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dollar at 26 year low - 7/10/2007 5:01:18 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		and all time low to the Euro and the Pound.

makes me get a sinking feeling.  is it starting?? the collapse?
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RE: dollar at 26 year low - 7/10/2007 5:17:46 PM   
UtopianRanger


Posts: 3251
Status: offline 		And who would argue against the notion that *real* wealth is defined by purchasing power. But hey, no pitty.....this current deflationary cycle of the dollar is good for US exporters -- Let's throw a grand party!!!! Hurrah!!!



 - R


PS - Anyone notice with the exception of possibly Lou Dobbs, the monetary /fiscal crisis that surrounds us is never talked about on mainstream corporate news.

_____________________________

"If you are going to win any battle, you have to do one thing. You have to make the mind run the body. Never let the body tell the mind what to do... the body is never tired if the mind is not tired."

-General George S. Patton


(in reply to pahunkboy)
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RE: dollar at 26 year low - 7/10/2007 5:52:37 PM   
Faramir


Posts: 1043
Joined: 2/12/2005
Status: offline 		1) Inflation or deflation "is always and everywhere a purely monetary phenomenon."  To know whether or not we are experiencing monetary inflation or deflation, that is, a surplurs or deficit of dollars relative to the size of the pool of goods and services it is meant to denominate, one merely look at the price of a good or service that is stable in demand and supply.  Gold leaps to mind as a good proxy, as we never "lose all the gold" or suddenly find a way to extract it from sea-water: it has been in demand for thousands of years, and comes out of the soil at a fairly modest, steady rate. 

Gold prices rise or fall in inverse direction of the relative size of the money supply--gold prices falling mean deflation (dollars are relatively scarcer to the pool to be dominated)--rising gold prices mean inflation as a surplus of dollars make them less valuable (you need more of them to buy an ounce of gold).  Gold prices fell from 97 to 2000, the Goldspan Deflation that did so much damage to capital markets.  Since 2001 we have have had a steady increase in gold prices--we are back in Nixon Carter territory again, and are experiencing serious monetary inflation.  That's a really, really bad thing, as contracts made before the change in terms become more and more out of whack.  Creditors experience windfall losses, debtors windfall gains, and for the marginal producer on the wrong side of the change, it can remove them as an actor from the market.

Very, very bad--our current inflation scares me.

2) Relative prices between money is a tricky thing because it is not absolute but relative.  If our currency loses value against another curency, is it because we have experienced real inflation?  Or is it because the other currency is deflated, and we are ilfating only relative to the other currency?  Also, there is the issue of confidence in the treasury in question.  19th Britain had such sound and stable monetary policy--the value of a pound sterling was never varied--that the Exchequer could issue Perpetual Notes--bonds that never matured.  That's confidence, buying a bond where you have no worry about return of principal because you trust the income won't change in buying power....ever.

The rest of the world has grave reason to doubt the future value of the dollar.  Ever since Nixon unilateraly ended the Bretton Woods Agreement, we've been flying blind, just shitting out more or less dollars with no polaris.

So yea, I'm worried as hell right now.  I'm glad I sold my investment firm.  I don't want to be in a hotseat for the next crash.

_____________________________

True masters, true subs and slaves, X many years in the lifestyle, Old Guard this and High Protocol that--it's like a convention of D&D nerds were allowed to have sex once, and they decided to make a religion out of it.

(in reply to UtopianRanger)
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RE: dollar at 26 year low - 7/10/2007 6:17:10 PM   
dragone


Posts: 215
Joined: 5/29/2007
Status: offline 		Hello Faramir....What the Hell are you talking about?...What the Hell?
We have a great president, doing his job, protecting the US of A from all enemies, both foreign and Domestic. The Newly formed 'Africa Command' will now fight Mr. Al Qaeda, on the African Front. The pullout propsal of Iraq will be Vetoed, ...we will be protected from the Mr. Al Qaeda.

That's what matters....inflation, deflation, what the hell, are you blowing up a ballon or something.

What the hell are you talking about?

Bush is on top of all this, don't you know. And if it all goes in the toilet...Hey, man, he can't be expected to micro-manage everything.

