US dollar gaining strength at an astonishing rate

[Xavier434]

Originally posted by: bamacre

Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

Tell that to someone who lives in Zimbabwe.

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper.

Start stocking up on your gold and let us know how it works out for you 10 years from now.

 

[LegendKiller]

Originally posted by: bamacre

Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

Tell that to someone who lives in Zimbabwe.

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper.

Yeah, the Zimbabwians are starting their own gold market there. Why don't you go there and see how it's working out.

Unless you missed it, gold only acts as an arbitrary medium of transacting, Zimbabwe has effectively broken down to a barter system, eliminating any medium. in that case gold is worthless.

If you want something just as arbitrary, why not base the currency off of buffalo chips?

 

[bamacre]

Originally posted by: LegendKiller

Originally posted by: bamacre

Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

Tell that to someone who lives in Zimbabwe.

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper.

Yeah, the Zimbabwians are starting their own gold market there. Why don't you go there and see how it's working out.

Unless you missed it, gold only acts as an arbitrary medium of transacting, Zimbabwe has effectively broken down to a barter system, eliminating any medium. in that case gold is worthless.

If you want something just as arbitrary, why not base the currency off of buffalo chips?

Yeah, just ignore how they got to this point.

Look, my analogy to the Zimbob's was a bit of a joke, but there was a point I was making.

 

[LegendKiller]

Originally posted by: bamacre

Originally posted by: LegendKiller

Originally posted by: bamacre

Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

Tell that to someone who lives in Zimbabwe.

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper.

Yeah, the Zimbabwians are starting their own gold market there. Why don't you go there and see how it's working out.

Unless you missed it, gold only acts as an arbitrary medium of transacting, Zimbabwe has effectively broken down to a barter system, eliminating any medium. in that case gold is worthless.

If you want something just as arbitrary, why not base the currency off of buffalo chips?

Yeah, just ignore how they got to this point.

Look, my analogy to the Zimbob's was a bit of a joke, but there was a point I was making.

How did they get to this point?

Hmmm....


1. Completely agrarian economy with little/no natural resources.

2. Destruction of the economy and country through dictatorial means.

Lets see, both of those can happen under a gold regime, so you fail there.


3. Printing of money to meet obligations without actually purchasing assets, investing funds into improvement of economy/government/country/infrastructure (ie, doing *REAL* stuff with it).

4. Printing of money without any investment from outside investors.


These are the keys people often forget. Inflation is partly the increase of the supply in money *WITHOUT* the increase of investment creating the money OR an increase in the demand of that money (ie, investors going into the currency *AND* people needing the currency to transact).

 

[Chadder007]

I think its a great time to put money into the market right now too....everything is priced low and in another 2 years everything will most likely be ok again and the values will rise.

 

[StageLeft]

Devaluing currency also eliminates debt.

----

LK are you saying the difference between Zimbabwe and other hyperinflationary economies and inflation in, say, potential US scenario is that these places literally do just run the printing presses whereas any money that the US government spends is inexorably tied to debt in the form of treasury notes or other, so that if they start printing money like crazy they only do it by also directly indebting themselves, likely via investors who know that the money is devaluing and thus will require substantial returns to hedge against its devaluation? And so in theory as long as this tie remains, the idea that a bigmac could cost $2k in a couple of years is quite simply impossible?

 

[WHAMPOM]

Originally posted by: Skoorb
Link

The 15-nation euro dipped as low as $1.2736 in morning trading before rising slightly to $1.2873, down from $1.3003 late Tuesday in New York.

Remember it was 1.58 a few months ago.

and

the British pound bought $1.6326 Wednesday compared with $1.6560 Tuesday, its lowest mark against the dollar since September 2003

Also, it wasn't long ago that $1 USD bought $.92 CAN, which was its weakest. Now $1USD buys $1.25 CAN, its strongest in a long time. I still have some student loans I had decided I sure as hell wasn't going to pay off on that negative exchange, feeling it was going to rebound. It clearly has, and by quite a bit!

Is this the dollar strenghtening or foreign currencies tanking due to worldwide bank failures?

 

[imported_Imp]

Should have bought some. Canadian dollar is now below US$0.80. I'd have made about 20% if I bought some a month back. Maybe it's not too late...

 

[bamacre]

LegendKiller, you said back in early 2007...

The dollar is not backed by Congress or the President. It is backed by the entire military, economy, and people of the US. It is backed by the faith in the system where those three are the only participants.

To be fair, I should first ask, do you still stand by that statement?

If "no," then do you mind updating the statement as to what you currently believe?

If the answer is in fact, "yes," then what happens when our military is in shambles, our economy is in the same boat, and the people of the US live unproductively and inefficiently? Not saying that this is the case now, but hypothetically speaking of course.

 

[SSSnail]

This is all planned, the US purposely devalue its currency so when the fire sale happens, it can buy a lot for less (when the value of USD is raised at the opportune time). Call it highway robbery and nobody can do anything about it. It has happened.

 

[LegendKiller]

Originally posted by: bamacre
LegendKiller, you said back in early 2007...

