THE US Dollar Thread (merged)

by **MonteQuest** » Sat 18 Sep 2004, 03:29:48

Chicagoan wrote:Could this prediction be linked to the possibility of [url]Russia trading oil in Euros[/url]?

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.

by **skiwi** » Sat 18 Sep 2004, 23:30:39

Who knows what really goes on behind the scenes :?:

I'm sure it's all above board and nothing for the sheeple to worry about :roll:

ARNOLD & BUFFETT's LOADED ELEPHANT GUN? Buffett's Back, with the Terminator! Reported By: Reuters Tues, 24 Sep 2002
WADDESDON MANOR, England (Reuters) - The world's second-richest man dropped into the English countryside with the Terminator at his side on Monday, a day after warning the UK's corporate big game his elephant gun was loaded.
Billionaire Warren Buffett and mean machine Arnold Schwarzenegger touched down by helicopter on the immaculate lawns of Waddesdon manor, a Renaissance-style chateau in the undulating hills of Buckinghamshire. Buffett, 72, is guest of honor at a closed two-day meeting of some of the world's most powerful businessmen and financiers -- the ultimate networking opportunity.

The get-together in the ancestral home of the Rothschild banking family will discuss economic and political issues, the organizers said. But Buffett's remark, made in a weekend newspaper interview, that he is looking for a "big deal" in Britain has stolen the agenda. "We are hunting the elephant... We have got an elephant gun and it's loaded," Buffett told the Sunday Telegraph. Among those invited to Waddesdon Manor were the likes of James Wolfensohn, president of the World Bank, Jorma Ollila, chief executive of Nokia and De Beers chairman Nicky Oppenheimer.

Schwarzenegger was on the guestlist as a celebrity customer of the conference sponsor NetJets Inc, a private jets business owned by Buffett's Berkshire Hathaway Inc.. This year's stock market carnage is made for Buffett, the billionaire Oracle of Omaha, Nebraska. A godsend for firms who need cash quickly, he has more than $7 billion in cash on hand, and can set-up iron-clad deals in a day. His philosophy is simple: "Work out how much it will pay out from now until Judgement Day, then discount it back and buy it cheaper," he told shareholders at his annual meeting in May, when asked for the secret of his success.

A procession of black cars with darkened windows swept up the drive of the 120-year-old English country house amid tight but discreet security. A group of photographers captured the moment when Buffett and Schwarzenegger, resplendent in steel-tipped cowboy boots, stepped onto Waddesdon's freshly cut lawn to be greeted by Lord Jacob Rothschild. "It's very nice of you to host this," Schwarzenegger said.

For the UK company in Buffett's sights, it may well be hasta la vista, baby.

by **Guest** » Mon 20 Sep 2004, 21:44:29

MQ -What do you make of this article:

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

My rudimentary understanding of the key questions raised in this article about why bonds are rallying, yields are low, is that investors believe the economy is going to tank. The only thing I can get to make sense is that investors believe that these rate hikes are only temporary. The real bad news is yet to come, and they seek the greater safety of bonds, even at these very low yields. This is why this author can't figure it out.

From my point of view, the Fed is in quite a pickle. Because of higher energy and food costs and those dangers, that will only fuel inflation. So the Fed can't accelerate it by raising rates too much, but they'll also be pressured into raising rates to maintain the extremely high levels of foreign investment in Treasuries, etc. Further fueling the fire is the coming liquidity crisis where they will be undoubtedly have to increase the money supply, by, as you know, printing more moeny. But, they will also be pressured to hold or lower rates, because of the impending large stock correction, and the coming crisis of the deficits coming home to roost!

So the bond market seems to be saying: "Even 4% over 10 years is better than what's going to be coming around the corner damn soon!" Do I about have it right? Click around the links on this article and tell me what you think.

by **MonteQuest** » Mon 20 Sep 2004, 22:55:59

My understanding of the bond market is limited, but one could say that dollar denominated US Securities are getting real iffy. There is something afoot. I a big decline in the dollar seems to be in the offing. The other thing is what I have been saying since I started posting; FED stimulus/retraction does not seem to work anymore, so why pay attention to what they say or do?

If the dollar tanks, interest rates will rise to curb the inflation caused by the increase in the money supply. The huge housing bubble will burst, and inflation may run away. 80% of the world's savings are tied up in US securities. If the dollar tanks, they will move out of them into gold or the euro or yen or yuan. Yikes!

Then I find articles like this:

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.

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.

by **Guest** » Tue 21 Sep 2004, 16:43:22

Get this:

link
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. ...

I don't believe in the Fed's optimism regarding inflationary aspects.
Starting from historically low federal funds rate (you have to ask yourself: 1%.....that's free money and then some!...with "inflation" as selectively measuerd at about 3%.) And THIS is all the economy could muster?

The dollar against the Euro goes from about $0.80 to $1.23 in three years, and no one sees a trend? Look for the dollar to fall even more by the begiinnig of next year.. Oh, and I love the analyst who thinks that there is no "fundamental reason" why the dollar will fall below $1.24....Ummm....let me see....

