"Pesofication" of the U.S. Dollar

I've dubbed this the "pesofication" of the U.S. dollar. But we're really talking here about the dollar's long-term demise. The pesofication of the dollar represents the end of the greenback as a major world currency and figures to be one of the major long-term challenges that we U.S. investors will face. The dollar's demise was set in motion several years ago. But the greenback's fate was sealed in late April, when U.S. Federal Reserve policymakers had a final chance to take a stand against inflation - and failed to do so. Let me explain ...

Source

I have long been lamenting the demise of the US dollar... maybe for selfish reasons as I live in Brazil, but work online for a US company and get paid in US dollars. The sad thing is that in the last decade I have seen my income decline to almost a 3rd of what it once was.

The bulk of this decline has come about in the last few years and it shows no sign of letting up... I have always been following the news looking for some kind of reassurance that it will not go on, ie the dollar will recover, and many "mainstream" media outlets seem to parrot this, but now - as with the story I have linked to, the warning signs are becoming more and more apparent...

Maybe it is time to look for a European company to work for... I have had 3 raised from my US company in 4 years and all they have done is adjust for the declining dollar... and now it is going down again... sigh!

Sounds like a good argument for a global currency.

That would certainly solve your problem.

reply to post by ParAvion


More info on the demise of the US dollar. It was done on purpose as a method of moving the wealth of an entire nation (actually an entire WORLD) in to the hands of a very few.


This is the best short explanation of Keynesian Economics, the economic model the Bankers have foisted off on the American people and others around the world.

The Irresponsibility of Ben Bernanke and How He Will Destroy the Dollar

...Federal Reserve Chairman Ben Bernanke’s Quantitative Easing approach is immoral, failed Keynesianism and harmful. ..... It is a deliberate but hidden default on government obligations. It steals from taxpayers because it is a hidden tax on income and wealth. In all of these respects, it is outright theft!

...All economists know the solution to unemployment is lower real wages.

All economists know the solution to unemployment is lower real wages. A central part of Keynes’ theory was the notion of money illusion. Keynes believed that workers would not accept nominal decreases in wages but that they could be fooled via inflation, a belief that only an elitist could have. If the cost of living goes up and wages stay the same, then real wages go down and presumably employment goes up (or down less than it otherwise would). Inflation, the critical tool in the Keynesian paradigm, has been used regularly. Since the formation of the Federal Reserve, the purchasing power of the dollar has fallen almost 96%.

Inflation, the critical tool in the Keynesian paradigm, has been used regularly. Since the formation of the Federal Reserve, the purchasing power of the dollar has fallen almost 96%.

Could Bernanke Spark a Run on the Dollar?

...QE2′s greatest shortcoming is that is really doesn’t create jobs as advertised. It’s just more supply side, “trickle down” monetary theory designed to goose the market while workers languish in unemployment lines. Here’s how the Wall Street journal’s Kelly Evans summed it up: ”…the limits of monetary policy are becoming clearer. History suggests any further easing probably would do too much for the stock market and asset prices, and too little for jobs.The only real fix is to lower the cost of U.S. workers relative to foreign rivals and machines, or else raise their bang for the buck. The latter, while clearly preferable, requires education and training that won’t turn things around overnight.” (“The Fed’s Magic Show Appears to Be Over”, Wall Street Journal)

In other words, the Fed is planning to give every working man and woman in the US a big pay-cut so they can go nose-to-nose with foreign labor.

You can see how this blends seamlessly with Obama’s State of the Union Speech where he focused on “competition” as his central theme. More importantly, Obama reiterated his pledge to double exports in the next 5 years. The only way that can be achieved is by destroying the dollar.

This is how the poorly educated Americans are being replaced in their own country!

A substantial share of the highly educated migrants to the U.S. come from China and India. Though only about one in 10 new arrivals is from one of these countries, they make up 28 percent of college-educated new arrivals. Almost half of these migrants arrived in the last decade, and one in four came in just the last five years....

