Posted on 11/27/2004 10:24:13 AM PST by soccer_linux_mozilla
The United States’ trade deficit is soaring and the once high-flying dollar has sunk to record lows against Europe’s common currency.
The dollar’s record low against the euro coincided with the government’s report that the United States was running a trade deficit through September at annual rate of 592 billion dollars. That compares with last year’s record 496 dollars billion. As a result, the country is having to borrow almost 600 billion dollars from overseas this year to pay for the imported cars, televisions and other items Americans are buying.
c#199
c#176
You aren't looking at the biggest picture. Productivity does not always include workers. Here's an example: Sam's Club is a warehouse distributer. I go there about twice a month and load up on household items. As I check out there is a scan of each item. UPS, or someone gets that scan. They relay the data to suppliers who input data that gets producers ready for demand. Producers know instantly how much of their product has been bought and have a relatively good guess how much will be needed the next month. Product is shipped. Sam's club merely has to protect itsel from producers who want to ship more than their history warrants.
Sam's Club knows its inventory by the item every day and every minute. It automatically reorders those items that are selling the best. It has someone like UPS to monitor that situation. So UPS is their inventory control. Think about it. What an enormous increase in productivity has occurred!
Show me *one* example of an American bank calling a *performing* home mortgage due to foreign exchange Dollar devaluation.
You can't do it (because you are making up "jpsb economics" out of your butt).
Well yes and no, while the US was on the gold standard dollars were pretty safe, so 1776-1971 don't count. There were good reasons for getting off the gold standard (France, what a surprise, wrecked that system) so I'd say we are really looking at 1971 till now, hardly 200 years and growth has been up and down over those 30 years. And when one looks a the debt load of the USA one might wonders just how the hell the USA is going to pay it 45 trillion dollars of unsecure debt? Devalue? Maybe dollars are not such a good thing to hang on too.
The truth is that this is a hardball game being played out. China pegs the price of its currency to the dollar so that no matter what happens to the dollar, Chinese goods are undervalued and American goods uncompetitive in comparison. This is a game of brinksmanship to get the Chinese to blink and decouple the Yuan from the dollar. Once that happens, then the dollar will go back up. But they have to blink first. There's a lot more down before we see some up.
I moved money into Vanguard's international fund ... Good? Bad? Indifferent? Let me know what you think.
If I had any free money I would buy gold, or even better gold mine stock. Nothing weathers a storm like gold.
I would love to give you advice on this forum but I can't. When we take and pass the Series 7 exam we lose our freedom of speech. The powers that be tell us what we can say and what we can't say. You would be wise to consider that the next time a financial advisor gives you advice. Freep mail me.
I'm not saying it's not better. I'm just saying that having a percentage of equity in a home is not "owning" it.
Only 20% of the people identify themselves as liberals, yet 48% of the people voted for the liberal in a bunny suit who is not very good at security issues and the WOT.
That tells me that far too many people in this country are liberal -- I don't care how they identify themselves.
The *reason* that Freidman is wrong is that you want to encourage the increase in speed of the velocity of money.
...And people *hoard* cash if they perceive it to be a good store of money...an action (i.e. hoarding) that is antithetical to speeding up the movement of money.
Your economy becomes more robust as money churns through more and more transactions at ever faster rates. Paying a bill online, paying for a book online, trading stocks online instead of mailing in market orders, all of these things speed up the velocity of money...and that has the effect of increasing the wealth for everyone involved.
The counter-example is South America. In South America the billionaires hoard money. It's cultural. The billionaire's wife has to haggle. When she shops she has to get the absolute best price deal or else she loses face. To avoid losing face, she won't consumate a deal that doesn't give her a lower price than anyone else...so deal after deal fails to get done. The store-keepers know that she's rich...they know that she doesn't deserve a lower price than the starving peasants who shop there, so they don't want to cut her a better deal than everyone else. Again, it's cultural. They would lose face if they caved to every rich shopper.
So enormous amounts of everyday transactions fail to happen in South America. The end result is that money doesn't move very fast down there...and if money doesn't move, your economy acts as though no one has any money...as if you lived in a time before money was even invented...stone age poverty. Hyperbole added for effect, of course.
Compare. Contrast. Money moves enormously fast in the U.S. and we are all prosperous. Money in South America, though, moves so slowly that those nations have very lethargic economies.
But, those South American billionaires love to store their wealth in the form of cash (though often in cash form other countries). They "see" their wealth in terms of cash on hand. To them, money should store wealth.
To me, that's precisely what moeny should *not* do. Money should merely facilitate retail and wholesale trades, not act as a store of wealth.
If you want to store your wealth, then you should use money to purchase traditional stores of wealth such as real estate, mineral rights, oil itself, gold, factories, licenses, etc.
Freidman wants your money to store wealth. That's the South American recipe for economic stagnation. There are better ways to store your wealth than cash...
I think we are in a better situation today than we were in 1984, and GWB did much worse.
Excellent article by Dr. Paul Craig Roberts.
I used to read his articles on Business Week in the late Eighties.
Lessee. Milton Friedman is an idiot and you are recommending storing your money in something other than cash. Oh, Yeah, people should listen to you. Do you have a rational thought about investments or are you a self appointed guru?
Friedman is a genius, but that doesn't mean that he's perfect. He missed the call on currencies storing value. One mistake per lifetime hardly makes him the idiot that you claim above.
If you want to hold cash, fine...but cash is a very poor way to store wealth, and I don't recommend hoarding such financial instruments during *this* period of Dollar devaluation.
Your mileage may vary. Thankfully, we're on separate trips.
Good Night you flaming mooncalf. Sheesh. Have another and call me in the morning. You are not making sense.
Only about 1% of the populists own Gold or Gold mining stocks. About a year ago I put about a third of my checking account into an electronic account where you can own Gold. For a $3 dollar fee can either buy or withdrawal money from the account. Needless to say my checking account is sure earning more than 0.5% interest the bank offers.
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