The dollar is not backed by Congress or the President. It is backed by the entire military, economy, and people of the US. It is backed by the faith in the system where those three are the only participants.

To be fair, I should first ask, do you still stand by that statement?

If "no," then do you mind updating the statement as to what you currently believe?

If the answer is in fact, "yes," then what happens when our military is in shambles, our economy is in the same boat, and the people of the US live unproductively and inefficiently? Not saying that this is the case now, but hypothetically speaking of course.

Yes, in the context that you remove the President and Congress, the dollar has it's strength because the full faith in the American people, economy, and military.

You're assuming quite a bit, but if that regression were to happen, then you would see the dollar decline against major currencies, but only to the extent that those currencies aren't facing the same problem. If you are talking about internal worth, provided people still believe that the medium holds relative value of goods, then the medium is still valid, regardless of what the medium is.

do you think those scenarios have happened?

 

[soccerballtux]

Originally posted by: Xavier434
This sort of thing sounds great from the outside looking in, but isn't this greatly attributed to deflation which if left unchecked and uncontrolled could become very dangerous for us economically? I do not claim to be an expert in this area and I am not trying to suggest that we currently do not have control over it. I just know that something similar happened that led us into the Great Depression, and I cannot say that it doesn't worry me considering how rapidly our econ has been fluctuating. It feels like anything but stability.


Deflation Wiki

Yeah the control thing interests me as well. It seems the Fed is a bit overwhelmed as of late-- there's SO much liquidity and big dollars at play, they can't seem to stop this deflation. I do not know.

It is not going to hurt us much, since so little manufacturing is done over here anymore. It is going to bolster earnings of importers-- the US company that buys from the chinafacturer.

I'm a little confused, however. We have rampant deflation in relation to world currencies, yet the cost of other goods and services (my education for example) is showing no signs of slowing down.

 

[JS80]

Originally posted by: soccerballtux

Originally posted by: Xavier434
This sort of thing sounds great from the outside looking in, but isn't this greatly attributed to deflation which if left unchecked and uncontrolled could become very dangerous for us economically? I do not claim to be an expert in this area and I am not trying to suggest that we currently do not have control over it. I just know that something similar happened that led us into the Great Depression, and I cannot say that it doesn't worry me considering how rapidly our econ has been fluctuating. It feels like anything but stability.


Deflation Wiki

Yeah the control thing interests me as well. It seems the Fed is a bit overwhelmed as of late-- there's SO much liquidity and big dollars at play, they can't seem to stop this deflation. I do not know.

It is not going to hurt us much, since so little manufacturing is done over here anymore. It is going to bolster earnings of importers-- the US company that buys from the chinafacturer.

I'm a little confused, however. We have rampant deflation in relation to world currencies, yet the cost of other goods and services (my education for example) is showing no signs of slowing down.

Examples of rampant deflation in the US?

 

[halik]

Originally posted by: LegendKiller

Originally posted by: bamacre

Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

Tell that to someone who lives in Zimbabwe.

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper.

Yeah, the Zimbabwians are starting their own gold market there. Why don't you go there and see how it's working out.

Unless you missed it, gold only acts as an arbitrary medium of transacting, Zimbabwe has effectively broken down to a barter system, eliminating any medium. in that case gold is worthless.

If you want something just as arbitrary, why not base the currency off of buffalo chips?

I vote for Truffles - relatively rare, not easy to add supply and worse comes comes to worse you can eat it. Same characteristics as gold AND it's eatable!

 

[halik]

Originally posted by: LegendKiller

Originally posted by: bamacre

Originally posted by: LegendKiller

Originally posted by: bamacre

Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

Tell that to someone who lives in Zimbabwe.

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper.

Yeah, the Zimbabwians are starting their own gold market there. Why don't you go there and see how it's working out.

Unless you missed it, gold only acts as an arbitrary medium of transacting, Zimbabwe has effectively broken down to a barter system, eliminating any medium. in that case gold is worthless.

If you want something just as arbitrary, why not base the currency off of buffalo chips?

Yeah, just ignore how they got to this point.

Look, my analogy to the Zimbob's was a bit of a joke, but there was a point I was making.

How did they get to this point?

Hmmm....


1. Completely agrarian economy with little/no natural resources.

2. Destruction of the economy and country through dictatorial means.

Lets see, both of those can happen under a gold regime, so you fail there.


3. Printing of money to meet obligations without actually purchasing assets, investing funds into improvement of economy/government/country/infrastructure (ie, doing *REAL* stuff with it).

4. Printing of money without any investment from outside investors.


These are the keys people often forget. Inflation is partly the increase of the supply in money *WITHOUT* the increase of investment creating the money OR an increase in the demand of that money (ie, investors going into the currency *AND* people needing the currency to transact).

Bolded for truth. Ron Paul blogs don't teach basic macro.

You also forgot that that deficit spending can also happen under the gold regime; just ask Nixon.

 

[bamacre]

Originally posted by: LegendKiller
do you think those scenarios have happened?

Not significantly enough, not yet at least.

