Sinking Currency, Sinking Country

Sinking Currency, Sinking Country

news.yahoo.com

A sinking dollar means a poorer nation, and a sinking currency has historically been the mark of a sinking country. And a superpower with a sinking currency is a contradiction in terms.

What does this mean for America and Americans?

As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they will demand more dollars for those goods. This will mean rising prices for the imports on which America has become more dependent than we have been since before the Civil War.

(visit the link for the full news article)

If you have been paying attention to the news you will know that the dollar is on a steady or severe downturn. I personally am in the process of divesting my dollar dominated assets to protect my self in the event of a dollar crash. I would recommend a book called Crash Proof: How to Profit From the Coming Economic Collapse by Peter D. Schiff for detailed information concerning the overall dollar situation.


news.yahoo.com
(visit the link for the full news article)

Maybe it is the end, but this has happened before at least once in my lifetime.

The currency is a two-edged sword.

A weak dollar actually helps some industries by making our goods and services more attractive to foriegn buyers and toursim can be boosted, as well.

The nation has survived much worse, I think, and will more than likely survive this.

The growing inicidence of Intra-Crainial Fecalistic Pseudo-Psychosis (The Kucinich Syndrome) among a certain demographic is more of a threat to national security, I think.

[edit on 2007/11/6 by GradyPhilpott]

Originally posted by GradyPhilpott
Maybe it is the end, but this has happened before at least once in my lifetime.
...

The nation has survived much worse, I think, and will more than likely survive this.

[edit on 2007/11/6 by GradyPhilpott]

Do you really think so? Has it happened like this?

During the last housing bust was the sub-prime mortgage market causing this much of a credit & write off crisis? Was the dollar fading this bad at the same time? Was oil at an all time high? Did all of this ever happen at the same time?

I know an RE Broker who has been through 3 cycles of the housing markets run up and crash, he survived. He confided in me he has never seen anything like this. Nothing this bad.

I just see too many things all hitting the fan at the same time, and due to the field I am in, watching people go under, more every day. No one knows what to do. The middle class IS in crisis from what I can see.

Has it truly ever been this bad?

I'm not an economist.

Things have never been quite like they are now.

But, if you think things are bad now, check this out.

On Thursday, October 24 1929, panic selling occurred as investors realized the stock boom had been an over inflated bubble. Margin investors were being decimated as every stock holder tried to liquidate, to no avail. Millionaire margin investors became bankrupt instantly, as the stock market crashed on October 28 th and 29 th. By November of 1929, the Dow sank from 400 to 145. In three days, the New York Stock Exchange erased over 5 billion dollars worth of share values! By the end of the 1929 stock market crash, 16 billion dollars had been shaved off stock capitalization.

To make matters worse, banks had invested their deposits in the stock market. Now that stocks were obliterated, the banks had lost their depositors money! Bank runs started, where bank patrons tried to withdraw their savings all at once. Major banks and brokerage houses became insolvent, adding more fuel to the bear market. The financial system was in shambles. Many bankrupt speculators, who were once aristocracy, commit suicide by jumping out of buildings. Even bank patrons who had not invested in shares became broke as $140 billion of depositor money disappeared and 10,000 banks failed.

www.stock-market-crash.net...

The Stock Market Crash of 1929

The Great Depression

Pictures of the Great Depression

The Dust Bowl

Pictures of the Dust Bowl


[edit on 2007/11/6 by GradyPhilpott]

reply to post by GradyPhilpott


Grady, our country may not be destroyed, but another depression doesn't seem irrelevant at this point.

I think it would take a lot of courage and hard work to fix what is wrong with the economy and our country in general. Our government has essentially been hijacked by those only interested in profit and do not care about anyone but themselves.

I don't know if there are many parallels to the great depression in regards to the greedy corporate profiteers, but I do know we won't find it easy to pull ourselves out of another depression.

As I recall, we weren't in nearly the same amount of debt as we are in now. #, we didn't owe the Chinese billions of dollars either.

Should be an interesting next couple of years.

Trillions in debt nationally. I don't think that's quite the same as banks going under.

We're up to 9 trillion dollars in debt.

The estimated population of the United States is 303,462,762
so each citizen's share of this debt is $29,931.19.

The National Debt has continued to increase an average of
$1.43 billion per day since September 29, 2006

National Debt and Savings clocks


[edit on 6-11-2007 by biggie smalls]

I just don't envision a total economic collapse or anything like that.

However, as I used to say about floods when I lived in New Orleans. If it's your house that has three feet of water in it, it's a major flood.

If you lose your job or your house or both, it's an economic disaster.

I'm not worried, however.

I try to be flexible and avoid material encumbrances, so I'm probably not a good barometer.