The key conclusion of this paper is that Chinese and Indian knowledge workers are good for the regional economy. Industries that face competition from firms in other parts of the country benefit from having more of the available knowledge workers locate in this region, rather than elsewhere—most notably California. Furthermore, if the U.S. were to put tighter restrictions on the number if knowledge workers allowed to enter the country, the jobs they currently fill would more than likely migrate to where those workers are—places like Shanghai and Bangalore......

Though the U.S. census of population does not report the source of an individual’s education, it is generally believed that most of the Chinese and Indians with doctorates working
in the U.S. attended graduate school here.....

TABLE 4
Top industries of Chinese college graduates
Industry............................ Share (%)
Universities............................. 9.7
Finance....................................6.2
Hospitals ................................ 5.2
Computer systems design........4.9
Banking...................................4.2
Pharmaceuticals .....................4.0
Schools ...................................2.7
Insurance.................................2.4
Nondepository credit ..............2.3
Scientific R&D.........................2.3
Wired telecom .........................2.0
Doctors’ offices........................1.9
Engineering services ................1.9
Technical consulting ................1.7
Restaurants ...............................1.7
Bookkeeping/payroll ................1.5
Source: American Communities Survey, 2005. Numbers are the percentage of Chinese college graduates in the region who are employed in each industry.

TABLE 5
Top industries of Indian college graduates
Industry.........................................Share (%)
Computer systems design................9.4
Hospitals.........................................8.6
Universities .....................................4.9
Finance...........................................4.8
Doctors’ offices...............................3.8
Banking..........................................3.7
Restaurants....................................2.5
Insurance ......................................2.2
Pharmaceuticals ...........................2.1
Technical consulting......................2.1
Schools..........................................2.0
Engineering services.....................1.9
Groceries.......................................1.7
Taxis..............................................1.6
Real estate....................................1.5
Source: American Communities Survey, 2005. Numbers are the percentage of Indian college graduates in the region who are employed in each industry.


.....One out of 10 Chinese workers is employed at a university (9.7 percent), while
roughly the same share of Indians (9.4 percent) is employed in computer systems design. In
both cases, the share of the other nationality employed in the industry is 4.9 percent.

TABLE 8 [I removed individual # from chart and show only combined]
Chinese and Indian college graduates as a share of employment in the region (by industry)
Industry..........................Chinese or Indian (%)
Software publishing........................12.1
Computer systems design................12.1
Pharmaceutical............................... 7.4
Apparel and fabric.......................... 7.3
Computer equipment.......................7.2
Scientific R&D................................6.0
.
.

Source: American Communities Survey, 2005. Numbers are the percentage of employees in the industry who are of the specified national origin.

TABLE 9
Chinese and Indian college graduates as a share of employment in the region (by occupation)
Occupation ............................... Chinese or Indian (%)
Medical scientist ....................................26.5
Computer software engineer...................22.2
Health diagnosing and treating..............18.5
Mathematical scientist ...........................18.2
Chemist and materials scientist .............17.7
Physical scientist....................................16.9
Database administrator..........................15.8
Computer hardware engineer..................14.9
Computer scientist...................................13.4
Physician..................................................13.2
Natural sciences manager.......................11.8
Biology technician...................................11.8
Computer programmer............................10.5
Chemical engineer.....................................8.4
Engineer (misc.)........................................8.4
Credit analys.............................................8.2
Biologist ...................................................8.1
Network systems analyst..........................7.3
Clinical lab technician...............................6.9
Computer systems technician.................... 6.8

Source: American Communities Survey, 2005. Numbers are the percentage of employees in the occupation who are of the specified national origin..... www.econ.brown.edu...

reply to post by ParAvion


What did you expect, really? Unabashed printing leads to 1) currency devaluation 2) inflation (which is still devaluation in a more extreme form) 3) both

And it would be foolish for investors to buy dollars now. It's like suicide.

