$5000 GOLD?

[Deanh]

Oh noes! Invest in yen and euros!! Get rid of all your American investments!!! Move to China now!!!

I hear the chinese have developed a gold Bullion thats actually cheaper...now avail at Walmart.

[mustang84isu]

I really haven't seen any conclusive evidence that a lower dollar will hurt the Us a great deal. It will certainly shift your economy away fro ma consumer oriented one, but that's probably a good thing...and it's bad for us. The US dollar probably won't stay down forever though.

 

The dollar being down will actually help our export economy, and may help our manufacturing industry. It will be cheaper to purchase things from American companies and make things here within our borders.

[Ron W.]

I really haven't seen any conclusive evidence that a lower dollar will hurt the Us a great deal. It will certainly shift your economy away fro ma consumer oriented one, but that's probably a good thing...and it's bad for us. The US dollar probably won't stay down forever though.

 

Although it does bother me that the dollar has dropped in value, the other side of the coin (or dollar if you prefer) is that american goods will cost less to foreign purchasers and tourism cost should also be lower.

 

I hear the chinese have developed a gold Bullion thats actually cheaper...now avail at Walmart.

 

What they hey, let'em buy now at what close to $1000.00 per ounce and complain when it drops back to about $300.00 an ounce.

 

p.s. Walmarts chinese goods have lead in them ... weighs about the same .................................. :shades:

[suv_guy_19]

The dollar being down will actually help our export economy, and may help our manufacturing industry. It will be cheaper to purchase things from American companies and make things here within our borders.

 

That is correct...and that's why a low US dollar is bad for most of Canada. Somewhere between 70 and 90% of our exports go south. A low US dollar is good if you happen to be one of the 4 provinces that rely heavily on oil and natural gas exports or the territory that rely heavily on diamond and other mineral exports. It's bad if you're one of the two central Canadian provinces (and to a lesser extent, my mixed economy province) that exports mostly manufactured goods to the US....although it's a plus for energy and minerals also for here.

[Roadtrip]

A weak dollar may entice foreigners to purchase more U.S. goods; maybe it will even help to narrow the trade deficit. But before those who think that U.S. manufacturing and manufacturing exports are a panacea for recovery, they need to be aware of the fact that the U.S. had a trade surplus for all but 18 months during the entire, and utterly depressed, decade of the 1930s. The main reason the U.S. had a trade surplus during most of the Great Depression was that most other countries merely suffered recessions at the beginning of the decade, from which they soon recovered, and once they recovered, they were in a position to purchase American goods at depressed prices. At the same time, American consumers, whose purchasing power was depressed and whose collective psyche was influenced by an immediate need for financial self-preservation, could not, or were not inclined, to purchase foreign-made goods whose prices were artificially inflated by trade tariffs.

 

There are several potentially severe downsides to a weakened dollar.

 

A weak dollar reduces the attractiveness of U.S. Treasurys to foreign investors. When the dollar declines against a basket of foreign currencies, investors will demand higher interest rates on Treasurys that the government routinely auctions off, as a way to offset the devaluation of the return (interest is paid in dollars). This means that the already-astronomical amount of public debt that the U.S. Government loves to incur as a means to fund itself becomes even more expensive in inverse correlation to the value of the dollar. This bodes poorly for the U.S. economy as a whole in the long term.

 

A weakening dollar reduces the value (purchasing power) of savings -- at least those savings that are in cash or cash equivalents. As the dollar becomes weaker, people become less inclined to save -- for such things as durable goods and down payments for houses -- because of the popular belief that the dollar is a poor store of value. Thus they are either inclined to just spend their money outright and not save, or save their money in more speculative and risky investments, such as gold or some stock that Jim Cramer recommends. Either way is not conducive to prudent personal finance, and imprudent personal financial management is one of the causes of the current economic mess.

 

The value of the dollar (versus other currencies) is directly related to the price of oil. Oil is bought and sold in dollars. The lower the dollar goes, the higher the price of oil. Artificially high oil prices are a drain on the world economy.

