Time to put a brake on the dollar's decline

We got into this mess because of cheap money. Low interest rates caused housing prices to increase far greater than inflation. Which allowed people to borrow money against them cheaply, which allowed them to spend money they did not have..... so how does the government want to fix the problem? Cheap money of course.

Let's go from one bubble to the next. :clap2:

 

Households face the unthinkable: Budgeting.

"After years of living large, U.S. households are finally learning what financial experts thought they never would: to live within their means. Economists have long warned that the U.S. consumer was on an unsustainable spending frenzy and that savings rates were dangerously low. Now, families are being forced into financial responsibility by the housing downturn and a weakening economy.
"For many years people on Wall Street have refused to believe that American consumers could ever change their spending habits," said David Rosenberg, North American economist at Merrill Lynch. "But it's happening."
"Frugality is in, extravagance is out," he added.
Consumer spending accounts for 70 percent of the U.S. economy and, according to Rosenberg, 30 percent of that is discretionary spending -- that is, buying stuff you can live without."

""This is going to take a bite out of consumer spending and is an ominous sign for the economy," said University of Maryland business professor Peter Morici. "We are in a recession that was manufactured on Wall Street by the major banks.""

"There are already signs that American consumers are "trading down" in the search for bargains, with February same-store retail sales showing customers favoring discounters like Wal-Mart Stores Inc over higher-end retailers. Merrill Lynch's Rosenberg said that in the fourth quarter of 2007, Americans' household debt almost equaled 140 percent of their after-tax income and that they were spending 14.3 percent of their after-tax income paying down that debt.
"Simply put, that means Americans are spending more on servicing their debt than they do on food," Rosenberg said. "This is not just affecting stressed-out or soon-to-be-foreclosed home owners. This hurts everybody."
Rosenberg predicted Americans will start saving more, which he said will shave 1 percentage point off annual U.S. consumer spending growth for years to come.
"It is hard to say how bad things will get," Rosenberg added. "We're in unchartered territory at this point.""

Now that the public is getting a clue, they are going to demand the same from their government.

 

the 'ride' is coming to an end and it is not going to be pretty

U.S. is in deep doodoo, but what do you expect when people put up with their insane government and they themselves do not want to change their ways?


just yesterday, i talked to my coworker who traded his 2003
ford F150 to a 2007 model, he said he got a 'good deal' as he 'only paid' 30K for it, and yes they gave him credit for his 2003 in amount of $8500.
wow, not bad considering there are not many people nowadays that are buying 2007 trucks for 30K, on 72 months at 440 per month, amounting to $31,680 that he is now financing.
so, yes, in actuality he got his new 30K truck for 31,680 + he gave them his old truck effectively.
And, i think he said he gave them 2K down as well.

ROTFL.


anyways, his new truck came with even bigger wheels and more crap... ops "accessories" so i am sure that mileage is even crappier. I bet you all they did is changed the wheels on that 2007 truck that was sitting for a year on their lot, put a few cheap gizmos in and -- viola -- a 'supper cool' truck awaiting a sucker is born!



yeah, good luck in changing minds of people like that dude.

and this kind of mindset has to do more with level of individual's consciousness than anything else.

you can't just keep taking more and more of resources, pollute more and more, like resources are unlimited and environment does not matter.

I knew intrinsically that Bush cabal was up to something when after 911 they started pushing people to buy big gas guzzlers.

Well considering that all of them are really greasy characters (both as human beings and greasy from Big Oil)
it kind of adds up, doesn't it?

they KNEW that end of cheap oil era was coming, so they made a last push to rob the people by first giving them the 'drug' (incentives to buy gas guzzlers) then gradually increasing the price of oil. That is why those criminals have killed/stifled/sabotaged alternative/green energy movement as soon as Bush came in the office.

Hey, after all -- they are all big oil men or connected to them wia greasy oil money, so super cool technology like prius is not in their best interests.

they sure need the people like my coworker.

 

I think the ony bright news on the horizon about the declining dollar is the Euro can't be far behind. I understand that the UK banks lend at 6X earnings on mortgages, that can't be good. The decline of the Euro is going to hit sooner or later.

 

yes, Euro is not doing much better, but it will get worse in long run.
Just like $, Euro is also a fiat based currency, that is -- it is just the same kind of 'monopoly' money that you can easily inflate/deflate -- if you are the one controlling its flow and value.

Europeans have major issues with Euro's "strength" as the exports are hit hard when they money is strong.

and who knows what people who control the money have up their sleeves?

