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GREENSPAN SEES A SINKING DOLLAR
Houston Chronicle ^ | December 12, 2006

Posted on 12/12/2006 8:40:21 AM PST by GodGunsGuts

Dec. 11, 2006

Greenspan sees a sinking dollar

Bloomberg News

Former Federal Reserve Chairman Alan Greenspan said the dollar will probably keep falling because it's unlikely that international fund managers will continue to increase their allocations to the U.S. currency.

Russia and other oil-producing currencies are shifting their assets out of dollars toward the euro and yen, a Bank for International Settlements quarterly report showed Monday. Greenspan said the dollar, heading for its fourth annual decline in the past five years, will probably keep falling until the U.S. current-account deficit diminishes.

"It's imprudent to hold everything in one currency," Greenspan said Monday by satellite from Washington to a business conference in Tel Aviv.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: alangreenspan; alasandalack; brokenrecord; currentaccount; depreciation; depression; despair; dollar; doom; dustbowl; eeyore; joebtfsplk; onenotesuzie; repent; sackclothandashes; woeisme
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To: BonnieJ
Didn't he do enough damage in all the long years of his reign, why can't he just be quiet finally and retire?!

Because he has a very guilty conscience... Nonetheless, he won't admit that the policies of denial and rationlaization for inaction in the trade deficit he effectuated...and are still Gospel Writ today even yet...has to put out some spin to try and deflect attention from the key variables causing the declines.

21 posted on 12/12/2006 9:07:12 AM PST by Paul Ross (Ronald Reagan-1987:"We are always willing to be trade partners but never trade patsies.")
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To: Paul Ross
I agree with you completely. We need to seriously start reducing our massive deficits by cutting taxes, and cutting SPENDING even more. And we need to cut off all aid, trade and tech. transfers to our enemy, Red China.
22 posted on 12/12/2006 9:09:31 AM PST by GodGunsGuts
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To: GodGunsGuts

I'm just back from five weeks in Poland. For years I got 4 zlotys to the dollar; now I get less than 3. The way our government is going to reduce the debt is to sink the dollar and pay off the bills with cheap money.


23 posted on 12/12/2006 9:32:32 AM PST by Malesherbes
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To: Malesherbes

And screw our trading partners/dollar reserve holders in the process. Anyone ever hear of cutting spending??? That used to be what Republicans were all about.


24 posted on 12/12/2006 9:40:07 AM PST by GodGunsGuts
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To: GodGunsGuts
All I want to know is how much "Kermit the Frog" Greenspan's wife made off the Stock Market while hubby was head of the Federal Reserve? hmmmmmmmmmm...
25 posted on 12/12/2006 9:42:11 AM PST by kellynla (Freedom of speech makes it easier to spot the idiots. Semper Fi)
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To: GodGunsGuts

THE KINGSTON TRIO lyrics - "Greenback Dollar"

(Hoyt Axton/Ken Ramsey)

Some people say I'm a no 'count. Others say I'm no good.
But I'm just a nat'ral-born travelin' man, doin' what I think I should, O, yeah. Doin' what I think I should.

[Chorus:]
And I don't give a damn about a greenback dollar, spend it as fast as I can.
For a wailin' song and a good guitar, the only things that I understand, poor boy, the only things that I understand.

When I was a little baby, my momma said, "Hey, son. Travel where you will and grow to be a man
And sing what must be sung, poor boy. Sing what must be sung."

[Chorus]

Now that I'm a grown man, I've traveled here and there. I've learned that a bottle of brandy and a song,
The only ones who ever care, poor boy, the only ones who ever care.

[Chorus, repeat first verse and repeat Chorus]


26 posted on 12/12/2006 9:59:38 AM PST by Red Badger (New! HeadOn Hemorrhoid Medication for Liberals!.........Apply directly to forehead.........)
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To: Malesherbes
The way our government is going to reduce the debt is to sink the dollar and pay off the bills with cheap money.

Indeed, they are. And they are lying about it too. Won't publish M3 numbers.

27 posted on 12/12/2006 10:00:49 AM PST by Paul Ross (Ronald Reagan-1987:"We are always willing to be trade partners but never trade patsies.")
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To: Obadiah

This will kill the Europeans,imports will be cheaper and exports will raise wiping out profits.