Take a look at: www.burjdubai.com  
Oh, and if things go bad for you, you can always book a room  at Jumeirah Essex House, They are available in the world's most distinctive locations, New York, London, Dubai

If what you say is coherent; then explain why, Haliburton quit the USofA, and moved their CEO, headquarters to Dubai....okay, explain it, GO AHEAD.

(in reply to Faramir)
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RE: dollar at 26 year low - 7/10/2007 7:16:50 PM   
Lordandmaster


Posts: 10943
Joined: 6/22/2004
Status: offline 		Ummm...most of'em don't realize that you're being sarcastic, you know.  Sometimes you have to keep it simple for the folks.

quote:

ORIGINAL: UtopianRanger

And who would argue against the notion that *real* wealth is defined by purchasing power. But hey, no pitty.....this current deflationary cycle of the dollar is good for US exporters -- Let's throw a grand party!!!! Hurrah!!!

(in reply to UtopianRanger)
Profile   Post #: 5
RE: dollar at 26 year low - 7/10/2007 9:11:00 PM   
Real0ne


Posts: 21189
Joined: 10/25/2004
Status: offline
quote:

ORIGINAL: Lordandmaster

Ummm...most of'em don't realize that you're being sarcastic, you know.  Sometimes you have to keep it simple for the folks.

quote:

ORIGINAL: UtopianRanger

And who would argue against the notion that *real* wealth is defined by purchasing power. But hey, no pitty.....this current deflationary cycle of the dollar is good for US exporters -- Let's throw a grand party!!!! Hurrah!!!



i always talk with people about this on the streets that i meet...  incredibly every so often like once every 6 months i actually meet someone who has a clue on this!

How sad but you are totally on target.


_____________________________

"We the Borg" of the us imperialists....resistance is futile

Democracy; The 'People' voted on 'which' amendment?

Yesterdays tinfoil is today's reality!

"No man's life, liberty, or property is safe while the legislature is in session

(in reply to Lordandmaster)
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RE: dollar at 26 year low - 7/10/2007 9:13:21 PM   
MzMia


Posts: 5333
Joined: 7/30/2004
Status: offline
quote:

ORIGINAL: UtopianRanger

And who would argue against the notion that *real* wealth is defined by purchasing power. But hey, no pitty.....this current deflationary cycle of the dollar is good for US exporters -- Let's throw a grand party!!!! Hurrah!!!



- R


PS - Anyone notice with the exception of possibly Lou Dobbs, the monetary /fiscal crisis that surrounds us is never talked about on mainstream corporate news.


I have noticed that fact for about the last 6 years or so, question is, "How bad will it have to get
for mainstream America to wake up and smell the coffee?"

_____________________________

Namaste'
To Each His/Her Own
"DENIAL ain't just a river in Egypt." Mark Twain


What's your favorite fetish?
"My partner's whisper"--bloomswell

(in reply to UtopianRanger)
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RE: dollar at 26 year low - 7/10/2007 9:16:18 PM   
SugarMyChurro


Posts: 1912
Joined: 4/26/2007
Status: offline 		There's coffee...?

(in reply to MzMia)
Profile   Post #: 8
RE: dollar at 26 year low - 7/10/2007 9:18:42 PM   
Real0ne


Posts: 21189
Joined: 10/25/2004
Status: offline
quote:

ORIGINAL: Faramir

So yea, I'm worried as hell right now.  I'm glad I sold my investment firm.  I don't want to be in a hotseat for the next crash.


i have been pondering the timing...  anyone got a gut feeling or know what the leading indicators are to take a nice short scalp?  heh heh


_____________________________

"We the Borg" of the us imperialists....resistance is futile

Democracy; The 'People' voted on 'which' amendment?

Yesterdays tinfoil is today's reality!

"No man's life, liberty, or property is safe while the legislature is in session

(in reply to Faramir)
Profile   Post #: 9
RE: dollar at 26 year low - 7/10/2007 10:08:26 PM   
selfbnd411


Posts: 598
Joined: 7/23/2005
Status: offline 		Cheap dollars are fantastic for American exporters.  It's the same trick the Japanese used to clobber us in the 1980s, except their economy wasn't large enough to sustain it.  Ours is.

