Sinking Dollar sinking Country...

[argdiesel]

I just read this article and thought it was pretty intresting..

The euro, worth 83 cents in the early George W. Bush years, is at $1.45.

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The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.

Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.

Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?

Nope. The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. Indeed, Bush is presiding over a worldwide abandonment of the American dollar.

Is it all Bush's fault? Nope.

The dollar is plunging because America has been living beyond her means, borrowing $2 billion a day from foreign nations to maintain her standard of living and to sustain the American Imperium.

The prime suspect in the death of the dollar is the massive trade deficits America has run up, some $5 trillion in total since the passage of NAFTA and the creation of the World Trade Organization in 1994.

In 2006, that U.S. trade deficit hit $764 billion. The current account deficit, which includes the trade deficit, plus the net outflow of interest, dividends, capital gains and foreign aid, hit $857 billion, 6.5 percent of GDP. As some of us have been writing for years, such deficits are unsustainable and must lead to a decline of the dollar.

A sinking dollar means a poorer nation, and a sinking currency has historically been the mark of a sinking country. And a superpower with a sinking currency is a contradiction in terms.

What does this mean for America and Americans?

As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they will demand more dollars for those goods. This will mean rising prices for the imports on which America has become more dependent than we have been since before the Civil War.

U.S. tourists traveling to the countries whence their ancestors came will find that the money they saved up does not go as far as they thought.

U.S. soldiers stationed overseas will find the cost of rent, gasoline, food, clothing and dining out takes larger and larger bites out of their paychecks. The people those U.S. soldiers defend will be demanding more and more of their money.

U.S. diplomats stationed overseas, students and businessmen are already facing tougher times.

U.S. foreign aid does not go as far as it did. And there is an element of comedy in seeing the United States going to Beijing to borrow dollars, thus putting our children deeper in debt, to send still more foreign aid to African despots who routinely vote the Chinese line at the United Nations.

The Chinese, whose currency is tied to the dollar, and Japan will continue, as long as they can, to keep their currencies low against the dollar. For the Asians think long term, and their goals are strategic.

China — growing at 10 percent a year for two decades and now growing at close to 12 percent — is willing to take losses in the value of the dollars it holds to keep the U.S. technology, factories and jobs pouring in, as their exports capture America's markets from U.S. producers.

The Japanese will take some loss in the value of their dollar hoard to take down Chrysler, Ford and GM, and capture the U.S. auto market as they captured our TV, camera and computer chip markets.

Asians understand that what is important is not who consumes the apples, but who owns the orchard.

Other nations that have kept cash reserves in U.S. Treasury bonds and T-bills are watching the value of these assets sink. Not fools, they will begin, as many already have, to divest and diversify, taking in fewer dollars and more euros and yen. As more nations abandon the dollar, its decline will continue.

The oil-producing and exporting nations, with trade surpluses, like China, have also begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in the United States — investment banks and American companies.

Nor is there any end in sight to the sinking of the dollar. For, as foreigners demand more dollars for the oil and goods they sell us, the trade deficit will not fall. And as the U.S. government prints more and more dollars to cover the budget deficits that stretch out — with the coming retirement of the baby boomers — all the way to the horizon, the value of the dollar will fall. And as Ben Bernanke at the Fed tries to keep interest rates low, to keep the U.S. economy from sputtering out in the credit crunch, the value of the dollar will fall.

The chickens of free trade are coming home to roost.

[woo]

hyperinflation is @ risk these days... i tried to bing it to awareness here but gave up quick lol.

[John Kennedy]

hyperinflation is @ risk these days... i tried to bing it to awareness here but gave up quick lol.

Why because you realized Ben Bernanke doesn't post on ncc?

[argdiesel]

haha well i hope people are aware of this

[woo]

Why because you realized Ben Bernanke doesn't post on ncc?

no bc ple talk to me like im stupid like u did right here. ill go and nearly double my money thru commodities annually on my own and leave ncc out of it. happy?

cause i am.

[John Kennedy]

no bc ple talk to me like im stupid like u did right here. ill go and nearly double my money thru commodities annually on my own and leave ncc out of it. happy?

cause i am.

lol I was responding to your ncc put down.. who speaks to you like you're stupid?

[tribaljunkee]

damn i wish i had the money when everyone @ ML was tellin me to buy gold

[tribaljunkee]

euro as well is strong
FRANKFURT, Germany (AP) -- The dollar fell to a new low against the euro on Tuesday amid expectations of more interest rate cuts in the United States and worries about the U.S. economy.

The 13-nation euro rose to a record $1.4571 in late afternoon trading in Europe before falling back slightly to $1.4560. The euro bought $1.4471 late Monday in New York.

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Britain's pound rose as high as $2.0906 before falling back to $2.0883, up from $2.0806 in New York. The dollar rose to 114.57 Japanese yen compared to 114.36 yen late Monday.

The U.S. currency has been on a downward slide since the Federal Reserve's decision last month to cut rates by a half point, followed by a quarter-point cut last week, in reaction to market worries about the U.S. economy driven by the subprime mortgage crisis.

The euro's rise is a sign of its worldwide acceptance, Luxembourg Prime Minister Jean-Claude Juncker said in Berlin, adding that a strong euro was better than a weak euro.

"It is better because it's more credible, because it has been promised that the euro is a respectable currency," said Juncker, who also heads the so-called Eurogroup of 13 countries sharing the euro.

"The euro cannot get indefinitely much stronger much longer than it currently is, but better this way than the other way around."

Upcoming U.S. consumer confidence data could drive the euro even higher, said James Hughes, a market analyst at CMC Markets in London. He said the raft of writedowns by major U.S. banks and brokerages has weighed heavily on the dollar as well.

"Although numbers such as the U.S. consumer confidence data ... may provide further positive direction in the near term, any additional corporate earnings writedowns from the subprime crisis during the summer would be expected to weigh on the dollar, too," he said.

In addition, the euro has been helped by sentiment that the European Central Bank, which meets Thursday, has yet to finish a gradual campaign of rate increases, while the British pound has benefited from expectations that the Bank of England will leave rates untouched rather than follow the Fed in cutting the cost of borrowing.

Although lower interest rates can jump-start an economy, they can also weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.

A higher euro also makes vacations in Europe more expensive for U.S. travelers and can make European companies choose between raising prices or cutting profitability on goods sold in the U.S. With the holiday season approaching, it may also spur more Europeans to make shopping jaunts to the U.S., where the euro and the pound buy more

[woo]

damn i wish i had the money when everyone @ ML was tellin me to buy gold

u can still buy gold. its gunna go over a grand.. watch

[woo]

lol I was responding to your ncc put down.. who speaks to you like you're stupid?

i deleted a few threads upon attack. u wouldnt know.