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The sinking dollar will do wonders for our trade balance.
...look no further than Capitol Hill and 1600 Pennsylvania Ave to point the finger. Oh you can add the Federal Reserve as well.
Anything which ties it's value to the US Dollar will see huge price increases for the foreseeable future due to out of control government spending...
Hey, I like pointing fingers as much as the next guy but how about we also try and hang on to reality.
In this wonderful information age we live in anyone can look at past exchange rates (from say, the Fed here) and compare them to the CPI (from the BLS here) or the federal budget history (from the GPO here).
First, government spending and the dollar aren't affecting each other--
--and second, a falling dollar has not increased inflation:
Sure, people can say that the facts don't sense and that the newspapers say otherwise, but reality is what is and it doesn't have to make sense and get reported.
...The way our government measures INFLATION is by HALF TRUTH. Inflation is ALREADY WAY UP for consumers. Telling us that energy prices and food are NOT to be factored into inflation (using those dubious decisions they make about how to measure inflation...
...like SUBSTITUTION, for example) is pure nonsense...
...And the reason Inflation stats was done these nonsensical way was to save the government money on COLAs...
Bureau of Labor Standards said:...none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI ...
This has already been seen in autos with the Japanese earthquake/tsunami with the spike in auto parts. Look at the threads and news stories about GM and Chrysler to see how rapid this change can happen. A collapse of the dollar has several stop breaks:The sinking dollar will do wonders for our trade balance.
AT FIRST, only because imports will go down, of course.
But if the decline in the dollar become the norm?
Well then that will also make our manufactures cheaper on the world markets.
A slow decline in the dollar's worth over time can be a good thing.
A rapid drop in value will be disaster.
The sinking dollar will do wonders for our trade balance...
Seems like what's really happening is that most Americans measure price trends with tools like the PCE deflator, the CPI-U, etc., and then regulate the dollar's value at a couple percent above last year's prices.
Tell me why you're saying this is suicidal.
Simple....As the Dollar free falls vs major currencies,
OK, if we're talking politics and what everyone says then we're agreed that the buzz is that dollars are worthless. In real life we keep our dollars locked up safe becuase we know they're worth well, money. When we personally go to exchange our dollars for foreign money we know it's stable:
Real life/politics. I've never been comfortalble with double think.
--you mean, the People's Republic is selling $10k T-bills for fifty cents each first come first serve while they last? In real life I'd buy all I could as would a world of bond traders. I'd make a fortune and China would loose trillions.
China loosing trillions would hurt the Yaun not the dollar.Additionally, a call could be made to suspend the Dollar as the basis currency for oil and other futures. Does this not trigger a red flag for you?
The national debt's important, and treasury notes are traded in dollars, not foreign money.How much longer and how much more are you willing to see the US go into debt and how much larger can you stand to see deficit spending go on?
You had lots of other good stuff there but like I said we're talking in different worlds, political banter vs. real life.
Create that thread if you would please, sir. I'm far more interested in the why rather than the what because that result does not conform to any economic model that I am aware of. Given the way Keynesianism is being given the heave ho in most of Europe we are rapidly running out of economic models that have not been disproven.The sinking dollar will do wonders for our trade balance...
It's amazing how many people say that, including so many people who should really know better.
Fact: exchange rates don't affect the balance of trade.
Rather than get into a chat about why there's no affect (though I'm perfectly willing to explain it all with sources), the only thing that's really important is that exchange rates don't affect the trade balance and all we need to do is look at the trade balance and the exchange rates and see for ourselves:
They got nothing to do with each other.
...How anyone can just blithely dismiss the federal reserve's policy of pouring printed money into the stock market just to give the appearance of prosperity is a mystery. .
...How anyone can just blithely dismiss the federal reserve's policy of pouring printed money into the stock market just to give the appearance of prosperity is a mystery. .
First, the printing presses are not under the control of the Federal Reserve. They're run by the Treasury Dept. which is a separate agency. Sure, political pundits say 'the Fed prints money' but they don't do it in real life. Even if they did, the printed currency is just a couple percent of the total money supply.
Second, the minutes of the board of directors of the Federal Reserve have no recorded decision to buy up common stock for the purpose of artificially raising indexes. Even if we went the conspiracy route and said the order was given in secret, then to make total market capitalization go from $12T to $24T would have taken $12T worth of stock purchases. That would also mean the Fed's now filling out half the proxy forms for the entire US corporate market, or voting the shares to directly.
What you're saying is bounced around a lot so I have to admit you're in very good company, but please cut me some slack here and see why this has got to look like something out of a comic book.
The 'dead-tree' press has a really bad habit of turning Bernanke's words upside down so for me the press is only good for letting me know what the press is saying, not what the fed says. For that the fed can speak for itself and the fed's website has a page of all their testimony....Bernanke believes that QE2 has affected stock prices, and that's a good thing. He said so in a Washington Post article and I think at his Humphrey-Hawkins testimony, or whatever its called now...
...More SUPPLY SIDE solutions that not only won't work, but that actuallly exascerbates the problem of the imbalance between supply and demand....
...Everyone gripes about the Fed, but their job is stable prices with full employment and they're doing a far better job than their predecessor...
Time to go long the USD.......I expect a major rally....
Seems early to me but currencies are not a market I deal with.Time to go long the USD.......I expect a major rally.
Long T-bonds were at 4.75% earlier this year when I bought them- they are now at 4.36%. With a duration of 15 thats around 6% so far this year not counting the dividends. Add in the dividends and the are poised for double digit gains.....again (made over 15% on them last year). But but, the interest rates are going higher right??? The dollar is going lower right??? Buy Gold??
See which way the herd is running, then go the other way.
Time to go long the USD.......I expect a major rally.
Long T-bonds were at 4.75% earlier this year when I bought them- they are now at 4.36%. With a duration of 15 thats around 6% so far this year not counting the dividends. Add in the dividends and the are poised for double digit gains.....again (made over 15% on them last year). But but, the interest rates are going higher right??? The dollar is going lower right??? Buy Gold??
See which way the herd is running, then go the other way.