But, as I said before, I've seen a lot of economic distress in my lifetime and so far we've overcome it well.

If you happened to live in the oil patch during the eighties, you saw fortunes evaporate overnight almost. I have an uncle by marriage who lost millions.

People were warning of the end then, but here we are.

I was driving home tonight listening to NPR. They had a snippet about a women who lived on 1200 a month and had no Debt, giving out advice to everyone else. Stating that if she lost her job she would just find another cheap paying job. I laughed as I thought about what we as a nation think is important in our lives. Honestly if I had less money to spend, then I would just spend less money. Maybe even get myself out and about more, actually visiting some national parks or local ones.

If for some reason oil decides to skyrocket and I can't pay for fuel, then Ill have to buy a couple more blankets and maybe a space heater... People do that now right? Maybe using alternate means of transport if I had to.

I wake up each day and say 2 things to myself. How much is my time worth to me? Is my worth the same to somebody else willing to pay me. Normally you hear the echoes of the local highway trucks answering back. Usually my time is worth more to me then the next guy is willing to appreciate. I am sure we all have those moments and some of us dare to follow our hearts.

We want a strong future for our families and locals. Maybe its time to stop being so helpless and start making things happen for ourselves. Coming together as a community collective is a great start. Building coop farms or maybe growing your own food. It may not be fun but it really doesnt have to be hard.

[edit on 6-11-2007 by Here Now]

CATS & DOGS LIVING TOGETHER!!!!


MASS HYSTERIA!!!!!!!!!!!!

Originally posted by GradyPhilpott
A weak dollar actually helps some industries by making our goods and services more attractive to foriegn buyers and toursim can be boosted, as well.

Bingo! My Economics professor would be proud of you

If items cost less here than they did before, then wouldn't you buy them? China is one of our number one exporters because of the effect of the dollar's price, and also our number one importer of manufactured goods.

Thank you for cheap cameras now I could actually get the trip "free" going to the US and buy gear.

I will consider that

OCC Reports Derivatives Volume Tops $84 Trillion

This was in 2004! At a rise of $3 trillion per quarter.

This is very alarming. It gives more incentive
to trade the dollar for euros.

Comptroller of Currency Report

Derivatives are generally used to hedge risk, but can also be used for speculative purposes. For example, a European investor purchasing shares of an American company off of an American exchange (using American dollars to do so) would be exposed to exchange-rate risk while holding that stock. To hedge this risk, the investor could purchase currency futures to lock in a specified exchange rate for the future stock sale and currency conversion back into euros.
Source

[edit on 7-11-2007 by stompk]

I found this economist who predicted it very well.

U.S. dollar selling intensifies as the currency drops to fresh all - time lows against the euro (1.4370), record lows against oil ($91 per barrel), fresh 28-year lows against gold ( $ 778.55 per ounce), new 33-year lows against the Canadian dollar (95.95 cents) and new 23-year lows against the Aussie (91.47 cents). Increased certainty that the Federal Reserve unds rate will fall by at least 50 - basis points this year to 4.25% means that the dollar will be treated as a low yielding currency, specifically, due to the onset of further rate cuts in 2008. Thus, even if U.S. rates at 4.25% remain higher than those in the Euro zone (4.00%), Switzerland (2.75%), Japan (0.50%), it is the anticipation of further rate cuts that reinforces the depreciation of the greenback, especially as the deepening housing recession is expected to continue into 2008, translating into repercussions for employment, homeowner’s equity and consumer spending.

Source

With the Fed largely expected to reduce the Fed fund rates by 25-bps next week, the outcome will be double negative for U.S. stocks and the dollar, with the latter demanding a more aggressive easing and the latter losing its yield foundation.

The Fed refuses to make people take their medicine by increasing rates, as most of the worlds central banks have done...

Delaying the inevitable and will only make it much worse for more people than if they'd raised rates recently...

The longer they wait, the more people will be hurt...

That's a shame

Peace...

[edit on 7-11-2007 by Rilence]

Originally posted by Here Now
We want a strong future for our families and locals. Maybe its time to stop being so helpless and start making things happen for ourselves. Coming together as a community collective is a great start. Building coop farms or maybe growing your own food. It may not be fun but it really doesnt have to be hard.
[edit on 6-11-2007 by Here Now]

Well said "Here Now"! If you were in Europe, my advice would be to get enough like-minded people together to buy a castle and recreate the economic dynamics of a community that looks after itself first and foremost but not at the expense of its neighbours. I'm not joking...

The gleeful profiteering heaped upon the necessities of life - shelter in the form of homes and of course, food, can only lead to disaster. Chasing currency rather than quality of life creates a vicious circle. It will find its natural level though - after a major crisis.

