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Post by Jaga on Dec 23, 2007 23:49:20 GMT -7
I wonder whether this is one of the most important symptoms of the fall of the empire...The sharp decline of the U.S. dollar since 2000 is affecting a broad swath of the world's population, with its drop on global markets being blamed at least in part for misfortunes as diverse as labor strikes in the Middle East, lost jobs in Europe and the end of an era of globe-trotting rich Americans. It marks a shift for Americans in the global economy. In times of strength, a mightier dollar allowed Americans to feed their insatiable appetite for foreign goods at cheap prices while providing Yankees abroad with virtually unrivaled economic clout. But now, as the United States struggles to fend off a recession, observers say the less lofty dollar is having both a tangible and intangible diminishing effect. "The dollar was the dominant force in world economics for 100 years -- we had no competition," said C. Fred Bergsten, an American economist and director of the Washington-based Peterson Institute for International Economics. "There was no other economy close to the size of the United States. But all that is now changing." The dollar is down more than 40 percent against the euro over the past seven years, taking a particularly sharp drop last month. Despite a bit of a rebound in recent weeks, the dollar is still off nearly 12 percent since Jan. 11, when it hit its peak for 2007. ... www.washingtonpost.com/wp-dyn/content/article/2007/12/23/AR2007122302441.html?hpid=topnews
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Post by Jaga on Dec 23, 2007 23:52:17 GMT -7
Nowhere is that more visible than with Americans overseas. "It's changed our lifestyle," said Lauren Amlani, 48, who moved to Paris from California with her husband and young son in March 2006. "A meal with pizza and drinks for the three of us comes to over $75. That's ridiculous!"
...
The dramatic surge in oil revenue along with the weakening dollar has sparked a rise in inflation in the Gulf states -- hurting most those who have the least. In recent months, it has wiped out much of the gains from years of hard labor for the thousands of South Asian workers who moved to Dubai for a piece of its multibillion-dollar construction boom. With employers slow to raise salaries as low as $109 a month, workers' savings have diminished in buying power as costs have jumped for vegetables, cooking gas and other essentials. This has triggered wage strikes and a rock-throwing protest this fall that set back construction of the 150-story Burj Dubai, planned to be the world's tallest building. ... But now, some in China are turning their noses up at the dollar. Lin Jing, a sales manager at Shanghai Shuangyuan Import & Export Co., which exports garlic oil, said the company has begun to demand euros from its overseas customers instead of dollars. "The use of euros enables us to shy away from losses caused by the conversion between the [Chinese currency] and the weakened dollar," he said.
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Post by kaima on Dec 24, 2007 8:25:32 GMT -7
The world will have to switch to the Euro or a new unit in place of the dollar. The transition for the US will be rather difficult. Perhaps the transition to a lower standard of living will get a good start in my lifetime. It is sad to see. I never imagined anyone would run our eonomy into the ground so quickly with debt and careless policies.
In this vicinity is a village with a lot of returned Slovak-Americans who built in a branch of town. The locals refer to it as "New Jersey". There is another village with a Gypsy center that they call "Mexico".
Kai
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Post by troubledgoodangel on Dec 24, 2007 12:49:15 GMT -7
The article "Dollar's Fall Is Felt Around the Globe" says it all. But I will write about the dollar tomorrow, for today on Christmas Night we must think the Lord, not the Dollar! I am on my way to the Midnight Mass (Pasterka). The area where I live there is no church, so the Mass will be on open air, right in the snow, with several degrees Celsius below. Scary, but also evocative of how the Lord was freezing in the manger. When the Lord was born in Bethlehem, the hope was also born that the things will be better for the downtrodden. Two thousand years later, we still have no church where to worship. But we must believe that God is in control, and that the world is getting better, not worse, and that our economic worries will somehow go away next year. This is my Christmas wish for all!
