Sinking Currency, Sinking Country - Mercedes-Benz Forum

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post #1 of 132 (permalink) Old 11-05-2007, 12:59 AM Thread Starter
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Sinking Currency, Sinking Country

Sinking Currency, Sinking Country
Pat Buchanan
Fri Nov 2, 3:00 AM ET



The euro, worth 83 cents in the early George W. Bush years, is at $1.45.

The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.

Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.

Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?

Nope. The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. Indeed, Bush is presiding over a worldwide abandonment of the American dollar.

Is it all Bush's fault? Nope.

The dollar is plunging because America has been living beyond her means, borrowing $2 billion a day from foreign nations to maintain her standard of living and to sustain the American Imperium.

The prime suspect in the death of the dollar is the massive trade deficits America has run up, some $5 trillion in total since the passage of NAFTA and the creation of the World Trade Organization in 1994.

In 2006, that U.S. trade deficit hit $764 billion. The current account deficit, which includes the trade deficit, plus the net outflow of interest, dividends, capital gains and foreign aid, hit $857 billion, 6.5 percent of GDP. As some of us have been writing for years, such deficits are unsustainable and must lead to a decline of the dollar.

A sinking dollar means a poorer nation, and a sinking currency has historically been the mark of a sinking country. And a superpower with a sinking currency is a contradiction in terms.

What does this mean for America and Americans?

As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they will demand more dollars for those goods. This will mean rising prices for the imports on which America has become more dependent than we have been since before the Civil War.

U.S. tourists traveling to the countries whence their ancestors came will find that the money they saved up does not go as far as they thought.

U.S. soldiers stationed overseas will find the cost of rent, gasoline, food, clothing and dining out takes larger and larger bites out of their paychecks. The people those U.S. soldiers defend will be demanding more and more of their money.

U.S. diplomats stationed overseas, students and businessmen are already facing tougher times.

U.S. foreign aid does not go as far as it did. And there is an element of comedy in seeing the United States going to Beijing to borrow dollars, thus putting our children deeper in debt, to send still more foreign aid to African despots who routinely vote the Chinese line at the United Nations.

The Chinese, whose currency is tied to the dollar, and Japan will continue, as long as they can, to keep their currencies low against the dollar. For the Asians think long term, and their goals are strategic.

China — growing at 10 percent a year for two decades and now growing at close to 12 percent — is willing to take losses in the value of the dollars it holds to keep the U.S. technology, factories and jobs pouring in, as their exports capture America's markets from U.S. producers.

The Japanese will take some loss in the value of their dollar hoard to take down Chrysler, Ford and GM, and capture the U.S. auto market as they captured our TV, camera and computer chip markets.

Asians understand that what is important is not who consumes the apples, but who owns the orchard.

Other nations that have kept cash reserves in U.S. Treasury bonds and T-bills are watching the value of these assets sink. Not fools, they will begin, as many already have, to divest and diversify, taking in fewer dollars and more euros and yen. As more nations abandon the dollar, its decline will continue.

The oil-producing and exporting nations, with trade surpluses, like China, have also begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in the United States — investment banks and American companies.

Nor is there any end in sight to the sinking of the dollar. For, as foreigners demand more dollars for the oil and goods they sell us, the trade deficit will not fall. And as the U.S. government prints more and more dollars to cover the budget deficits that stretch out — with the coming retirement of the baby boomers — all the way to the horizon, the value of the dollar will fall. And as Ben Bernanke at the Fed tries to keep interest rates low, to keep the U.S. economy from sputtering out in the credit crunch, the value of the dollar will fall.

The chickens of free trade are coming home to roost.

To find out more about Patrick Buchanan, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at Creators Syndicate - Celebrating 20 Years as a World-Class Syndicate Of Talent.

COPYRIGHT 2007 CREATORS SYNDICATE INC.
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post #2 of 132 (permalink) Old 11-05-2007, 01:31 AM
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Teutone, As you know by my previous posts on this same subject I am with Pat 100% on this subject but the only replies you will probably get is Jayhawk accusing us of being chicken littles and McBear agreeing in general with the commentary.