 

When the dollar becomes weaker, people who use it, people who have saved and invested, feel poorer. (I heard several commentators on CNBC this evening lamenting this very thing.) When people feel poorer, they are not inclined to spend and consume (see the 1930s). There's a field of study called "Behavioral Economics" or "Economic Psychology" that studies and measures how people behave in economic terms as a response to various inputs, events, and perceptions. When people perceive that everything they own (including their retirement accounts) is of lesser value (for whatever reasons, including a declining value of the dollar or the prospect of hyperinflation), they will be disinclined to consume. Even worse, they become disinclined to be productive, thinking that their future prospects are bleak -- which portends a downward spiral for the overall economy.

 

Think that last bit is an extremist, "sky is falling" scenario? Or otherwise improbable? See the late 1970s, when there was no global confidence in the U.S. economy. That lack of confidence led to an inflation rate of 13.5 percent, an unemployment rate of 11 percent, and when then-Fed Chief Paul Volker pushed interest rates to 20 percent (as a means to combat the inflation rate). Interest rates upwards of 20 percent are not exactly conducive to investment and therefore job growth. There was a lack of confidence in the overall economy, and President Jimmy Carter did nothing to remedy it with his infamous "Malaise Speech", in which he seemed to emphasize how bad things were, and actually asked Congress for the authority for gasoline rationing. He talked about how we must rebuild our confidence. Compare this rhetoric to that of Ronald Reagan's, which consisted of platitudes of America being the shining city on a hill, and his never-ending, optimistic vision for America's future -- a vision that was based on pride for American exceptionalism, ingenuity, and entrepreneurship. Carter was sort of a "downer" for the American people. He asked people to wear sweaters as a response to the energy crisis. Reagan was sort of a cheerleader who got the American people fired up -- and his "cheerleading" got them to be productive and prosperous again.

 

The reason for the dollar's decline is because of foreign investors' and holders' perceptions of the U.S. economy, as well as the prospects for America's ability to repay its debt. Those prospects are declining as long as the U.S. government continues to issue more and more debt in the face of declining tax revenues. Those declining tax revenues are a function of more jobs lost, month after month. All those jobs lost are a function of private investors' fear (both real and perceived) of a government that is hostile to business -- a government that threatens to regulate, re-regulate, and regulate some more. How else to reconcile the lowest interest rates in history -- and coincident low cost of capital -- and the lack of demand for that capital? People and businesses are flat-out scared to invest in the current environment.

 

The dollar will resume its status as the world's most quality store of value when the economy associated with it regains some semblance of fiscal sanity, and when the U.S. goverrnment proffers to private business an environment that is conducive to growth.

[Savetheplanet]

Dried elk meat and Wampum are the currency of the future

[NickF1011]

Dried elk meat and Wampum are the currency of the future

 

That doesn't sound very environmentally friendly, especially if you're an elk. :P

[xr7g428]

When the dollar becomes weaker, people who use it, people who have saved and invested, feel poorer. (I heard several commentators on CNBC this evening lamenting this very thing.) When people feel poorer, they are not inclined to spend and consume (see the 1930s). There's a field of study called "Behavioral Economics" or "Economic Psychology" that studies and measures how people behave in economic terms as a response to various inputs, events, and perceptions. When people perceive that everything they own (including their retirement accounts) is of lesser value (for whatever reasons, including a declining value of the dollar or the prospect of hyperinflation), they will be disinclined to consume. Even worse, they become disinclined to be productive, thinking that their future prospects are bleak -- which portends a downward spiral for the overall economy.

 

Think that last bit is an extremist, "sky is falling" scenario? Or otherwise improbable? See the late 1970s, when there was no global confidence in the U.S. economy. That lack of confidence led to an inflation rate of 13.5 percent, an unemployment rate of 11 percent, and when then-Fed Chief Paul Volker pushed interest rates to 20 percent (as a means to combat the inflation rate). Interest rates upwards of 20 percent are not exactly conducive to investment and therefore job growth. There was a lack of confidence in the overall economy, and President Jimmy Carter did nothing to remedy it with his infamous "Malaise Speech", in which he seemed to emphasize how bad things were, and actually asked Congress for the authority for gasoline rationing. He talked about how we must rebuild our confidence. Compare this rhetoric to that of Ronald Reagan's, which consisted of platitudes of America being the shining city on a hill, and his never-ending, optimistic vision for America's future -- a vision that was based on pride for American exceptionalism, ingenuity, and entrepreneurship. Carter was sort of a "downer" for the American people. He asked people to wear sweaters as a response to the energy crisis. Reagan was sort of a cheerleader who got the American people fired up -- and his "cheerleading" got them to be productive and prosperous again.

