DOLLAR SKY IS FALLING! DOLLAR SKY IS FALLING! EVERYONE PANIC!

10/25/2007 | Philistone

[Philistone]

To read the MSM headlines (which I try not to) the falling dollar is the end of the world. Maybe Wall Street should get a Noble Prize for their work in "Global Dollar Cooling". But seriously, what are the effects of a weak dollar?

1) Increased exports. Last month's exports were among the highest on record. Trade deficit? What trade deficit? Boeing, Caterpiller, Microsoft, Apple, etc. all with surges in foreign export sales.

2) Outsourcing? What outsourcing? All of the sudden it becomes cheaper to employ an American technician than one from Bangalore.

3) Cost of living? (I love this part!) Since China has pegged the Yuan to the Dollar, everything we get from China costs exactly the same! Maybe this will convince them to unlink the Yuan. Then we'll REALLY see who's the best producer.

4) Buhh... buhh... buhh... but foreigners will stop buying American Treasuries! What? In order to buy Russian ones? Chinese ones? Venezualian ones? Give me a break.

A weak Dollar equals: more exports, more jobs, more tourists (spending money) and the same or higher standard of living.

Bring it on!

[jedward]

“The 10 Economic Freedoms. Overall economic freedom, defined by multiple rights and liberties”

P.S. That should throw a flag up for anyone reading.....

[stephenjohnbanker]

“We have a free trade agreement with Singapore. And a trade surplus”

True, I should have mentioned that......but the surplus is predicated on negative amortization on the LC.

[stephenjohnbanker]

“Soros (the evil genius) is a comforting thought.”

How you like them apples? Soros is a currency thief who almost bankrupted Thailand, Indonesia, and Malaysia(97)
And here we have a FReeper who sees no problem with a perverted, subversive SOB who is anti gun, pro abortion, and pro Marxist. I guess I have lived too long!

[1rudeboy]

But that's the thing, you (in the more expansive sense) want to wait for SP2, and set macroeconomic policy now. It doesn't work that way. And so what if Heritage's methodology changes? It's published, and if the libs over at Brookings or the socialists over at EPI wish to challenge it, they will.

One more important thing: the change of methodology only comes into play if you are comparing results year-to-year, say, the United States' score in 2003 with its score in 2006. That's not the purpose of the Index. It purports to compare countries in a "snapshot" fashion. As long as the method is consistently applied across the group, then there is no problem if the method itself is changed. So, for example, the Index compares the United States with the United Kingdom over the same yearly period.

What's left [pun intended] for a critic of Heritage's methodology is to claim that Heritage is altering its methodology to favor one (or some) countries over others. I've never seen anyone make that argument . . . .

Finally, someone who favors more governmental intervention in the economy is ipso facto less in favor of freedom than another who does not. Benevolent motives don't count.

[1COUNTER-MORTER-68]

Much more scary to realize there aren’t any mysterious “powers that be” exerting control — only global market forces at work. Compared to ten thousand guys at keyboards trying to make a buck, Soros (the evil genius) is a comforting thought.
~~~
JMO,,,Soros is in all this(control)up to his eyeballs,,,
He’s just the one we see the most of,,,
I’m sure he has a great number of people working for him,,,

Oil went over $92 per barrel today so I guess we will soon drill the “Sacred Grounds”(Anwar/Etc.),,,NOT !!
So much for market forces...

[stephenjohnbanker]

“Finally, someone who favors more governmental intervention in the economy is ipso facto less in favor of freedom than another who does not. Benevolent motives don’t count”

Actually, our government IS the problem, and has been for many years. How do we fix it? Question of the millinnium!!

[durasell]

It’s easy to put a face to a trend and to dislike/hate an actual person. There’s also some comfort in believing someone is “running the show.” In fact, nobody is running the show. It’s thousands of people in trading rooms around the globe tapping away at keyboards.

[jedward]

I’m occupied at the moment...hang on.

[texastoo]

I don’t know. Evidently it is legal. Try this link for answers to your questions. Check out section 2B.

http://www.federalreserve.gov/GeneralInfo/fract/default.htm

[1COUNTER-MORTER-68]

It’s easy to put a face to a trend and to dislike/hate an actual person. There’s also some comfort in believing someone is “running the show.” In fact, nobody is running the show. It’s thousands of people in trading rooms around the globe tapping away at keyboards.
~~~
Soros put his own face on/in this mess,,,as well as his money,,,
Tip of the iceburge so to speak...

[jedward]

“But that’s the thing, you (in the more expansive sense) want to wait for SP2, and set macroeconomic policy now.”

Not true. I don’t wait for SP2, I either keep using what I have or find a better alternative to take of the ‘now’.

“Heritage’s methodology changes? It’s published, and if the libs over at Brookings”

With all due respect...Newsflash...it’s challenged by Conservatives, Liberals, Republicans and Democrats. That’s another good indicator of something.

“That’s not the purpose of the Index. It purports to compare countries in a “snapshot” fashion.”

Here is what the purpose is for the Index from the horses mouth:

With the publication of this edition, The Heritage Foundation/Wall Street Journal Index of Economic Freedom marks its 13th anniversary. The idea of producing a user-friendly “index of economic freedom” as a tool for policymakers and investors was first discussed at The Heritage Foundation in the late 1980s. The goal then, as it is today, was to develop a systematic, empirical measurement of economic freedom in countries throughout the world. To this end, the decision was made to establish a set of objective economic criteria that, since the inaugural edition in 1995, have been used to study and grade various countries for the annual publication of the Index of Economic Freedom.

http://www.heritage.org/research/features/index/chapters/htm/index2007_execsum.cfm

“What’s left [pun intended] for a critic of Heritage’s methodology is to claim that Heritage is altering its methodology to favor one (or some) countries over others. I’ve never seen anyone make that argument . . . .”