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Post by freetobe on Dec 24, 2007 18:22:07 GMT -7
TGA, Will pray for sanity by nations in 2008. God Bless
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Post by troubledgoodangel on Dec 25, 2007 11:38:56 GMT -7
Thanks to Anthony Faiola we are beginning to realize the horrendous consequences of dollar's fall, kept secret hereto by the industrial, political, and financial establishments and sectors which benefit from the dollar's fall, whether by producing cheaply in China, or by selling more of their American products abroad. The consequences of dollar's fall go well beyond market forces: here we are talking about the welfare of peoples throughout the world! Billions of human beings are already being affected by the weakening dollar! But let me limit myself to the thousands of Americans on disability benefits of 8,600 dollars a year living in Europe, in the euro zone. If their benefits aren't raised dramatically soon these unfortunate U.S. citizens will be starving, as some already are because of the gasoline price, which in countries like Poland has surpassed $7 a gallon! While I give credit to Mr. Faiola for speaking on the issue of the dollar, I am surprised that he ignored the plight of the Americans in Europe! The dollar's fall has many multiple causes, one of them being the America's utopic attempts to be more competitive on the world's markets. I say utopic because, even if China adopted the U.S. dollar as its currency, or even the euro, China would still be more competitive than the U.S. given its cheap labor ... and this will soon be true of the European Union, which has over 400 million skilled inhabitants! We are rightly "desperate," but we remain monumentally misguided! If America cannot compete with China and Europe under the current arrangements, other ways must be found to compete, like for instance rewriting the market laws. America didn't go to China ... to lose world markets ... to China! That was the last thing on the mind of the planners! Now something need to be done! Otherwise, we are in a very deep quandry, and we will soon be sliding toward another American Revolution, fighting to preserve our freedoms on the streets, in the forests, and on the beaches, like during the D-Day!
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Post by Jaga on Feb 19, 2008 0:33:48 GMT -7
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nathanael
Cosmopolitan
: “Die Wahrheit macht frei und ist das Fundament der Einheit (John Paul II)
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Post by nathanael on Feb 20, 2008 14:38:18 GMT -7
Today I bought a pint of motor oil in Poland, at the cost of 15 dollars (36 z³otych) and ten gallons of gasoline for 80 dollars (8 dollars a gallon), for 170 z³otych). This is an example of what dollar fall is doing to Americans living in Europe! Many American tourists can't even afford a tram in Cracow! This is the consequence of globalism! If GDP is the value of all goods and services produced in the United States, if it is the best barometer of a country's economic fitness, and given that a substantial number of goods and services is no longer produced here (and in the West), under globalism, then one doesn't have to be an economist to see that globalism, which has moved production and services abroad, will be the last nail in America's economic growth (GDP) coffin ... and Western economic coffin ... with the former Communist nations taking our place! One wonders where people like Bernanke went to school!
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nathanael
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: “Die Wahrheit macht frei und ist das Fundament der Einheit (John Paul II)
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Post by nathanael on Mar 5, 2008 4:42:05 GMT -7
The latest news in Poland is that the dollar has fallen to about 2,30 zlotych, and that it is heading below 2.00 (a single oil change, today, costs about 400 zlotych in Cracow!). Just imagine, it's almost 200 dollars! This means a potential Economic Armageddon for millions of Americans, at home and abroad, who live on a 765 dollars monthly Social Security check! The prediction is that the dollar will continue to fall. Mr. Bush keeps saying that "economy's fundamentals are sound." His, may be: some say that he has amassed a trillion dollar fortune on oil business! But the American economy is a different story! The Economic Armageddon will be fully realized when the dollar is either reduced to one cent, or obliterated altogether! I have heard that already the wealthy Americans are switching to gold massively for that purpose. I also heard that globalism was born "to avoid financing healthcare in the U.S."! That was the primary reason why the corporations moved to China! The poor, useless to say, won't have the option to switch to gold, when the dollar is no more! They won't be able to buy gold at all! That will mean that millions of elderly Americans on Social Security will die when dollar falls! This is what rich-getting-richer- globalism is doing to America! I call it "Armageddon" because it is a global conspiracy to do away with the poor in the world!