(in reply to Real0ne)
Profile   Post #: 10
RE: dollar at 26 year low - 7/10/2007 10:14:36 PM   
Lordandmaster


Posts: 10943
Joined: 6/22/2004
Status: offline 		I had to smile just now when I read this little article by Paul Krugman--dated January 4, 2001:

http://www.cesifo-group.de/portal/page/portal/ifoHome/e-pr/e3echo/40echoint/_echoint?item_link=echo-NYT01-04-01.htm

It was a different world back then.

(in reply to pahunkboy)
Profile   Post #: 11
RE: dollar at 26 year low - 7/11/2007 12:27:32 AM   
meatcleaver


Posts: 9030
Joined: 3/13/2006
Status: offline
quote:

ORIGINAL: pahunkboy

and all time low to the Euro and the Pound.



Yep. There are shopping excursions to New York from London. My sister can't believe her luck. She'll go anywhere for a bargain, even if it costs her an arm and a leg to get there. ssseeesh.

_____________________________

There are fascists who consider themselves humanitarians, like cannibals on a health kick, eating only vegetarians.

(in reply to pahunkboy)
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RE: dollar at 26 year low - 7/11/2007 2:15:46 AM   
UtopianRanger


Posts: 3251
Status: offline
quote:

Ummm...most of'em don't realize that you're being sarcastic, you know.  Sometimes you have to keep it simple for the folks.


Yeah.....I usually pin-up homie with the glasses on the end - But I was in a hurry.

quote:

Gold prices rise or fall in inverse direction of the relative size of the money supply--gold prices falling mean deflation (dollars are relatively scarcer to the pool to be dominated)--rising gold prices mean inflation as a surplus of dollars make them less valuable (you need more of them to buy an ounce of gold).  Gold prices fell from 97 to 2000, the Goldspan Deflation that did so much damage to capital markets.

Gold prices rise or fall in inverse direction of the relative size of the money supply--gold prices falling mean deflation (dollars are relatively scarcer to the pool to be dominated)--rising gold prices mean inflation as a surplus of dollars make them less valuable (you need more of them to buy an ounce of gold).  Gold prices fell from 97 to 2000, the Goldspan Deflation that did so much damage to capital markets.  Since 2001 we have have had a steady increase in gold prices--we are back in Nixon Carter territory again, and are experiencing serious monetary inflation.  That's a really, really bad thing, as contracts made before the change in terms become more and more out of whack.  Creditors experience windfall losses, debtors windfall gains, and for the marginal producer on the wrong side of the change, it can remove them as an actor from the market.



Most definitely a very serious commodity inflation. Lead, gold, copper, tin, aluminun and oil have all seen double digit increases. Some would say peak lead, peak copper, peak gold, etc., but I would agree with you Faramir...... it looks to me like just a decline of paper money in general -- and the dollar in paticular.

quote:


Very, very bad--our current inflation scares me.
 
Yes….it scares me too. But the two things that equally scare me:  

A fed chairman with a nick like ‘’Helicopter Ben’’, who believes in flooding the system with liquidity in inflationary times such as these.  

{For those unaware} He received this nick after he gave a speech in which case a theoretical problem of a world-wide depression was posed. He was asked what he would do to help curb /end the depression. His answer was to print an inordinate amount of dollars, load them up in helicopters and drop them on people’s lawns… that way they’ll take the cash, go out and buy things and re-inflate the economy.   

But the thing that scares me even more is the possibility of the fall of the dollar as a reserve currency.  

I think if we look back at the most recent example {of the fall of a reserve currency} between 1914 and 1945, when the British pound was dethroned by the US dollar, we see that period as a time when we experienced two world wars, a world economic depression, fascism, communism and a whole other series of social dislocation.  

But hey...I’m not trying to take on the role of The Ferrymen….. I’m just hella cynical when it comes to this economic crisis and those in a leadership role to manage/correct it.





- R

< Message edited by UtopianRanger -- 7/11/2007 2:55:41 AM >

_____________________________

"If you are going to win any battle, you have to do one thing. You have to make the mind run the body. Never let the body tell the mind what to do... the body is never tired if the mind is not tired."

-General George S. Patton


(in reply to Faramir)
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RE: dollar at 26 year low - 7/11/2007 4:21:17 AM   
Faramir


Posts: 1043
Joined: 2/12/2005
Status: offline
quote:

ORIGINAL: UtopianRanger
A fed chairman with a nick like ‘’Helicopter Ben’’, who believes in flooding the system with liquidity in inflationary times such as these.  