One could say that our military is in shambles, but that isn't exactly correct. Especially compared to other militaries, and especially in the sense that we're, in a sense, still wearing gloves. Nuclear weapons add an interesting variable to the equation. In the end it is better to have them, and we have more than anyone.

As for the economy, and you disagree here, and that's fine, it could go either way. In the short run, everyone, globally, is of course in trouble. The long run, this is where the debate is. Whether or not we will come out ahead of everyone else.

And as for the people? I think this is potentially our biggest problem.

 

[LegendKiller]

Originally posted by: bamacre

Originally posted by: LegendKiller
do you think those scenarios have happened?

Not significantly enough, not yet at least.

One could say that our military is in shambles, but that isn't exactly correct. Especially compared to other militaries, and especially in the sense that we're, in a sense, still wearing gloves. Nuclear weapons add an interesting variable to the equation. In the end it is better to have them, and we have more than anyone.

As for the economy, and you disagree here, and that's fine, it could go either way. In the short run, everyone, globally, is of course in trouble. The long run, this is where the debate is. Whether or not we will come out ahead of everyone else.

And as for the people? I think this is potentially our biggest problem.

Our military isn't even close to being "in shambles". Sure, we dont have the ability to go into Iraq and kick ass and take names at will, but that isn't because the military is "in shambles", it's because our military was deployed, supported, and maintained incorrectly for that type of warfare.

There isn't one country on the face of the planet that can even get close to deploying a combined arms force like the US. The mere fact that we have over 10 supercarriers, while any other country has only 3/4 of *ONE* of ours, and all of them are the highest-tech and most superior on the planet, lets you know that despite the challenges in Iraq, we are still far above anybody.

As far as the economy, the fundamentals *ARE* strong. We still have the strongest education system, overall, in the world. We still produce the most high-tech ideas. We still innovate better than any other country overall. We still have the largest amount of IP of any country. We still have the most wealthy people. And, we are still more or less the most efficient working force on the planet. That ain't going away overnight, or even in a decade.

Sure, we have a lot of debt, but we also generate 14TR of "stuff" per year.

 

[bamacre]

Originally posted by: LegendKiller
Our military isn't even close to being "in shambles". Sure, we dont have the ability to go into Iraq and kick ass and take names at will, but that isn't because the military is "in shambles", it's because our military was deployed, supported, and maintained incorrectly for that type of warfare.

There isn't one country on the face of the planet that can even get close to deploying a combined arms force like the US. The mere fact that we have over 10 supercarriers, while any other country has only 3/4 of *ONE* of ours, and all of them are the highest-tech and most superior on the planet, lets you know that despite the challenges in Iraq, we are still far above anybody.

Well, I agree, that's what I was saying, and this is what I meant by us "wearing gloves." If we wanted to wipe Iraq off the map, we could. Easily.

Sure, we have a lot of debt, but we also generate 14TR of "stuff" per year.

Yeah, but that depends on what your definition of "stuff" is.

And like you have said elsewhere, our recent growth in GDP is basically an illusion. Remember debunking this load of shit?

The problem I see with the "fundamentals are strong" statement is that, while it may be true, the question is, are they strong enough? Strong enough to overpower an out-of-control Congress? Our mismanaged and expensive foreign policy? Coming increases in entitlement spending? And not only our government's debt, but individual debt, too?

 

[miketheidiot]

saying the us military is in shambles is like saying that my car is totaled because it needs an oil change and a new filter.

 

[mshan]

Dollar Strength and the Yen - Euro Cross: http://www.cnbc.com/id/15840232?video=900139502&play=1

 

[senseamp]

The fed is printing dollars like it's going out of style.
The irony is that the more there is short term flight to the "safety" of the dollar, the more money fed needs to print to get people to start lending and spending money again, and the more money supply will be flooding the system and creating inflation when this money finally starts chasing returns. So this short term dollar strength is destructive to its long term outlook, IMO. Americans consume more than we produce, and the only way to sustain that is for the currency to weaken so our products become more attractive, while our imported consumption becomes more expensive, putting the two into balance.

 

[MadRat]

Is the dollar gaining out of spite, or is it simply because the main currencies are losing their own steam that fast?

 

[Craig234]

Originally posted by: bamacre
Nuclear weapons add an interesting variable to the equation.

Thank you, Dr. Stangelove.

In the end it is better to have them, and we have more than anyone.

You think maybe others feel the same way, and have the same right as us to get them?

We really don't have a sensible global policy on nuclear weapons beyond "we're in charge now, and you aren't getting any, signed, Masters of the Universe."

The one more intellecutally consistent position, everyone getting rid of them including us, we take off the table out of an unwillingness to avoid 'absolute power corrupts absolutely'.

 

[Farang]

I hope this continues I want to go to grad school in Europe but the exchange rate was killing me

 

[bamacre]

Originally posted by: Craig234
Thank you, Dr. Stangelove.

You think maybe others feel the same way, and have the same right as us to get them?

We really don't have a sensible global policy on nuclear weapons beyond "we're in charge now, and you aren't getting any, signed, Masters of the Universe."

You are preaching to the choir, Craig. One of my beefs with Obama.