Yea, that will be the biggest wake up call for Americans. I've been thinking about this for the last couple weeks. Dwelling on it if you will. What will that day be like when Joe Schmoe wakes up to the news that his 40k salary isn't worth 4 Euros. Will Joe go to work that day? Will Joe lose his cool? What will Joe do? Everybody that gets paid in US dollars is Joe. I just feel bad for Joe. None of the news regarding US currency paints a pretty picture of the future. The question is just when.

You all are sucked into the illusion of it all.

The elite get power by living on the profit or margin of a society. Not by having more money. The money is only relevant when "times are good". Its more about power than money.

The USA is being shutdown for business as far as they are concerned. The only way they can work their magic, is if the a society is generating growth. Everyone knows what "fractional reserve banking" means, but they dont understand its implications. The USA has died in terms of growth, hence no margin to feed off of like a vampire.

So there is an understandable pause in the world economy while they set up their power structures in other countries. Countries that lack roads and cars, but have human resources,i.e. slaves. The chinese guy builds a road, puts his check in the bank, and takes out a loan to buy a car to drive on said road. The whole process begins again.

Its not the dollar thats dying, its the USA.

I've commented a few times about "normalizing" our currency.
No one will like it when it happens but purchasing power won't change: what cost $3 will soon cost $0.30, what cost $30 will soon cost $3.00.

People didn't notice inflation, when gasoline was $0.50, houses were $20,000 and wages were $1.00... and now gasoline is 8 times higher, houses are 8 times higher and wages are 8 times higher.

NOTHING HAS CHANGED other than costs have risen and the value of your dollar has dropped accordingly.

Oh, and a higher percentage of people are unemployed now than under either "Bush", Reagan and even Clinton.... And I take exception to Clinton because my rent and fuel costs jumped up almost double when Clinton was elected.

Yeah, this is racist, if you believe he is "black"; it's not racist when you realize he's 1/2 "caucasian" too.
Unemployment under the first "Black" president of the US (he is 1/2 white too, 'member that?), the "real" numbers including those that have given up on looking for jobs and those no longer able to receive unemployment benefits... THIS is the highest since the "Great Depression", Way to go Democrats!!!

reply to post by ParAvion


Easier solution .. if we need to compete with foriegn labor, because they use slave labor.. it would seem logical to stop all free trade with every country, and slap a big ass tariff on any country that doesn't pay "fair wages".

I know.. I know.. poor corporations would see a drop in revenue. Boo effing hoo.

The free trade, which eventually led to the massive negative trade balances only really started in earnest in 1995. Since 1995 it's been like falling free fall off a cliff.. and since 1995 the US Dollar has lost over 50% of it's value, we have seen massive economic bubbles, two recession and in the midst of the Second Great Depression.

If we were smart folks, which we aren't, we would view that as Treason plain and simple.

Originally posted by Bobaganoosh
Yea, that will be the biggest wake up call for Americans. I've been thinking about this for the last couple weeks. Dwelling on it if you will. What will that day be like when Joe Schmoe wakes up to the news that his 40k salary isn't worth 4 Euros. Will Joe go to work that day? Will Joe lose his cool? What will Joe do? Everybody that gets paid in US dollars is Joe. I just feel bad for Joe. None of the news regarding US currency paints a pretty picture of the future. The question is just when.

This is why i have gold and silver in my save and convert USD into it every month

reply to post by crimvelvet


I never understood the hiring of professors that didn't speak clear English to teach subjects that don't necessarily benefit from having a ... foreign teacher? Like for instance Chinese.. it'd be nice to learn Mandarin from someone native to that country, yes?

I had an American History Professor from China that I had to drop after 3 weeks .. couldn't understand a single thing she said. Nice person, I'm sure, never understood enough to know.. but it seemed counter productive. I can only assume one thing in regards to universities:

Foreign workers work for less, yes.. but more importantly don't understand or care whether or not they get Tenure.

Anyways.. excepting that number of foreign nationals into well educated positions only further that our Government only cares about corporate profit.. not Americans.

(Another interesting statistic is that there was an equal number of Asian, mostly Chinese, Korean and Indian, than there were Hispanics. Only more educated and taking higher paying jobs)