 

The dollar will resume its status as the world's most quality store of value when the economy associated with it regains some semblance of fiscal sanity, and when the U.S. goverrnment proffers to private business an environment that is conducive to growth.

 

IF those who lived through the Carter years are not having a deja vu moment right now, it is because they were either too stoned to notice what was happening at the time, or they already have Alzheimers.

[Trimdingman]

That is correct...and that's why a low US dollar is bad for most of Canada. Somewhere between 70 and 90% of our exports go south. A low US dollar is good if you happen to be one of the 4 provinces that rely heavily on oil and natural gas exports or the territory that rely heavily on diamond and other mineral exports. It's bad if you're one of the two central Canadian provinces (and to a lesser extent, my mixed economy province) that exports mostly manufactured goods to the US....although it's a plus for energy and minerals also for here.

 

What happens when the US dollar hyperinflates to one millionth of its value. Should the Canadian dollar follow suit? On the whole, it is good to have an honest currency. Inflating the currency, through the government printing it, steals from the savers, and rewards the frivolous spenders. I don't keep any cash. I have a substantial mortgage, because I know that the government is crooked, and I intend to profit from it. I will pay off the mortgage with de-valued dollars, and get a free house, thanks to all of the suckers who trust the government and save their money.

[suv_guy_19]

That was a waste of reading time.

[Edstock]

when the U.S. goverrnment proffers to private business an environment that is conducive to growth.

Private business? What about non-private business?

 

What would an environment that is conducive to private business growth look like?

[Mark B. Morrow]

IF those who lived through the Carter years are not having a deja vu moment right now, it is because they were either too stoned to notice what was happening at the time, or they already have Alzheimers.

 

 

You may want to check your memory of the Carter years. Carter came in after several years of high inflation (remember Nixon's Wage and Price Controls and Jerry Ford's WIN buttons?). Interest rates during the Carter administration were double digit (check out some of the car ads of the era when a loan at 10% was a selling point. Add in the 2nd Arab oil embargo and gas rationing due to the stranglehold of OPEC and you had a recipie for economic disaster. In short, NOTHING like the current economic situation in the US.

[xr7g428]

Mark, Only you could look back with fondness for the Carter years.

 

So, since you have all of the answers, how about answering a few real questions?

 

How long will it take your ream to get unemployment back to say 7%?

 

How long will it be till oil is back over $100?

[Mark B. Morrow]

Mark, Only you could look back with fondness for the Carter years.

 

So, since you have all of the answers, how about answering a few real questions?

 

How long will it take your ream to get unemployment back to say 7%?

 

How long will it be till oil is back over $100?

 

I have no particular fondness for the Carter years, having lived through them. I was just pointing out that your comparison doesn't make sense. We are where we are now because of the last 8 years of bad decision making. It isn't all the Republicans, the Dems in Congress surely contributed, but W and Republicans had control for 6 years having inherited a surplus from Clinton. They left a mess for Obama to clean up.

 

Under Republican leadership earmarks exploded, oversight of the financial markets was abandoned, the rich got really rich and the middle class got screwed. Maybe they thought it wouldn't tank until after the election. Instead it cratered under W's watch and the bailouts that the Republicans now decry were started by Bush's team.

 

Perhaps you have forgotten that we have already had $147/bbl oil while W was in charge. Unemployment is a lagging indicator. It will go down but it will take more time. I would expect unemployment to register a bit over 10% before it starts to improve. In real numbers (counting those the stats ignore) it is probably closer to 16-18%. The trend has improved in the last 6 months the number of jobs lost has decreased. Things have to get "less bad" before they move toward good.

 

I'm not satisfied with the progress of the Stimulus Package. I blame the fact that it was watered down in a futile attempt to get some Republican support for the slow results. As long as the Republicans have nothing to offer but NO! they should be ignored. Obama is going to get the credit or the blame, so he might as well just do it his way and stop trying to negotiate with McConnell, Cantor and the rest of the gang of fail.

