dependent economy crashing and burning with theirs.
- stonebear, on 11/07/2009, -0/+3Oh that's just the frying pan. The fire is all those petrodollars about to start liquidating as oil producers switch to other reserve currencies. And that's assuming China, Japan and Korea will continue to sit on their dollars once the run is on.
- protodon, on 11/07/2009, -0/+3Canada is the tip of the US iceberg. Read into that as many ways as you'd like to but the US basically keeps them a float.
- gkiltz, on 11/07/2009, -0/+3No more so than it was in 1973 and 1982.
Given the historical record, I have to like those odds. - shawnfromnh, on 11/07/2009, -0/+3Till we get our manufacturing base the has been offshored back we will still have high unemployment. That in turn will require the government to fund at much higher levels than normal welfare, unemployment, food stamps, and a slew of other programs to help all these newly poor people/families out and keep them from becoming homeless if possible. It also mean lower spending, less tax revenues, etc. The inflation from all this combined with what we owe on the dept will combine and increase till either 2 things happen.
1. We face reality and renegotiate our trade treaties so it is not so rewarding off-shoring business because of new tariffs or global quotas and then we rebuild our domestic manufacturing base which is just a fraction of what it was in the mid nineties.
2. We go through a period high inflation for quite a while till the dollar is worth about 1/3 or 1/4 of it's current value. This in turn will make our labor costs about the same as China's or Mexico's which when you add in transportation costs as in shipping something from China to the US it will be cheaper to just make the stuff here.
We face interesting times in the near future. - TexanRudeBoy, on 11/07/2009, -0/+2A country like China can, and has been increasingly, consume more of their own products. There is absolutely no reason for them to keep loaning us their saved money just so we can buy their products with it.
- rmxz, on 11/07/2009, -2/+4Considering $4 coffee at Starbucks these days, I'd say the dollar's already half dead.
I'd go so far as to say that the Housing Bubble wasn't even really a bubble -- it was just a slightly leading indicator of the fall of the dollar.
If we soon find ourselves buying trillion-dollar loaves of bread, all those people who got million dollar no-money-down loans are going to be feeling alright again. - bdbr, on 11/07/2009, -0/+2People seem to forget how much the US economy still drives the world economy (which is odd, given that the US economy's nosedive just last year tanked the world economy). Countries like China and India have a huge stake in keeping the dollar strong enough that their imports remain cheap. A weak dollar will just make it cheaper for America to manufacture stuff at home...which is good for US jobs, but it means everything will cost more.
- darkened, on 11/07/2009, -0/+2You argument is a logical fallacy. The housing market was indeed a bubble. As proof is the massive correction (ie decline in prices) if the housing bubble was more linked to the inflation of the dollar housing prices would indeed be continuing to skyrocket. The housing market was a significant dollar contraction, a good one that is one of the few things that is most likely keeping our dollar value from spiraling out of control down the tubes.
- dralezero, on 11/07/2009, -1/+3Time is late.
- Anth0n, on 11/07/2009, -1/+3You mean like continuing the wars?
- Propethic, on 11/07/2009, -1/+3Let's spend billions to kill people
- CaliforniaEagle, on 11/07/2009, -0/+2I have a feeling the government lies to us about what the real inflation numbers are to remove the possibility of mass panic. What do you think?
- andyroo316, on 11/07/2009, -0/+2Just because you can get $2 for every £1 doesn't mean you are saving anything.
Something that's £100 in the UK will be roughly $200 in the US, too. So no real saving. Plus you gotta add all the importing and postage costs.
If something's actually cheaper in America ($75 compared to £50, say), it doesn't mean it's anything to do with the conversion rates, it just means it's cheaper to buy in America and would be whatever the conversion rates.
Companies tend to adjust their prices, so if something was $200 and that was £140 in the UK due to conversion, as soon as it becomes 2:1 ($:£), the price will soon go up to roughly $250-$280 again. - transapien, on 11/07/2009, -0/+1I dugg it up I both love and hate America
- rif42, on 11/07/2009, -1/+2At least for the banking sector Canada has proven to be solid and reliable sector during the financial crisis, much different from the gambling industry that the US banks have proven to be.
- inactive, on 11/07/2009, -1/+2I think it's China's century but I wouldn't count the US out..
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