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Post by rdywenur on Mar 5, 2008 7:02:39 GMT -7
I don't know about that Nathaniel. When I see all the people from the Ghetto wearing heavy gold chains and jewelry I am wondering where that comes from and why they aren't putting the cost of those things in the bank instead of around their necks. Or is bling more important than food and housing to them.
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Post by Jaga on Mar 5, 2008 9:55:23 GMT -7
The latest news in Poland is that the dollar has fallen to about 2,30 zlotych, and that it is heading below 2.00 (a single oil change, today, costs about 400 zlotych in Cracow!) Nathanael, dollar low value worries me. Unfortunately nobody can blame Clinton on it, but nobody wants to blame the current president Bush, the war and high deficite for it. I would not worry about converting dollar to gold, just buy some euro, they are strong!
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nathanael
Cosmopolitan
: “Die Wahrheit macht frei und ist das Fundament der Einheit (John Paul II)
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Post by nathanael on Mar 5, 2008 11:13:35 GMT -7
Indeed, many presumed "poor" are in fact rich. The beggar that asks me for money at Madonna Na Piasku often smiles, and when he does, I can see he has several gold teeth which I couldn't afford. Still, he looks so miserable, that I sometimes give him my last coins. I am not sure which "Ghetto" Rdywenur refers to, and what "bling," - perhaps she means "blink." On a more serious note, I suspect that most Americans have no clue why there is at times so much fatalism in my posts, and gloom and doom. The reason is simple: there is not a single morning that the dollar doesn't drop! Each each day that passes, the buying power of my Social Security check is less in Poland! As far as Jaga's statement, I know so little about politics and economy that I am afraid to comment. I tend to blame globalism and not the war for our woes. Did not U.S. become a Superpower after world War II? How is it that that war did not cause economic collapse? Just a thought. And now, is not Iraq paying us for this "intervention" in oil? I grant that the war expenditures had contributed to the present debt. But it seems to me that the real problem started when our GNP ceased to grow and reflect a healthy economy! This had a negative psychological effect on the dollar, and we know the rest of the story. I just hope that Sen. McCain, if he wins, brings brighter economists into his cabinet, starting tomorrow, preferably from abroad, for the economists we have, as far as I am concerned, are brain-dead!
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Post by kaima on Mar 6, 2008 10:19:18 GMT -7
The $2 Trillion Nightmare
By BOB HERBERT Published: March 4, 2008
We’ve been hearing a lot about “Saturday Night Live” and the fun it has been having with the presidential race. But hardly a whisper has been heard about a Congressional hearing in Washington last week on a topic that could have been drawn, in all its tragic monstrosity, from the theater of the absurd.
The war in Iraq will ultimately cost U.S. taxpayers not hundreds of billions of dollars, but an astonishing $2 trillion, and perhaps more. There has been very little in the way of public conversation, even in the presidential campaigns, about the consequences of these costs, which are like a cancer inside the American economy.
On Thursday, the Joint Economic Committee, chaired by Senator Chuck Schumer, conducted a public examination of the costs of the war. The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.
Both men talked about large opportunities lost because of the money poured into the war. “For a fraction of the cost of this war,” said Mr. Stiglitz, “we could have put Social Security on a sound footing for the next half-century or more.”
Mr. Hormats mentioned Social Security and Medicare, saying that both could have been put “on a more sustainable basis.” And he cited the committee’s own calculations from last fall that showed that the money spent on the war each day is enough to enroll an additional 58,000 children in Head Start for a year, or make a year of college affordable for 160,000 low-income students through Pell Grants, or pay the annual salaries of nearly 11,000 additional border patrol agents or 14,000 more police officers.
What we’re getting instead is the stuff of nightmares. Mr. Stiglitz, a professor at Columbia, has been working with a colleague at Harvard, Linda Bilmes, to document, among other things, some of the less obvious costs of the war. These include the obligation to provide health care and disability benefits for returning veterans. Those costs will be with us for decades.