The only comfort our US friends can take is that this credit crunch is not a purely US phenomenon. It's already affecting the little guy over in Europe too. So far the British government has bailed out Northern Rock Bank to the tune of £40 billion ($85 billion) in emergency loans ... and there's rumours flying about that other major financial players are seeking emergency funding too because they've been caught out with bad loans in the USA.

And when it gets to the stage that major well known banks are refusing to lend each other money, something has gone terribly wrong.

I'm not an economist. Far from it. Hate the subject. Makes my brain ache. But someone's mentioned here that a low dollar will make all us foreigners flock to the USA on vacations ... and that we'll each go home with cartloads of US made products.

Dream on. We visited Florida in July ... came back with clothes & various techy things ... blitzed the Walmart in Tampa one afternoon ... but next to nothing we bought was manufactured in the USA. I think the only thing we brought back made in the USA was a boxload of Hershey bars for the local kids in our village. And the other thing to consider is that it's not just US families who have maxxed out ... your average British family is struggling too with debt.

It's just down to us living way beyond our means. Sensible borrowing can be useful. Unless you're rich (most of us ain't) we all have to borrow to buy our homes. And borrow to buy a car which gets us to work.

But I know one family & they're a pretty typical British family and always complaining about how they're "struggling". They've had 3 vacations abroad this year. 3 cars in the driveway. Their 10y/o Son has .... an N64, a Dreamcast, a PS1, PS2, XBox, XBox360, Nintendo Wii, a PSP and one of those two screen Nintendo handhelds (the name of which escapes me) ... and for Christmas this year he's already getting a PS3 & a £500 laptop. In his bedroom he has a flatscreen tv, vcr & dvd player. Their daughter is similarly pampered. They're only 10 years old. Their parents maxxed out on their cards and juggle around with loans to pay for all that Chinese made crap. Many British families do exactly the same. And their US counterparts too.

It's utter madness. Borrowing money to buy Chinese crap. That's what it comes down to. No wonder the Chinese economy is booming and their businessmen are laughing their way to the bank. But we've all got the power to say "No". No-one needs the latest BluRay player or flat screen TV, no-one needs to change their car every year, no family needs to buy their kids the latest branded trainers ... which they'll grow out of within a few months anyway. If anyone's to blame for this credit crunch it's us ourselves and our totally unsustainable way of life.



[edit] *must learn how to spell florida*

[edit on 7/11/07 by Niall197]

reply to post by Niall197



That's an interesting post and probably largely true, however, when I say that America's goods will be more attractive to foreign buyers, I don't necessarily mean tourists who come to the US to raid WalMart.

Shopping at WalMart helps us, too, but I mean in terms of exports.

It is true that the US economy has shifted from goods to services, but we still do manufacture goods for sale abroad and they are likely to be more competitive with lower prices.

However, the problem discussed here is multi-faceted and probably more complex than anyone here is likely to be able to enumerate.

Clearly, the housing market is in trouble, the dollar is falling, and lending agencies are in trouble, and oil prices are going up, but the stock market is doing well, so there is some hope.

I noticed myself that the rise in oil prices lately hasn't been accompanied by the usual tales of woe like embargoes, natural disasters, or increased demand. Then I read a story that oil prices are being driven up by traders. That's not necessarily good news, but it's likely to be a transitory problem, unlike massive infrastructure damage.

newpaper.asia1.com.sg...


[edit on 2007/11/7 by GradyPhilpott]

Originally posted by GradyPhilpott
The currency is a two-edged sword.

A weak dollar actually helps some industries by making our goods and services more attractive to foriegn buyers and toursim can be boosted, as well.

That's right, a weak dollar does actually have some benefits. But people with an agenda will only see one side of an issue, the one they are trying to promote. In this case, it the "end of America" agenda.

The nation has survived much worse, I think, and will more than likely survive this.

True again. World War II comes to mind. The only thing that concerns me now is back then we didn't have such an active and vocal "third column" - the people in the U.S. actively promoting the downfall of their own country.

The growing inicidence of Intra-Crainial Fecalistic Pseudo-Psychosis (The Kucinich Syndrome) among a certain demographic is more of a threat to national security, I think.

[edit on 2007/11/6 by GradyPhilpott]

True, as well.

reply to post by Here Now


Mistake 1.....listening to NPR for economic or buisiness advice. Do your own reserach. There are tons of web sites out there. Listen to Bloomberg radio before ever listening to NPR for business advice. Even Jim Cramer offers better advice than anyone there.

there's always opportunity to make money even though the money might be worthless at some point in the future.

Don't be misguided, there are many people who trade currencies and alot of them have been making alot of money betting on the dollar's demise.