How about the largest current accounts deficit and trade deficit in history that just keeps getting bigger? How about the fact that about 50% of all US debt is now foreign-owned....how about the fact that there is likely a significant shift to the petro-euro? How about the fact that the yearly deficit AND the total debt (HOWEVER measured!...with the unfunded SS/Medicate liabilties, pensions, etc.) is at a record high...personal savings down to a record low....personal debt at a record high...true net job loss for the past three years, spending fueled by a soon to be deflated housing bubble - (home equity loans)...historic highs on per capita taxes...and so much more. (see Granfather Economic Report on the web for more cool information and graphs).

No one likes the messenger or reminder of bad news, though. So sorry to pee on your parade, but ignoring it won't make it go away. My oh my, won't everyone be so surprised! "We never thought it would happen!"

I don't the the collapse fot the dollar, in the near term, will be as severe as Weimar Germany, (requiring barrowfuls of cash) as more than likely I foresee a manageed collapse for a variety of reasons, but imagine what just a 40% decline in the value of the dollar would bring over two or three years (1.23 to $1.72), if it happens, that $32,000/yr job now just bought the same things as a $19,200 year job... No wonder the founding fathers made debasement of currency illegal and punishable by death! Bring back the silver standard!!!

by **MonteQuest** » Tue 21 Sep 2004, 18:56:21

Starting from historically low federal funds rate (you have to ask yourself: 1%.....that's free money and then some!...with "inflation" as selectively measuerd at about 3%.) And THIS is all the economy could muster?

The dollar against the Euro goes from about $0.80 to $1.23 in three years, and no one sees a trend? Look for the dollar to fall even more by the begiinnig of next year..

Oh, and I love the analyst who thinks that there is no "fundamental reason" why the dollar will fall below $1.24....Ummm....let me see....

How about the largest current accounts deficit and trade deficit in history that just keeps getting bigger? How about the fact that about 50% of all US debt is now foreign-owned....how about the fact that there is likely a significant shift to the petro-euro? How about the fact that the yearly deficit AND the total debt (HOWEVER measured!...with the unfunded SS/Medicate liabilties, pensions, etc.) is at a record high...personal savings down to a record low....personal debt at a record high...true net job loss for the past three years...spending fueled by a soon to be deflated housing bubble - (home equity loans)...historic highs on per capita taxes...and so much more...(see Granfather Economic Report on the web for more cool information and graphs).

Ah yes, I see you get it too. If you read my posts, you will see that this is what I have been saying as well. I don't think the FED can stimulate the economy any more. If all this deficit spending, tax cuts, and unheard of interst rates won't jump it, nothing will. I'm looking for a transfer of this debt to the third world.

by **Guest** » Tue 21 Sep 2004, 19:28:21

If all this deficit spending, tax cuts, and unheard of interst rates won't jump it, nothing will. I'm looking for a transfer of this debt to the third world.

So true. Not clear on this, though: How could debt be transferred to the third world? If the holders of US debt, Japan, China, Western Europe, Saudi, etc. see a drastic fall in the dollar, seek the relative safety of other currencies, etc., and all that we mentioned, how does the IMF and other global institutions come into play with this debt? Third-worlders get screwed as oil prices rise of course, but how do they take on the debt you are speaking of?

We are already "exporting demand" (in oil) to developing countries, we know. This means that the large manufacturing base that requires lots of oil/oil products goes to China, India, etc., hence "exporting" demand for oil since, they then export and we import these goods to consume. Hence, we get the goods, and we reduce oil demand, by making others do it for us.

by **MonteQuest** » Tue 21 Sep 2004, 19:53:46

Anonymous wrote:
If all this deficit spending, tax cuts, and unheard of interst rates won't jump it, nothing will. I'm looking for a transfer of this debt to the third world.
So true. Not clear on this, though: How could debt be transferred to the third world? If the holders of US debt, Japan, China, Western Europe, Saudi, etc. see a drastic fall in the dollar, seek the relative safety of other currencies, etc., and all that we mentioned, how does the IMF and other global institutions come into play with this debt? Third-worlders get screwed as oil prices rise of course, but how do they take on the debt you are speaking of? We are already "exporting demand" (in oil) to developing countries, we know. This means that the large manufacturing base that requires lots of oil/oil products goes to China, India, etc., hence "exporting" demand for oil since, they then export and we import these goods to consume. Hence, we get the goods, and we reduce oil demand, by making others do it for us.

Here's what I have been watching and studying. I don't have a total handle on it yet. Sitting atop the global debt-based pyramid, America must constantly fractionalize increasing larger sums into currency in order to maintain timely payments of interest and must additionally offload unpayable debt. To do so, the U.S. may package unpayable debt into SDR’s (Special Drawing Rights) that the U.S.-owned IMF makes available via various criteria. In exchange for assuming unpayable U.S. debt, recipient nations receive, via various trade agreements, guaranteed access to the U.S. market.