Mr. Stiglitz noted that nearly 40 percent of the 700,000 troops from the first gulf war, which lasted just a month, have become eligible for disability benefits. The current war is approaching five years in duration.
“Imagine then,” said Mr. Stiglitz, “what a war — that will almost surely involve more than 2 million troops and will almost surely last more than six or seven years — will cost. Already we are seeing large numbers of returning veterans showing up at V.A. hospitals for treatment, large numbers applying for disability and large numbers with severe psychological problems.”
The Bush administration has tried its best to conceal the horrendous costs of the war. It has bypassed the normal budgetary process, financing the war almost entirely through “emergency” appropriations that get far less scrutiny.
Even the most basic wartime information is difficult to come by. Mr. Stiglitz, who has written a new book with Ms. Bilmes called “The Three Trillion Dollar War,” said they had to go to veterans’ groups, who in turn had to resort to the Freedom of Information Act, just to find out how many Americans had been injured in Iraq.
Mr. Stiglitz and Mr. Hormats both addressed the foolhardiness of waging war at the same time that the government is cutting taxes and sharply increasing non-war-related expenditures.
Mr. Hormats told the committee:
“Normally, when America goes to war, nonessential spending programs are reduced to make room in the budget for the higher costs of the war. Individual programs that benefit specific constituencies are sacrificed for the common good ... And taxes have never been cut during a major American war. For example, President Eisenhower adamantly resisted pressure from Senate Republicans for a tax cut during the Korean War.”
Said Mr. Stiglitz: “Because the administration actually cut taxes as we went to war, when we were already running huge deficits, this war has, effectively, been entirely financed by deficits. The national debt has increased by some $2.5 trillion since the beginning of the war, and of this, almost $1 trillion is due directly to the war itself ... By 2017, we estimate that the national debt will have increased, just because of the war, by some $2 trillion.”
Some former presidents — Washington, Franklin Roosevelt, Truman, Eisenhower — were quoted at the hearing on the need for accountability and shared sacrifice during wartime. But this is the 21st century. That ancient rhetoric can hardly be expected to compete for media attention, even in a time of war, with the giddy fun of S.N.L.
It’s a new era.
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Post by Jaga on Mar 7, 2008 0:27:11 GMT -7
Kai,
very interesting, especially these fragments:
The Bush administration has tried its best to conceal the horrendous costs of the war. It has bypassed the normal budgetary process, financing the war almost entirely through “emergency” appropriations that get far less scrutiny. ...
Because the administration actually cut taxes as we went to war, when we were already running huge deficits, this war has, effectively, been entirely financed by deficits. The national debt has increased by some $2.5 trillion since the beginning of the war, and of this, almost $1 trillion is due directly to the war itself ... By 2017, we estimate that the national debt will have increased, just because of the war, by some $2 trillion
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nathanael
Cosmopolitan
: “Die Wahrheit macht frei und ist das Fundament der Einheit (John Paul II)
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Post by nathanael on Mar 7, 2008 3:32:53 GMT -7
Jaga, your advice "to just buy euro" won't work for the U.S. retirees in Poland: we receive Social Security in dollars and only in dollars! Even if we bought euro each month upon the check's arrival, the monthly dollar drop would practically always be less than the conversion fee charged by local "kantors"! This means that, in the final analysis, we would lose money rather than gain! As far as the data you cite on the Bush Administration's war venture, they are correct. But citing those data won't help the dollar either! That's my whole point: we must find ways to alleviate the plight of the poor who are the ones suffering most, for, paradoxically, the rich have actually benefited from this war! This is the moment for the poor majority to demand a more equal distribution of wealth, regardless of "who did what"! Incidently, the latest news is that the dollar has achieved its lowest level in history in today's trade against the euro (we have been hearing this in Europe day after day, for many months).
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