Posted on 09/29/2007 10:37:13 AM PDT by frithguild
Gold is now at $744, and the dollar has fallen below any support to 77.67.
Argentina status, here we come.
Probably because W came out and said he wouldn't support the dollar and then went on a spending spree.
The only good news in this bleak situation is that other nations’ currencies are also built on a house of cards. Sound monetary policy around the globe has gone the way of the horse and buggy.
While inflation skyrockets, look for the Government stats to say that it remains at 2-3% annually. The whole things is a BS scheme to bail out Wall Street and the Banks from their idiotic excesses with other peoples money. As a side effect, it will increase Government revenues while holding down the cost of pensions and SS [not necessarily a bad thing]. In the mean time, the rest of us will take it in the shorts.
We need a weaker dollar? Really? We need to end the 60 year era of the dollar as the world’s reserve currency? Do you have any idea what this will mean?
Inflation will rise. Food prices are going up. Energy (oil) is not counted into the inflation numbers.
The cut in interest rates is to prevent a nosediving economy. It just might.
I do agree that the next 2 years might be a rough ride.
"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market and so check the movement."
---Harvard Economic Society, October 19, 1929
I have a small clue. The Dollar needs to weaken, this forces China’s hand. I offer my sincerest apologies if you plan on vacationing overseas anytime soon, but a weaker Dollar is better. It was overvalued to begin with IMO.
"No, it's all about the Fed. It's all about how many dollar bills they churn out of their printing presses, and how many helicopters they use to rain those bills down upon our heads. That's all that matters." That's overly metaphorical.
From what I can gather our currency is devalued with any inordinate lending by banks, or by Communist China lending to the U.S. Government through our bonds/debt.
Imagine an economy where money is 'created' whenever fractional banking (with 5% or whatever 'required reserves') extends loans, mostly by electronic transfer records, for most of the big-ticket items we buy now (Houses, cars, education, medical services...) and increasingly for so much of our other purchases through credit cards (at grocery stores, auto repair shops, restaurants, etc.).
The theoretical limit to the 'money supply' then becomes the extent of our appetite as a nation for 'credit' from the moneylending industry.
Add to that the propensity for spending (devaluing currency) induced by making 'cheap' money through all 'third-party payers': insurance, government subsidy/transfer payment, financing ...
That's a debauched currency ... and a debauched culture.
Get comfortable. The USD decline is far from over, until or unless the Treasury intervenes (which, btw, is pretty unlikely, wpeaking historically).
It is happening.
On top of that, Bush wants to borrow a trillion bucks to preserve the full faith and credit of the U.S., which I believe is a lie. To put that much money into circulation will destroy a good percentage of whatever value we've currently attached to federal reserve notes -- dollars.
Are we being economically manipulated to beg for the Amero, which supposedly will retain the current value of the FRN or is that just another lie?
Seat belts, folks. I think the economy is coming in for a landing.
Bingo. The rest of the world follows our lead, we peaked and are going back down to normal, they are right behind us. All will be in line by the middle of next year. Sorry doom and gloomers its not the end of the world yet. :)
BigMack
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