Warren Buffet is suggesting that we issue Import Certificates (ICs) to all U.S. exporters in an amount equal to the dollar value of their exports. Each exporter would, in turn, sell the ICs to parties -- either exporters abroad or importers here -- wanting to get goods into the U.S. To import $1 million of goods, for example, an importer would need ICs that were the byproduct of $1 million of exports. The inevitable result: trade balance. link Something is in the works.

by **MonteQuest** » Tue 21 Sep 2004, 19:56:38

PS....In the case of the latter, I can see those IC's being traded on the market. More investment in the US!

by **Guest** » Tue 21 Sep 2004, 21:20:17

I am familiar with Buffet's IC idea...just isn't going to happen unless he runs for president and gets elected!

by **MonteQuest** » Wed 22 Sep 2004, 22:52:21

I did a liitle checking on bonds. It would seem that the Asian central banks aren't buying U.S. government bonds for investment purposes; they're buying for mercantilist purposes. By buying dollars and dollar-denominated assets like Treasury bonds, they help keep their currencies relatively weaker and the dollar relatively stronger. And by providing a ready market for our government's chief product, they've helped keep U.S. interest rates low. That keeps politicians happy and enables American companies and consumers to do what they do best: borrow tons of money at favorable rates and spend it.

In 2002, non-Americans accounted for about half of net purchases of Treasury securities. But in the first quarter of 2004 they accounted for 150 percent! That is—the rest of the world bought a net $679.8 billion in Treasury securities while U.S. brokers and dealers sold a net $202.7 billion. As interest rates rise, smart investors tend to flee bonds. But the foreigners are still buying despite rising rates. In theory, there's something dangerous about this increased reliance on foreign creditors. They have a call on our national savings. And if the Japanese and Chinese central banks suddenly decide to stop buying—for political or economic reasons—we could be in for a nasty shock.

by **Carlhole** » Sun 24 Oct 2004, 14:58:52

I've always been most wary of the collapse of the Petrodollar system as most dangerous to our current lifestyle. I think one of the reasons we went to Iraq was to prop up this increasingly tenuous currency system.

Foreigners do not like having to denominate their oil purchases in dollars. If they were to rebel and start buying oil in euros or, say, a basket of currencies instead of the dollar, the dollar would collapse and the US would instantly revert to third world economic status. A scenario like that could lead to WWIII. That is why, we have spent so much on our military; because we can no longer control the rest of the world economically.

Today, I found this thread at RumourMill News. I don't believe everything I read but this is the sort of thing that makes my ears perk up. link

by **chris-h** » Sun 24 Oct 2004, 15:13:44

Thisv is the original article

http://www.lebanonwire.com/0410/04102002LW.asp

by **some_guy282** » Sun 24 Oct 2004, 15:21:29

I remember FTW posting an article about this sometime back in early September or late August...that Iran might be attacked before the election. Let's hope it doesn't happen.

by **chris-h** » Sun 24 Oct 2004, 15:32:12

If it does happen oil will go to $200.And a draft will happen after the elections.

by **zed** » Sun 24 Oct 2004, 16:03:20

I've seen Wayne Madsen's articles on various sites and consider him a credible source. This really scares the hell out of me because I can honestly believe Bush/Cheyney would go for it...

by **Grimnir** » Sun 24 Oct 2004, 17:15:43

I don't believe an attack on Iran would help Bush's popularity: a) it would be viewed as a blatant political maneuver, b) people already believe or suspect that the Iraq war was a sham, they're not going to buy another "they have weapons of mass destruction!" (even though it's probably true this time), c) It would rekindle draft fears.

If anything, he has plans to attack immediately after the election.

Plus, I have to ask, if Bush is so dishonest and so sinister that he would do something like this, why didn't he plant WMD's in Iraq? I wouldn't vote for the man in a million years, but I have trouble believing he's as evil as this article makes him out to be.

by **leal** » Sun 24 Oct 2004, 17:39:38

The dollar rate seams to slide:
http://quote.bloomberg.com/apps/news?pi ... news_index

Foreigners added to their holdings of U.S. securities at the slowest pace in 10 months in August, eroding demand for the dollar.

by **tdrive** » Sun 24 Oct 2004, 18:24:50

The dollar rate seams to slide:

Dollar is sliding against everything as we speak. The largest drop is against the Swiss franc and Evro. Freaky halloween.

Cheers,

by **zed** » Sun 24 Oct 2004, 20:33:38

Grimnir: Michael Ruppert's recently released book "Crossing the Rubicon" presents very convincing evidence that the Bush administration engineered 9-11 to facilitate the conquest of the Middle East's oil reserves.

Given how much the country supported Dubya after 9-11 it would really help his poll numbers if a similar attack (appearing to come from Iran?) was launched before the election. Considering most foreign intelligence agencies (Russia, Israel, Germany, etc) knew something was up before 9-11, it doesn't surprise me that they would smell another such operation ahead of time. However this time instead of standing by they may be actively interfering in world capital markets. Very scary to think about..

THE US Dollar Thread (merged)

MASSIVE SELL OFF OF US DOLLAR: PRELUDE TO AN ATTACK??

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