It usually takes about two years for the true effects of exchange rate changes to filter through the 25 EU economies.

Even now the French are calling for a return to the Franc and the EU commission is considering utilizing Article 111-2 of the Maastricht Treaty giving EU finance ministers the power to shape the exchange rate.

The commission invoking the "nuclear option" would basically shut down the European Central Bank.The effects on the Franco-German "canoe club" would be interesting to watch.

Meanwhile we will still be buying 99c hamburgers and enjoying a 5-6% mortgage rate.





28 posted on 12/12/2006 10:21:24 AM PST by managusta (Light travels faster then sound !This is why some people appear bright until you hear them speak)
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To: Petronski
I used to have to pay good money, sit in a smoky club with a 2 drink minimum to hear comedy like this. Now I just listen to the goldbugs and crack open a cold (American) beer at home.

With all the money I save, I think I'll buy a BAHOG!!!!!

29 posted on 12/12/2006 10:30:17 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: jdm

Soon the situation will be eleventy jillion times worse than originally thought! Then flation will destroy us all...slowly, with an evil sneer.


30 posted on 12/12/2006 10:34:00 AM PST by Petronski (I just love that woman.)
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To: GodGunsGuts; Toddsterpatriot

"Greenspan sees a sinking dollar"

This may be bad news for long-bond bag-holders but it's excellent news for those who own real assets, not fiat paper!

Don't you think so, Toddster?

Buy gold stocks! ;^)


31 posted on 12/12/2006 10:51:46 AM PST by headsonpikes (Genocide is the highest sacrament of socialism.)
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To: BonnieJ
why can't he just be quiet finally and retire?

Perhaps because for the first time in nearly 20 years his personal financial accounts are no longer frozen, and he can PROFIT by his own comments. Which may explain why he is commenting so frequently on a myriad of topics recently.

32 posted on 12/12/2006 10:56:18 AM PST by montag813
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To: headsonpikes
This may be bad news for long-bond bag-holders but it's excellent news for those who own real assets, not fiat paper!

Or non-dollar denominated assets. Remember, Greenspan thought the market was overpriced, almost exactly 10 years ago, when the Dow was around 6400, the Nasdaq was about 1250 and the S&P 500 was about 740. Just because he sees a sinking dollar doesn't mean he's right.

33 posted on 12/12/2006 11:20:57 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: Toddsterpatriot

Actually, he's a little late to the party. The dollar has been falling for years. But he's right about one thing. Given our massive deficits, coupled with our inability to compete with Red China's slave labor force, the dollar has no choice but to fall further (barring a massive rate hike by the FED and/or massive spending cuts by Congress).


34 posted on 12/12/2006 11:34:26 AM PST by GodGunsGuts
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To: GodGunsGuts
The dollar has been falling for years.

Except for when it's been rising. Or staying the same.

35 posted on 12/12/2006 11:41:45 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: Toddsterpatriot

The flation crisis is out of control!


36 posted on 12/12/2006 11:42:32 AM PST by Petronski (I just love that woman.)
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To: Toddsterpatriot
Or non-dollar denominated assets.

True, as far as it goes. But I can't see the Euro or any other fiat doing better than the US. After all, when push comes to shove geopolitically, only the US is in a position to do any sustained shoving.

Some smaller currencies, such as the swissy or canuck might do better, but these are small markets that cannot possibly absorb the amount of buying interest that will be sparked by a continuing slide in the dollar, say below 80 on the index.

That said, diversification is always a wise plan.

37 posted on 12/12/2006 11:45:37 AM PST by headsonpikes (Genocide is the highest sacrament of socialism.)
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To: Petronski
Everyone complains about flation but nobody ever does anything about it.
38 posted on 12/12/2006 11:51:42 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: headsonpikes
True, as far as it goes. But I can't see the Euro or any other fiat doing better than the US.

That's why I only have about 30% outside the dollar.

39 posted on 12/12/2006 11:53:19 AM PST by Toddsterpatriot (If you agree with EPI, you're not a conservative!)
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To: Toddsterpatriot

That about covers it . . . thanks.


40 posted on 12/12/2006 11:55:23 AM PST by 1rudeboy
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