Independent:- Weak dollar bleak for world economy

[jannyk]

The Dems can't fix this - we are too screwn. The Chinese fucking own our country - what happens when we default?

<< Transatlantic travellers hoping to cash in on a $2 pound for the first time in 14 years should enjoy the good times while they last, because a tumbling dollar could start an economic whirlwind. >>

snip..

<< But the fact is that the sharp rise in the pound - up 14 per cent against the dollar this year - is not a vote of approval for the UK economy but a damning verdict on the outlook of the world's largest economy by experts in the financial markets >>

snip...

<< Experts have been warning that the US and the dollar have been living on borrowed time. Non-stop spending by US households has delivered a record trade and current account deficits. The dollar has held up because overseas investors, especially the Chinese and other Asians governments are keen to buy dollar assets. But recent comments by the Chinese central bank about the need to move into other currencies helped trigger the start of the dollar's recent slump a week ago. Private investors have also be keen to buy into US Inc but the prospect of further falls in the dollar could encourage them to cash in their chips now, pushing the dollar down further and creating a vicious cycle.

In its most recent forecast the International Monetary Fund (IMF) warned that if that happened there would be a "disorderly unwinding" that would see a rapid fall in the dollar, volatile movements in the financial markets and a "significant hit" to the world economy. A weak dollar would put up the prices of imports, discouraging Americans from spending. It would ALSO drive up inflation and force the US Federal Reserve to raise interest rates. That could transform its stagnant housing market into a financial disaster zone. A consumer-led recession would hit those countries that have done well by selling to Americans.

snip

<< The IMF yesterday declined to comment further. However after five years of issuing warnings over the dollar and the global imbalances, the IMF is taking action. It has launched multilateral talks to allow big players such as the US and China to talk frankly in private about the possible ways to reduce these imbalances without triggering the market reaction they dread. >>

There's more here:
http://news.independent.co.uk/business/news/article2032660.ece

[StClone]

1. A tax cut won't fix this.

Nominated.

[xchrom]

2. a tax cut helped bring this on.

and here's what osama and al zwahiri{?} know that supposedly those in washington don't -- we can't afford a protracted war.

the billions and trillions this causes before, during, and after the conflict is a huge drag on a country as indebted as we are.

we can't afford ''stay the course'' -- we never could.

[ClintonTyree]

3. I expect the Bush administration to act upon this in their usual way.

Lying. They'll continue to lie about the deficit, the trade imbalance, unemployment, inflation etc. They'll make everything look good on paper and our lap-dog press will tout the "Bush economic miracle" but the actual effects of this serial lying won't be truly exposed until Bush is out of office. Then it becomes someone else's problem and the RepubliCONS will blame Democrats for the critical monetary situation. Everything was fine when they left...... :eyes: On paper, anyway. This has been going on since Bush first stole the Presidency and he only has to make it 2 more years before he can pass the torch (extinguished, of course) to the Democrats.
It's been the modus operandi of RepubliCONS for decades.

[acmejack]

6. I don't think they have enough collective fingers between them

To plug all the leaks the financial dike is springing. We are in a very serious dilemma, which all too many choose to ignore. Or then again, perhaps I am but an old serial alarmist. I hope for everybody's sake it is the latter, people often tell me, especially here, that I am a CT, so probably that is the case and there is nothing at all to worry about.

But on the off chance that disaster is looming and the Bill is coming due for the foolish policies of the idiots who have been manipulating our monetary policy since Saint Reagan-read Greenspan and his massive wealth transferring fraud, then the dollar is descending straight down to the garbage heap! I think this will happen fast and it will be quite bad, just watch how quickly they adjust the price of a barrel of oil upward to compensate for the loss of purchasing power! You honestly think out "Friends", the Saudis, are going to lose money on their product while the dollar plummets? Please!

Happy New Year! I suggest you get very drunk. Chances are you won't be able to afford to do anything but stay at home next year. Chances are many of us will be lucky to have a home next year.

[jannyk]

11. What the hell is a 'CT'?

Because I think I'm one too.

And I agree with you, I think this is going to get very, very nasty. We already had enough internal $$ problems with house prices falling, rates rising and many people triple mortgaged up to their woo woo.

And I don't see what can be done to get out of this downward spiral - not in the near future anyhow.

:crazy:

[acmejack]

12. A conspiracy theorist

[rucky]

8. Yep. They mess it up, we clean it up (and get blamed). n/t

[Skink]

13. Skink could't have said it better.

[ClintonTyree]

16. So YOU'RE the one!

I wanted that screen name 2 years ago when DU had the screen name amnesty after Bush stole a second term. It was already taken, BY YOU, so I had to "settle" for The Governor's "real" name. ;) I was "DumpGump" before I changed. I figured there was no way to dump him after his second coronation (still hoping for impeachment though) so I wanted to change my name to my favorite fictional character. You had "Skink" wrapped up though. :banghead: Oh well. :shrug:

I'm about 3/4 of the way through "Nature Girl" right now. I was hoping The Governor would make an appearance in this book but it doesn't look like it. I hope Hiaasen hasn't let him die off or anything. :cry:

[fasttense]

4. Several well known economists (like John Williams) have been warning abut this

for the last six months. It is only going to get worse and stagflation will follow.

[Demeter]

5. Well, Several Michgain Residents Have Worried for Past 6 Years

What took the economists so long?

[Lone_Star_Dem]

10. Stagflation is the next step as I see it

Economic growth was too dependent on an inflated housing market which is now beginning to fail. Inflation on everyday items has been consistent for the past several years and has been compounded by the price of fuel.

I honestly don't see a way around it, but luckily I'm not an economist and could well be mistaken.

[Danascot]

15. Krugman Chimed in Recently

How serious a slump is the bond market predicting? Pretty serious. Right now, statistical models based on the historical correlation between interest rates and recessions give roughly even odds that we’re about to experience a formal recession. And since even a slowdown that doesn’t formally qualify as a recession can lead to a sharp rise in unemployment, the odds are very good — maybe 2 to 1 — that 2007 will be a very tough year.

Luckily, we’ve got good leadership for the coming economic storm: the White House is occupied by a man who’s ideologically flexible, listens to a wide variety of views, and understands that policy has to be based on careful analysis, not gut instincts. Oh, wait.

http://wealthyfrenchman.blogspot.com/

[Joanne98]

7. Shop till you drop

[belab13]

9. Watch the worlds former reserve currency drop real time here

http://www.netdania.com/QuoteList.asp

and get yourself some real money for heavens sakes i.e. gold and silver.

[KAT119]

14. That's a great real-time site, belab13, it's heads up time!!

Best Gold & other precious metals site is:www.kitco.com, with latest info (scroll thru entire page) on economic destruction of US by *co.

One article'Will China start the stampede to dump US dollars.' No one wants to hold devalued $$.

Another scary possibility is the fromation of the North American Union and the new currency the "Amero". See:www.prisonplanet.com/articles/december2006/011206dollarfall.htm