{For those unaware} He received this nick after he gave a speech in which case a theoretical problem of a world-wide depression was posed. He was asked what he would do to help curb /end the depression. His answer was to print an inordinate amount of dollars, load them up in helicopters and drop them on people’s lawns… that way they’ll take the cash, go out and buy things and re-inflate the economy.   


1) I would say rather, that flooding the system with luiquidity is inflation.

2) Oh. My.  Fucking.  God.  Bernanke said he would print funny money to increase demand?  It's like having Nixon rise from the grave and make everyone "Keynesians now!!!"  That is scary.

You'd think, from an axiomatic approach, we'd have someone look at big, broad, good periods of economic success and stability, like the US under BW or say, Britain's 19th century monetary stability and go, "Wow, what, umm, what did they do?  Maybe we could do it to?"  Similarly look at say, oh, I dunno, the US under Nixon and Carter and be like, "Ok, whatever the fuck they did, I ain't doing it."

_____________________________

True masters, true subs and slaves, X many years in the lifestyle, Old Guard this and High Protocol that--it's like a convention of D&D nerds were allowed to have sex once, and they decided to make a religion out of it.

(in reply to UtopianRanger)
Profile   Post #: 14
RE: dollar at 26 year low - 7/11/2007 5:09:53 AM   
Real0ne


Posts: 21189
Joined: 10/25/2004
Status: offline
quote:

ORIGINAL: Faramir

quote:

ORIGINAL: UtopianRanger
A fed chairman with a nick like ‘’Helicopter Ben’’, who believes in flooding the system with liquidity in inflationary times such as these.  

{For those unaware} He received this nick after he gave a speech in which case a theoretical problem of a world-wide depression was posed. He was asked what he would do to help curb /end the depression. His answer was to print an inordinate amount of dollars, load them up in helicopters and drop them on people’s lawns… that way they’ll take the cash, go out and buy things and re-inflate the economy.   


1) I would say rather, that flooding the system with luiquidity is inflation.

2) Oh. My.  Fucking.  God.  Bernanke said he would print funny money to increase demand?  It's like having Nixon rise from the grave and make everyone "Keynesians now!!!"  That is scary.

You'd think, from an axiomatic approach, we'd have someone look at big, broad, good periods of economic success and stability, like the US under BW or say, Britain's 19th century monetary stability and go, "Wow, what, umm, what did they do?  Maybe we could do it to?"  Similarly look at say, oh, I dunno, the US under Nixon and Carter and be like, "Ok, whatever the fuck they did, I ain't doing it."


so whats you guys take on HR 2755?


_____________________________

"We the Borg" of the us imperialists....resistance is futile

Democracy; The 'People' voted on 'which' amendment?

Yesterdays tinfoil is today's reality!

"No man's life, liberty, or property is safe while the legislature is in session

(in reply to Faramir)
Profile   Post #: 15
RE: dollar at 26 year low - 7/11/2007 5:22:13 AM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		Lou Dobbs was in fact my source for this.

Werent conservatives supposed to want a balanced budget?  Gee Bill Clinton looks sorta conservative at the moment!!!

(in reply to Real0ne)
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RE: dollar at 26 year low - 7/11/2007 5:26:09 AM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline
quote:

ORIGINAL: Real0ne

quote:


so whats you guys take on HR 2755?



ok- to abolish the federal reserve, you know that is a sinister group to begin with - essentially secret rich bankers. --i see nothing that returns us to the gold standard.

the wealthy 1% owe no allegience to any flag or country. they would collapse the dollar if the end result is profit.

you dont have to be einstien to know Iraq costs us more then what is in the till!!!

(in reply to Real0ne)
Profile   Post #: 17
RE: dollar at 26 year low - 7/11/2007 6:09:26 AM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		All this talk about a weak USD being good for exporters is poppycock. You have to realize they are deflated in value.

I don't plan on breaking the ten paragraph limit here so this is going to be short and sweet.

Did you ever have a house increase in value ? I mean on it's own, with no changes to the neighborhood, the city or the property itself. I mean when to bought it a long time ago for $30,000 and now it's worth $110,000.

