Posted on 11/28/2006 8:13:23 PM PST by A. Pole
The dollar tumbled to a near a 15-year low against sterling yesterday on fresh signs of economic trouble in the United States.
An 8.3pc crash in US industrial orders and an admission by the Federal Reserve chairman that Washington does not know how bad housing really is set off another day of wild gyrations on the currency markets.
US house prices fell 3.5pc to an average $221,000, the third month of declines. Stocks of unsold homes rose to 7.4 months' supply, the highest since 1993. The US consumer confidence index fell sharply to 102.9.
The "truckers index" of tonnage shipped by US haulage companies was down 1.8pc in October, a leading indicator of contraction. Merrill Lynch called the fall "borderline recessionary".
The dollar continued its slide against the euro, dropping to $1.3194 after the Federal Reserve chairman, Ben Bernanke, said the housing slump "would be a drag on economic growth into next year".
[...]
The OECD downgraded its global growth forecast for the 30 leading economies from 2.9pc to 2.5pc in 2007, and said the US might need to start cutting interest rates next year.
Chief economist Jean-Philippe Cotis said there was no cause for alarm, arguing that the US would achieve the "soft-landing" it eluded after the dotcom bubble in 2000. "What the world may be facing is a rebalancing of growth," he said. "In the euro area, recent hard data suggest that a solid upswing may be under way. Growth should remain buoyant in China, India, Russia and other emerging economies."
[...]
(Excerpt) Read more at telegraph.co.uk ...
Rebalancing of growth bump
Guess the world isn't really all that happy with a democrat takeover of our government. Guess americans aren't all that sure either.....
I like that term. We are no longer declining, just rebalancing growth. Orwell would be proud.
DemocRATs fault since they won the election and cannot keep their mouths shut about what they plan to do with their power which is stick it to us taxpayers! :(
"DemocRATs fault since they won the election and cannot keep their mouths shut about what they plan to do with their power which is stick it to us taxpayers! :("
How are they going to do that without President Bush's signature on any bill that they pass?
by attaching tax increases to other bills - like iraq war funding.
That would mean a veto.
I think he just did his first one a few months ago.
Cheaper dollar means more exports...not bad at all.
Those holding dollar denominated debt/assets will soon be looking to sell, driving the dollar even lower.
Canadians coming by the hundreds/thousands daily to shop here in the border region of NY. Lots of benefits to the falling dollar.
http://www.washingtonpost.com/wp-dyn/content/article/2006/11/27/AR2006112700964.html
except oil prices will zoom. and there will be inflationary pressures of all those chinese imports now costing alot more.
the day of reckoning here has been a long time in coming - we should have dealt with it earlier, should never have allowed free trade with china so long as they maintained a currency peg, which created an artificial low cost environment that sucked in massive investments of US corporations. instead of those investments being made at home, we built our own economy around a housing bubble, mortgage debt, and consumer spending.
let's see how ugly it gets, if this transition can be managed without some crash.
Maybe "rebalancing" is equivalent to "redeploying" and Murtha can be of some help.
Ssshhhh....that's a dirty little secret.
How many times do you think the President will use his veto pen?
He owns a veto pen?
We are the worlds biggest economy and have a great deal of "insulation". However, should the dollar stay real low for a real long time our economy will downturn as the foreigners sell the dollar denominated assets. Stocks, real estate etc. could get HURT.
Ben Bernacke used the term "deceleration in housing-related activity" in his speech today. Much fancier than "bust of the housing bubble".
Huh? Do you have any idea of how much of a multiple we import compared to what we export?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.