Edited October 21, 2009 by Mark B. Morrow

[grbeck]

The dollar will resume its status as the world's most quality store of value when the economy associated with it regains some semblance of fiscal sanity, and when the U.S. goverrnment proffers to private business an environment that is conducive to growth.

 

The best thing that could happen for both the nation and President Obama is that the Republicans take control of Congress in 2010. It was no accident that Bill Clinton had his best years AFTER the Republican takeover of Congress in 1994. He and Congress played off of each other, and kept each other's worst instincts in check.

 

The years from 2001 to 2006 proved the dangers of having one party control both the executive and legislative branches of government; right now, the Democrats seem intent on reinforcing that message.

[xr7g428]

C'mon Mark, try for a straight answer. Leave all the spin out and just answer two questions:

 

When will your team get unemployment down to "just" 7%?

 

When will oil go over $100?

[Mark B. Morrow]

C'mon Mark, try for a straight answer. Leave all the spin out and just answer two questions:

 

When will your team get unemployment down to "just" 7%?

 

When will oil go over $100?

 

I don't belive I was spinning, but I'll play.

 

1. I have no knowledge of when unemployment will hit 7%. I'm not able to see into the future. Are you? If so, why didn't you forsee the crash of the economy last September? In any event, Obama inherited the mess that led to the current unemployment rate.

 

1a. Where do you think unemployment would be now under your "team"? What would you have done?

 

2. I have no idea when or if oil will go over $100. As you might agree, the price of oil is dependent on many factors that are outside the control of anyone including war, weather, world demand and market speculation. Perhaps you have some insight you can share. If you are capable of accurately predicting the price of oil on a given day your talent would make you very rich. You are wasting your time here.

[Deanh]

C'mon Mark, try for a straight answer. Leave all the spin out and just answer two questions:

 

When will your team get unemployment down to "just" 7%?

 

When will oil go over $100?

considering the BLEATING the Saudis are doing as of late, I would think $100 oil may never actually happen.....they are scared of lost revenue NOW and asking for help as demand continually declines....

[NickF1011]

In any event, Obama inherited the mess that led to the current unemployment rate.

 

When does it finally become Obama's responsibility instead of it being an "inherited" problem? It has been over 9 months now. Funny thing is, a lot of the people I see calling this "Bush's recession" also referred to the 2001 dip as "Bush's recession". It can't be both.

[Mark B. Morrow]

The best thing that could happen for both the nation and President Obama is that the Republicans take control of Congress in 2010. It was no accident that Bill Clinton had his best years AFTER the Republican takeover of Congress in 1994. He and Congress played off of each other, and kept each other's worst instincts in check.

 

The years from 2001 to 2006 proved the dangers of having one party control both the executive and legislative branches of government; right now, the Democrats seem intent on reinforcing that message.

 

 

There are some basic differences between 1994 and 2010:

 

1. Clinton was more of a centerist than Obama. He took office with a bare plurality.

 

2. There were moderate Republicans Clinton could work with in 1994. With the exception of Snowe and Collins, there won't be any in the Senate in 2010. Specter's now a Dem, Hegel's retiring and the rest like Chaffee have all been run out of the Republican Party. It isn't a coincidence that there are no Republicans left in the House from New England and most of the Northeast. The idealogical purity required by today's Republican Party has made moderates a thing of the past. Reagan's Big Tent has been dismantled and all that's left of the circus is the clowns.

 

3. The current leadership of the Republicans in office (McConnell, Cantor, Kyl...) and out (Rush, Hannity et. al.) aren't interested in bipartisan compromise to make America succeed, they just want Obama to fail. Reagan used to say that someone who agrees with you 80% of the time is still your friend. These days it has to be 100% or nothing.

 

4. The Republicans in control from 2001 to 2006 were far more in lock step than any Democratic majority will be. The Blue Dog Dems are far more independent than any Congressional Republicans are now.

