Free Republic

28 October 2008 In 2009 the US Will Be Forced to Selectively Default and Devalue Its Debt We have seen estimates that next year the US will have to finance a $2 Trillion annual deficit. They may be able to push it further into the next Administration than that by the forbearance of the world, but not by much. We'd expect a significant drop in Treasuries by 2011 at the latest. It should be obvious to anyone that we are approaching the apogee of the Treasury bubble, with the credit bubble having broken already. When the Treasury says they are...

U.S. Rep. Ron Paul, who has been an opponent of the government's bailout plan, spoke Friday with CNN's Kiran Chetry on "American Morning." The Texas Republican says the bailout's infusion of government money will lead to inflation, that our current monetary system is coming to end, and the market, not politicians, can best solve the economic crisis.Kiran Chetry: The last time you were with us you explained why you were against the government's bailout plan, why you were voting against it, and you didn't believe focusing on buying these troubled assets was the smart thing to do. Since then, they've...

The subprime crisis still dominates headlines as banks and financial institutions continue their multibillion-dollar writedowns and shoring up of depleted balance sheets with massive infusions of new capital. But is the biggest entity of all--the U.S. government--heading toward the financial rocks? Moody's, the credit-rating agency, got publicity--for once, not negative--in January when it warned that the U.S. government may lose its triple-A rating within a decade if Uncle Sam doesn't do something drastic about the unfunded liabilities of Social Security, Medicare and Medicaid. Let's put aside the sorry record of Moody's and its brethren in inaccurately assessing the creditworthiness of...

The euro's rise and dollar's slide are squeezing European exporters' profits or multiplying their losses, prompting layoffs and plant closings. Companies are not only curbing production of goods headed to U.S. buyers but also rethinking the way they do business. The euro recently passed the record $1.47 mark, gaining 11.5% since the beginning of the year against the greenback. It closed Friday at $1.46; a dollar bought 0.68 euro. Most emblematic of the problem has been the impact of the euro-dollar relationship on the aeronautics industry -- and particularly on France's Airbus, whose main rival is U.S.-based Boeing. With a...

All Headline News reported that Japanese exporters are trying to take advantage of the rise in the Yen rate. When the dollar spikes, they try to sell it in order to save up for later purchases in the year. The current yen rate hovers around 114 yen = $1. I remember when it was 260 yen = $1. Some of my missionary friends tell me of a time when it was 350 = $1. When Japan started to produce quality products for very affordable prices, everyone started crying 'foul' and 'undervalued,' and then trade imbalances started growing. In the end,...

For education and discussion only. Not for commercial use. Since the dawn of time - or so it seems - supporters of traditional trade liberalization policies have emphasized that keeping markets wide open raises living standards by giving consumers the widest possible choice of goods and services along with the lowest possible prices. Have various trade agreements been net job and wage losers? Have they boosted imports much more than exports, thus producing huge trade deficits and foreign debts? No problem in either case, say the globalization cheerleaders. The price reductions fostered by open markets and import competition always outweigh...

A Dollar Warning America can't devalue its way to prosperity. Sunday, November 28, 2004 12:01 a.m. EST President Bush has let everyone know he intends to pursue an ambitious second-term agenda. But if he wants to know what could spoil his plans even before his second Inaugural, he might consider the market reaction to his Administration's weak dollar complacency.

But a rash of new data, including Treasury Department figures released yesterday showing a net sell-off by foreigners of U.S. bonds in August, has stoked debate over whether overseas investors -- private individuals, institutions and government central banks -- are growing dangerously bearish on the U.S. economy. It is a portentous issue. Foreign governments and individuals hold about half of the $3.7 trillion in outstanding U.S. Treasury bonds, for example, and the government has been heavily dependent on continued overseas bond purchases to finance the roughly $1 billion a day it has to borrow to pay its bills. Foreign lending...

<p>NEW YORK (CNN/Money) - The prospect of what would happen if foreign investors cooled toward U.S. assets is giving Wall Street the cold sweats again. Perhaps it shouldn't.</p> <p>The scenario goes something like this: Thanks to the United States' massive budget deficit and current account deficit (that's the gap in the United States' trade in goods and services with the rest of the world), the dollar gets significantly weaker.</p>

IN URUGUAY, A WEIRD MONEY GAME INVITES U.S. BROKERS by Mark Scheinbaum American Reporter Correspondent August 7, 2002 LAKE WORTH, Fla., Aug. 7. 2002 -- I'm not an investment banker in Uruguay nor do I play one on television. But what if - just what if, I'm on to something here? I literally shook my head upon awakening at my usual 4 a.m. the other morning to check international markets, to clear the cobwebs and my ear drums when I heard that U.S. Treasury Secretary Paul O'Neill was enroute to the capital of Uruguay with a $1.5 billion bailout check...