Euro may plunge down really quickly, or it may float a bit more and plunge after $ plunges.
But, i do not see how one can stay strong while other is weak because the economies of countries are now interdependent, which is really, really bad!
poke a hole in one country's economy and others will feel it as well, depending on how much interdependence is there.

it is really sad that all of the clean technology that we could be building, technology that can help human race, clean the nature, improve life on all planet is not being even taken seriously at this time by majority of corporations.
big oil and big military contractors could use their resources to improve the life on earth for all of us, but there is no conscious thought in their head, it seems.


we need a paradigm shift, a point where the people begin to DEMAND from "public servants" that crazy irrational ways that many live buy now are changed, that we start using technology for betterment of life, not to build a bigger bomb that destroys more life and more environment or build some stupendously big vehicles that will destroy environment and our children's lungs.

I really love what Totyota has done so far and that is a good example of what a conscious company should be doing in first place.

 

There's far more wrong with the economy than falling currency values. Our entire financial system is based on NOT recognising true costs. We're liquidating our natural capital and calling it income. We're ignoring very real and escalating costs like pollution by calling them 'externalities.' We tend to consider only our own points of view, and not the long term consequences for all concerned. I'm not sure 'paradigm shift' begins to describe the massive changes in thinking required, but it's a start.

 

The argument is intellectually bankrupt. A weak dollar is very likely keeping us out of a worse recession, it props up manufacturing in a big way and fosters foreign investment.

Without those two things right now, we be in a real economic crisis.

And don't kid yourselves that the weak dollar is a "side effect", it's done on purpose, just never spoken about.

 

[pathetic induhvidual story deleted] Ooh, and I'll bet he got a really good interest rate, too. That's capitalism: sell the peepul what they think they want.

 

I would say it's both good and bad... if all the economies in the world were so intertwined, it would lead to a massive reduction in violence between nation-states. Think about it... you go to war and destroy someone's ability to produce goods and services, which ends up just biting you in the nice person. Of course, it's bad because when someone screws up, everyone feels the pain.

 

This is a bit off topic, but some of the posts above relate to resources and the frightening rate at which we are using them. My questions is this: what ever happened to the concept of population control? That used to be a hot topic, now I never hear anything about it. Obviously we can't directly control the world's population, but population is directly related to the consumption of resources. If there were only six people in the world, it wouldn't matter how much they used or where they put their garbage, but with six billion the problem gets a little bigger. Has the world given up on population control? Have we forgotten where babies come from? I'm just curious.

Tom

 

Here, here! for population control. Everyone should not be allowed to have children anyway.

 

Wonder if there should be a bonding requirement for having children (similar to a minimum insurance level to be able to register your car to drive on public roads)?

 

Is this sarcasm? It's so hard to tell nowadays.

 

Driving a car is a privelege, not a "right".

having children should be the same, and should come with a test to qualify the parents. To drive a car, you need a license. Having children is slightly more important, yet any bozo can do it? thats only part of the problem

As for the US, just how long can we be the worls policeman, and at what cost? 12 BILLION per day for Iraq. I think we could do a lot more good with that money IN THIS COUNTRY, solving our energy problems. Iraq is going to fall apart anyway, its just a matter of time. Why do WE think that factions that have been at war for tens of thousands of years, we can solve their issues? thats just plain stupid, and shows our extreme arrogance. Rome had its day, and the U.S. has as well. All great nations must end, and we are about done.

mitch

 

Having children is slightly more important, yet any bozo can do it? thats only part of the problem[/quote]

Requiring drivers to be licensed has nothing to do with how "important" driving a car is. It has to do with accountability, tracking and verifying to the best of the state's ability (or something like that) that the driver is not likely to go out kill one or several people (including themselves) because they can't control or aren't responsible enough to handle a multi-ton box of metal, glass, gasoline, etc moving at high speeds.

The ability to start a family, to have children is both a huge responsibility AND a fundamental human right. In your universe, who sets the qualifications for who can and cannot have children?

No argument here. The war was immoral, unjust and illegal from the start. The sooner we end all aggressive operations and clear the **** out of there the better.

 

You said the f word!!!

 

The real surprise is that it made it through the filters that usually 'correct' the spelling. Things could get interesting....

 

Yes, it is true. That's how mad the Iraq slaughter makes me. I accept full responsibility for my filthy mouth. ^_^

Anyhow, maybe to bring this thread back on topic - has anyone set aside a portion of their investments as hedges against the decline of the dollar? In gold, other currencies, etc?

Also, anyone care to wager a guess on when the Australian dollar will reach parity with the greenback? When I joined the company I work for waaaaaaay back when (2001) the US dollar was floating around 0.48 to the Oz dollar (48 US cents bought 1 Australian dollar). When I finally got to visit Australia in 2006 the exchange rate was much less favorable but still nice for me - about 0.75 to the AUS dollar. Last I checked it's sitting out 0.92 to the AUS dollar. Ouch.

I really need to haul nice person to NZ before they reach parity as well.....

 

I know Australia is a pimple on the arse of the global economy but our interest rates are going up and the Aussie dollar is going up against $US, UK pound and Euro. I am currently paying over 9% interest on my home loan.