[NickF1011]

There are some basic differences between 1994 and 2010:

 

1. Clinton was more of a centerist than Obama. He took office with a bare plurality.

 

2. There were moderate Republicans Clinton could work with in 1994. With the exception of Snowe and Collins, there won't be any in the Senate in 2010. Specter's now a Dem, Hegel's retiring and the rest like Chaffee have all been run out of the Republican Party. It isn't a coincidence that there are no Republicans left in the House from New England and most of the Northeast. The idealogical purity required by today's Republican Party has made moderates a thing of the past. Reagan's Big Tent has been dismantled and all that's left of the circus is the clowns.

 

3. The current leadership of the Republicans in office (McConnell, Cantor, Kyl...) and out (Rush, Hannity et. al.) aren't interested in bipartisan compromise to make America succeed, they just want Obama to fail. Reagan used to say that someone who agrees with you 80% of the time is still your friend. These days it has to be 100% or nothing.

 

4. The Republicans in control from 2001 to 2006 were far more in lock step than any Democratic majority will be. The Blue Dog Dems are far more independent than any Congressional Republicans are now.

 

Where do you think most of this staunch conservatism came from though? I think what started all of this was the bickering that went back and forth between both parties between the 2000 election and 2001 inauguration. The fringes of both parties turned into conspiracy theorists and hate mongerers.

[Mark B. Morrow]

When does it finally become Obama's responsibility instead of it being an "inherited" problem? It has been over 9 months now. Funny thing is, a lot of the people I see calling this "Bush's recession" also referred to the 2001 dip as "Bush's recession". It can't be both.

 

The current recession will always be Bush's since it began in Q4 of 07. The only question now is what is Obama goint to do in response to what he recieved on Jan 20? If things aren't improved by Nov 2010, he is likely to pay for it in the mid-term Congressional election. All the more reason for him to take ownership of the solution and stop trying in vain to get the Republicans on board. At least if he does it his way he can take credit for his success. If it doesn''t work he will be blamed whether he tried to work with the Republicans or not. They certainly aren't offering much to help.

[NickF1011]

They certainly aren't offering much to help.

 

There have been plenty of Republican ideas put forth. None of them will ever see the light of day in committee though. When you don't have the votes to even get anything put into committee, the only real choice left is to be obstructionist until your voting numbers change.

[Mark B. Morrow]

Where do you think most of this staunch conservatism came from though? I think what started all of this was the bickering that went back and forth between both parties between the 2000 election and 2001 inauguration. The fringes of both parties turned into conspiracy theorists and hate mongerers.

 

 

Some would go all the way back to Nixon '72 and the "Dirty Tricks" campaign of the Committee to Re-Elect the President (CReEP). I don't go that far since Nixon's deeds were behind the scenes. The campaigns of Carter/Ford, Reagan/Carter and Reagan/Mondale were all pretty respectable. The campaigns stayed away from purely personal attacks and the candidates treated each other as equals. The attacks got vicious with Bush/Dukakis in '88. Lee Atwater and Roger Ailes' vilification of Michael Dukakis reached a low not seen in the modern era. The attack machine ramped up to high speed with Bush/Clinton in '92 and Clinton/Dole in 96. Bush/Gore brought in a new crew that really believed that W was chosen by God to be President. The 2004 attacks on Kerry's patriotism, along with the vile 2002 Senate campaign run against Max Cleland by Karl Rove and Saxby Chambliss, reached rock bottom. How a guy like Chambliss who avoided Vietnam with a supposedly bad knee (but still plays tennis) could challenge the patriotism of Max Cleland who left both legs and an arm there and served as Veteran's Secretary, is beyond my ability to explain.

 

2008 was an improvement primarily due to McCain's refusal to do to Obama what W did to him in 2000. The campaign and the nominee have to be the leaders in setting the tone. I have no idea what we may see in 2012. I guess it will depend on who the Republican nominee ends up being.

[Mark B. Morrow]

There have been plenty of Republican ideas put forth. None of them will ever see the light of day in committee though. When you don't have the votes to even get anything put into committee, the only real choice left is to be obstructionist until your voting numbers change.

 

 

Lack of votes didn't stop the Republicans in '92-'93 from formulating a coherent plan and taking it to the public. They don't do it now because they don't have a plan that can stand up to scrutiny. Hell, Obama invited them publicly to present their ideas. They have their own network. They realize that we are in a mess they can't fix so they just prefer to snipe from the backround and blame Obama.