You haven’t seen me say that either. You are completely missing my point concerning Rights and Liberties.

*****”The 10 Economic Freedoms. Overall economic freedom, defined by multiple rights and liberties”

“Finally, someone who favors more governmental intervention in the economy is ipso facto less in favor of freedom than another who does not. Benevolent motives don’t count.”

See, there’s that word Freedom again. Are you talking about freedom of speech or “trade openness”? I understand who reads this index and makes choices based on it. And I have no problem being critical of it.

I went through a similar thing with someone recently. There were Libs against the Mexican Truckers portion of NAFTA, and so too were the Teamsters. So just because of that, we’re supposed to sit on our rears and go against something, just because they support it? I don’t work that way. Yes, I disagree with a lot of Republican leaders. So bit it, they’re selling this nation out.

[jedward]

Stop and reassess. The predictions of us being able to cozy up to the Soviets to counter China is DOA. China, but most importantly Russia is making moves right now that would scare the living crap out most people if they just kept up with the news. Not the TV, not the US media news, but the world news (lol). Damn...and their still dumping the dollar in the desert over there. World Bank/IMF Chairman comes out...this morning I think and signals a possible global recession due to the dollar drop. Again...maybe the rest of world is wrong, and we can sleep soundly that our current leaders have our best interests at heart (snort)

[jedward]

Hey there durasell...

[grey_whiskers]

About those MRSA infections...

Try this.

Cheers!

[jedward]

I think there have been some wrenches thrown into the big boys spokes. The first few sections of this index we’re talking about has a lot of whining about that past year and how their upset with our congress. They’re hoping to change more minds to accept this ‘freedom’ of theirs :)

[stephenjohnbanker]

“Again...maybe the rest of world is wrong, and we can sleep soundly that our current leaders have our best interests at heart (snort)”

Uhyeah.......

[am452]

WASHINGTON – New home sales in the United States posted an unexpected increase in September. Analysts, however, viewed the small gain as highly questionable given the severe credit crunch that rocked the housing industry this summer. They predicted further sales declines before the worst housing slump in more than two decades comes to an end. The U.S. Commerce Department reported Thursday that sales of new homes rose by 4.8 per cent last month to a seasonally adjusted annual rate of 770,000 units, an unexpected jump when economists were looking for a 2.5 per cent decline. But analysts noted that the small increase came in a report in which the government revised the performance over the past three months sharply lower, showing that sales in August fell to an annual rate of just 735,000, the slowest pace in 11 years. And even the small September increase from that low number was viewed with skepticism. All of the strength came in the West, a region that was pounded by the severe credit crunch that hit in August, drying up the availability of so-called jumbo mortgages, loans of more than US$417,000 that are heavily used in such high-cost areas as California. "This is definitely not a signal that the housing market is turning around," said David Seiders, chief economist at the National Association of Home Builders, whose own survey of builder confidence fell to an all-time low in early October. By region of the country, the government report showed that sales of new homes surged by 37.7 per cent in the West, a highly suspect rebound given what was happening in the jumbo loan market. Sales were also up a tiny 0.5 per cent in the South but were down in the rest of the country, falling 19.5 per cent in the Midwest and 6.6 per cent in the Northeast. The report on new home sales stood in contrast to a variety of other statistics showing that housing, which has been slumping since late 2005, was battered anew this summer when lenders started tightening loan conditions in the face of rising mortgage delinquencies. The National Association of Realtors reported Wednesday that sales of existing homes fell by a record eight per cent in September, a far bigger drop than expected. The nation's home builders have been reporting tough times. D.R. Horton Inc. said the cancellation rate on home contracts hit 48 per cent in its most recent quarter, twice the normal rate. Analysts said given all the problems, home sales are likely to continue to fall for some time to come with the housing market not stabilizing until inventories are brought under better control. That problem has been exacerbated by the rising number of homes going into default, which pushes more homes onto an already glutted market. "We are expecting sales to continue to drop and not turn around until next year," said Patrick Newport, an economist at Global Insight. The report on home sales showed that the median new home price in September – the point where half the homes sold for more and half for less – rose to $238,000, up 2.5 per cent from August, which had seen prices fall to the lowest level in nearly a year. However, economists said the price increase was skewed by the fact that most of the sales gains occurred in the West, where home prices are generally more costly.

How do you keep that thing from falling off when you shake your head?

O.k. I'll change my word from lied to "just not giving out ALL the information until next month" . My opinion is the gov't is desperate for some good housing news to jump start the housing market again. Why not make the situation appear rosier-might just work. get enough new homes sales from it to help the housing situation look better. If it doesn't work then just revise the figures lower for the following month. They done it before. Time and time again they give a somewhat good figure only to come back and revise them downward the next month-just as the NAR does seemingly every month. The gov't did it the last 3 months according to the article. BTW: I place more credence in the analyst in the article than yourself. .

[DB]

Call me foolish, I just see this as the markets correcting for all those years of huge trade deficits. The real estate bubble allowed every thing to continue on as if there weren’t any problems much longer than it should have because foreigners were buying our debt. Now that they aren’t buying that debt because the returns have gone way down they have too many dollars from what we buy from them. The over supply and less demand of dollars will force its value lower until it finds equilibrium.

[jedward]

Happy thoughts...happy thoughts (lol)

[am452]

How do you keep that thing from falling off when you shake your head?

Has the US gov't ever lied to the populace? Give me a Yes or No answer.