The rest will ignore the thread and go out tonight and make another charge on their card without paying off the whole amount at the endof the month They will just let the good times roll and the credit card bills roll over.........
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post #3 of 132 (permalink) Old 11-05-2007, 02:39 AM
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The other thing in relation tot his is sometihng I heard on 1 of the news channels. It seems the US is importing a lot of raw materials to produce finished goods and then export those goods again. Of course since the US has fallen so far it will cost these exporters to import at a higher rate and then tuen the goods around and they have to pass these extra costs due to the low dollar on to their end customers. Of course they are not the only ones getting hurt in this, customers at GermanStar are getting hurt for any parts he cannot get produced in the States and he has to import from Europe at a rate as of today at 1.45+USD to 1 Euro.
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post #4 of 132 (permalink) Old 11-05-2007, 02:51 AM
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Ya boo sucks JE
I read this article and thought it made a lot of sense
PS
We have always paid off our credit cards on time in full
PPS
We have never had a mortage, and are not in any debt
PPPs
We do not live in a mud hut either
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post #5 of 132 (permalink) Old 11-05-2007, 02:56 AM
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Ya boo sucks JE
I read this article and thought it made a lot of sense
PS
We have always paid off our credit cards on time in full
PPS
We have never had a mortage, and are not in any debt
PPPs
We do not live in a mud hut either

In the States Diffy, you are truly in the minority........buy Euro, Sing dollar and Swiss Krone and some gold and silver

As for mud hut, that is why I only post pics of the garage where I keep our cars, the rest is mud, high quality mud but mud none the less, you certainly called that 1 right.......

Last edited by Jakarta Expat; 11-05-2007 at 03:02 AM.
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post #6 of 132 (permalink) Old 11-05-2007, 09:00 AM
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The only issue I have with this article is the suggestion that our government is not the first in line to exhibit bad judgment by borrowing and spending money beyond any hope being able to pay it back. Our government's policies and practices have been reduced to responding to Wall St. with its myopic vision into the future. And that has been a Bush administration priority. In the absence of any long term thought process the administration is perpetually reacting to the events of the day. It is like playing chess without a strategy and merely reacting to the opponent's moves. Jim
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post #7 of 132 (permalink) Old 11-05-2007, 09:13 AM
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Oh Jeez! Reading an article by Pat Buchanan [another Scot by the way] and agreeing with it bothers me on that principle alone.

Agree with Jim though, Government borrowing is just as bad as consumer and Corporate borrowing. And Government bailout of the Financial sector to cover their multiTrillion$ "judgment errors over the past decade. Greed and Avarice.

And just this past week Merrell and Citi CEOs paid the price for their piss poor lending policies which they just assumed would pass on to the next bundler of their loans.

Here in horse country we have a philosophy. You can have the best and fastest horse in the world [US Economy] but unless it is trained and disciplined it just runs around ruining all the other horses, teaching them bad habits and getting them hurt. We have let this horse run unbridled too long.

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Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #8 of 132 (permalink) Old 11-05-2007, 09:23 AM
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Pat Buchanan is a very sensible guy, mcbear. Embrace your inner Buchanan. Jayhawk would refer to him as a "kookberger". That should tell you something.

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #9 of 132 (permalink) Old 11-05-2007, 10:59 AM
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Pat Buchanan is a very sensible guy, mcbear. Embrace your inner Buchanan. Jayhawk would refer to him as a "kookberger". That should tell you something.
40,000 Florida Republicans can't be wrong.

When he is on a technical focus he is usually astute, it is when he puts his really right wing political cap on that I start trying to figure out if Rudolf Hess landed in Scotland about nine months before Buchanan was born.

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post #10 of 132 (permalink) Old 11-05-2007, 11:09 AM
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The man is a frequent flyer on MSNBC. It has been quite a long time time since I've heard anything extreme or irrational from him. Quite the contrary, he is surprisingly moderate and open-minded, especially considering his reputation.

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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