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The assumption that the Fed is politically biased towards getting the Republicans re-elected is a logical one, based on the fact that the Republican Party is primarily the party that represents the interests of big business, that is to say, even more than the Democrats, if that were possible.
"Attempts by many countries to keep their currencies undervalued could end up in a race to the bottom -- or in competitive devaluations -- that could be as disastrous for the world economy as the experience of the 1930s," UNCTAD warned.
It might be helpful to learn what the Sage of Omaha has done and is doing....anyone have a clue on this?
See above link. I think from my frequent posts on this subject, everyone knows my position. I agree with what you wrote entirely. I believe we are going to see the largest transfer of wealth the world has ever seen. I'm not an economist, but it doesn't take a rocket scientist to figure this out.A rise in protectionism, as stated in the article, to me means higher tariffs of imported US goods, which may spark a trade war with other countries doing similarly...
Anonymous wrote:MQ, Thanks for the Buffet posting. Great article. Even more ominous now since the deficits have only ballooned since then... We seem to agree on many things. I'll add a little dash of (un)reality on top of it, though.
If/when a collapse of the dollar, etc. occured, and Thriftville tries to "foreclose" on Squanderville "land", don't forget that Squanderville has the most awesome destructive capacity the world has ever seen. The IOU's and such are ignored, and economic and military domination is complete. For what is poor Thriftsville to do? Just try asking for your lunch money back from the school bully. I dare you.
Ayoob wrote:I still wonder whether I really understand about the trade deficit and what that means to me personally. What happens if the US redeems our treasuries by printing money? They can, right? That would mean massive inflation for a little while, and that people that don't own real estate would be screwed. Those that own would be OK to a certain extent. Is that right, or am I nuts? What happens to people in Germany and Poland if the US starts printing money like crazy? Do they just lose a little money in their US investments, or does this affect them personally in some other way?
Absolutely. Due to our huge trade and national debt, the dollar is falling anyway. If people move out of dollar denominated assets, it will push the dollar down further causing the FED to increase the money supply because the dollar will buy less. The return on US securities thus becomes less, and more move out, more printing, more inflation, higher interest rates= inflation spiral. Many central bankers see the writing on the wall, so to cut their losses they move to the euro. But to really save their butt, making the euro the currency of account would make all oil consuming nations target the EU for euros to buy oil, then EU securities that will fund EU growth and expansion. If the US wants to get in on the deal, they have to start producing something the world wants besides Disneyland. Become exporters, not importers. Fat chance, these days..so we will probability invade somebody instead, grab their wealth so we don't have to earn it. I dunno, sounds like a plan. I have no idea what they are up to, but it is no good. Massive transfer of wealth at the very least to the rich.Chicagoan wrote:Could this prediction be linked to the possibility of [url]Russia trading oil in Euros[/url]?
Fed and bond market on the rocks Why are yields falling even as Fed talks more rate hikes? By Gregory Robb & Rachel Koning
WASHINGTON (CBS.MW) -- In what may be the biggest celebrity breakup since J-Lo and Ben Affleck called it quits, it looks like the Federal Reserve and the bond market have decided to go their separate ways.
The growing estrangement has captivated Wall Street link
What do they know that we don't? Watch the dollar and "govt efforts" to deal with the trade deficit. Sounds like these bond traders are hedging their bets.September 16 – Dow Jones (Rob Wells): “A new report finds U.S. multinational corporations socked away profits of $149 billion in 18 tax havens in 2002, nearly double the level three years earlier. Tax Notes, an industry magazine, said in a report Monday the money is being funneled to Bermuda, Ireland, Luxembourg and Singapore instead of the U.S. Treasury. ‘That means those 18 tax havens were home to 58% of the foreign profits of those multinationals - a figure that far exceeds the share of economic activity that multinationals conduct in those low-tax countries," according to the report by Tax Notes correspondent Martin Sullivan.
Dollar Falls; Fed Raises Benchmark Rate, Says Inflation `Eased'
Sept. 21 (Bloomberg) -- The dollar fell by the most in six weeks against the euro after the Federal Reserve raised its benchmark interest rate by a quarter percentage point and said inflation has eased in recent months. ... Against the euro, the dollar dropped to $1.2335 at 4:30 p.m. in New York from $1.2176 yesterday, according to EBS, an electronic foreign-exchange dealing system. It fell to 109.68 yen from 109.90 yesterday ...
Declines in the dollar accelerated after the currency fell to $1.23 per euro, said Samarjit Shankar, director of global strategy for the foreign-exchange group in Boston at Mellon Financial Corp., which manages $625 billion.
"The $1.23 per euro level is a key level and the currency tanked after it crossed that mark,'' Shankar said. ``But the dollar will not weaken to $1.24 per euro. That would be too much of a decline and there's no fundamental reason supporting the euro at those levels.'' Shankar said he expects the dollar to rebound to $1.20 per euro by the end of the year. ...
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