How much has it increased in value ? Answer : NOTHING. ABSOLUTELY NOTHING.

Many here probably get it, but for others, the house and property are worth exactly the same amount, it is the $110,000 that is now only worth $30,000.

Remember the saying another day another dollar ? Well the last time we had any real dollars was in 1913, and what we are using today as a dollar is worth about a nickel. That means to make a dollar a day you need to make 200 FRNs a day.

I saw an ad in the AFP for precious metals, coins actually and they said like a new car would cost this many gold dollars way back. With as much as new cars cost now, the same amount of gold dollars could be used to purchase a new car. Of course you would sell them to get the money, or FRNs that is, but it could be done.

When you use a fiat currency, these things happen. I tell my Parents, get rid of that money, all it does is go down in value. Buy tools, property, anything that lasts. Money is by far the worst thing to have, unless we start talking really stupid shit like beanie babies or something, and even with them it is probably a tossup.

What they call inflation is really deflation of the dollar. If I bought a house in 1989 for example for $20,000 and could sell it today for $100,000 that would profit me nothing, because if that house is now worth $100,000, that is what an equivalent house would cost today. So even a long term real estate investment is worth shit. But then if you are collecting rent(s) that changes the deal, however then you provide services so this is not quite a hands off operation.

My Uncle leased a truck and it didn't depreciate as fast as they thought it would, but the contract said he only gets so much on trade, but another dealer would give him more. So he put it on his credit card and made like three grand.

Basically short term trends are the way to make money. If you buy a house and it quintuples in value in 20 years you are not doing so well. If it quintuples in value in 5 years, you are doing fine. But the natural trend we are following down the toilet is not what caused that. Zoning changes, local improvements and things like that, things that affect the desirability of that property is where you make your money.

If I were out to buy a house right now I would want the worst house on the street. In fact when it comes to such things I always want to buy something that is fucked up. That gives me the opportunity to increase it's intrinsic value, and if I spend less than that increase doing it, I win. And always remember, if you break even you lose.

T

(in reply to pahunkboy)
Profile   Post #: 18
RE: dollar at 26 year low - 7/11/2007 6:23:09 AM   
Faramir


Posts: 1043
Joined: 2/12/2005
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quote:

ORIGINAL: Termyn8or
What they call inflation is really deflation of the dollar.


Devaluation of the dollar, not deflation.  Deflation would be the opposite--a scarcity of dollars (relative to the supply of goods and services to be denominated).

But yes, you are right, fiat currencies lend themselves to changes in the unit of account, and that is a bad thing.

_____________________________

True masters, true subs and slaves, X many years in the lifestyle, Old Guard this and High Protocol that--it's like a convention of D&D nerds were allowed to have sex once, and they decided to make a religion out of it.

(in reply to Termyn8or)
Profile   Post #: 19
RE: dollar at 26 year low - 7/11/2007 6:41:53 AM   
Faramir


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Joined: 2/12/2005
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quote:

ORIGINAL: Real0ne
so whats you guys take on HR 2755?


1) Zero chance of passing.  I mean, it's a protest bill, not seriously meant as a legislative proposal, right?

2) I'm not so much down on the Fed as I am on the mission of the Fed.  This chaps my ass:

quote:

  The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.


If the mission of the Fed were solely price stability, I'd have no problemw ith it--it would be like the Office of the Exchequer during Britain's long price stability run.  Let's say right now gold is about $650 an ounce (another way of saying dollars are at 1/650th an ounce), and we decide that's our price point, just like England had a pound sterling.  If the Fed intervened $10 either way, after a couple years we'd be locked in.

Or we could redo a Bretton Woods type arrangement.  Anything to move away from a fiat currency to a linking of the dollar as a unit of account to the actual pool of goods and services to denominated.

Shit, even the Volker/Early "Good" Greenspan method would work.  I rpefer gold to a basket of prices, but fuck, at least that is aimed away from managing production and towards price stability.

It really, really chaps my ass that this president has hit a home-run with tax policy and completely fucked up monetary policy.

_____________________________

True masters, true subs and slaves, X many years in the lifestyle, Old Guard this and High Protocol that--it's like a convention of D&D nerds were allowed to have sex once, and they decided to make a religion out of it.

(in reply to Real0ne)
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