"We will heat our homes with your dollars!"

[Guest]

Re: "We will heat our homes with your dollars!"

Hey Metalman - sorry to bend your ear!

You know what, I'm not a bleeding heart patriot with my heart on my sleeve either! They can take the whole sorry mess and do whatever the F*** they want with it.

I'm gonna bail out of here one of these days and go live in Malta, or Cyprus or someplace (maybe the Galapagos Islands?) and tell America and it's beautiful constitution, which we've trashed with apathy and unholy debt, to go get stuffed. So there!





P.S. And yes I realise this is all hopelessly off-topic. I'll harder try to stay on topic in the future - really ...

[*T*]

Re: "We will heat our homes with your dollars!"

Is there any evidence of this so far? 30-year Treasuries yield 4.6%, for crying out loud.

All other indicators of excessive money creation (i.e. inflation) are here, except for those stubborn bonds. I have yet to read a convincing explanation -- with some evidence to back it up -- for how this can be.
Very puzzling.

China, other FCBs pegging explains the anomalous demand at the back end of the yield curve. I like Brad Setser for analysis on this. FCBs won't be stopping anytime soon. Until then, let's party like it's 1929!

[EJ]

Re: "We will heat our homes with your dollars!"

The last time there was a serious "third party" was Perot, and I believe that Clinton sized up the major issues (the federal deficit in particular) Perot was running on and changed course to address them.

I'd say you've got it right that the system is still in relatively good shape.

“The fault, dear Lukester, lies not in our stars, but in ourselves.”

Indeed the Perot's and Paul's influence the debate from outside the two main parties or in the case of Paul from within. However, once elected, the performance of Presidents of either of the two parties has become increasingly indistinguishable over the past 20 years. They are all FIRE Economy presidents.

To the point of the article, in the days of party politics, not coincidentally before the development of the FIRE Economy, one party or the other would seize upon the depreciation of the dollar to score points with voters. My point is that neither party is doing this today as a party issue. One reason is that voters don't understand or care. The other is that dollar depreciation has occurred more under both parties.

[FRED]

Re: "We will heat our homes with your dollars!"

good one. wonder what the brit bond yield curve looked like as the brit empire started to unravel.

dollardaze.com

[Guest]

Re: "We will heat our homes with your dollars!"

This is where I get an iTulip smackdown for being impertinent ... (gulp! )


Sarkozydollars_REDUX.jpeg.jpg

[jk]

Re: "We will heat our homes with your dollars!"

This is where I get an iTulip smackdown for being impertinent ... (gulp! )

the dollars might be better quality for that purpose than what they're using now.

[jimmygu3]

Re: "We will heat our homes with your bonars!"

Inflation question. Is it absolute or relative, or does absolute inflation matter?

This reminds me of a physics question I once heard, asking what would appear different if everything in the universe increased in size tenfold. Though my immediate reaction was that the relative relationships between planets, objects, blood cells, etc. would be the same, a deeper look reveals that gravity would have a much greater influence than in the smaller universe, creating earthquakes and terrific calamity as the Earth is sent hurtling toward the sun.

So, yes, absolute inflation matters. If all currencies inflate in tandem, exchange rates remain stable, but debts are repaid with devalued paper with less purchasing power. Interest rates must rise to include an inflation premium, putting strain on economic growth. Slowing economies and scarce jobs may keep wages down even as goods prices rise.

I'm trying to figure out how the "Earth is sent hurtling toward the sun" part of the analogy works. I suppose it's an international fire sale of assets to those with cash. Ten years ago I would say the US was the sun. Perhaps China is the sun now?

Jimmy

[FRED]

Re: "We will heat our homes with your dollars!"

Dollar slide pushes UAE to currency-peg crossroads
November 13, 2007 (Masayuki Kitano - REUTERS)

TOKYO – The United Arab Emirates is at a “crossroads” on the dirham's dollar peg, the central bank said on Tuesday in the clearest signal yet that the U.S. currency's slide is forcing Gulf oil producers to review exchange rates.

The euro rose 15 ticks against the dollar after Central Bank Governor Sultan Nasser al-Suweidi's remarks raised expectations that the UAE, Saudi Arabia and three neighbours were looking to unshackle their currencies from the dollar as Kuwait did in May.

Currencies also rallied across the world's biggest oil exporting region, although Suweidi said any policy shift would be decided by the rulers of the six Gulf states preparing for monetary union as early as 2010.

Given the bleak outlook for the dollar and the U.S. economy, the six could consider tracking a currency basket rather than the greenback, he said, without making clear whether that could happen before or after monetary union.

“The dirham's peg to the U.S. dollar has served the economy of the UAE very well in the past,” Suweidi said in a speech hosted by the Japan Bank for International Cooperation and the Japan Institute for Overseas Investment in Tokyo.

“However, we have reached a crossroads now with a further deterioration in the U.S. dollar and expected further weakening of the U.S. economy,” he said.

Dollar pegs force Gulf central banks to track U.S. monetary policy to maintain the relative value of their currencies, at a time when Federal Reserve is cutting rates and inflation in the Gulf is running at decade highs.

[metalman]

Re: "We will heat our homes with your dollars!"

Dollar slide pushes UAE to currency-peg crossroads
November 13, 2007 (Masayuki Kitano - REUTERS)

TOKYO – The United Arab Emirates is at a “crossroads” on the dirham's dollar peg, the central bank said on Tuesday in the clearest signal yet that the U.S. currency's slide is forcing Gulf oil producers to review exchange rates.

The euro rose 15 ticks against the dollar after Central Bank Governor Sultan Nasser al-Suweidi's remarks raised expectations that the UAE, Saudi Arabia and three neighbours were looking to unshackle their currencies from the dollar as Kuwait did in May.

Currencies also rallied across the world's biggest oil exporting region, although Suweidi said any policy shift would be decided by the rulers of the six Gulf states preparing for monetary union as early as 2010.

Given the bleak outlook for the dollar and the U.S. economy, the six could consider tracking a currency basket rather than the greenback, he said, without making clear whether that could happen before or after monetary union.

“The dirham's peg to the U.S. dollar has served the economy of the UAE very well in the past,” Suweidi said in a speech hosted by the Japan Bank for International Cooperation and the Japan Institute for Overseas Investment in Tokyo.

“However, we have reached a crossroads now with a further deterioration in the U.S. dollar and expected further weakening of the U.S. economy,” he said.

Dollar pegs force Gulf central banks to track U.S. monetary policy to maintain the relative value of their currencies, at a time when Federal Reserve is cutting rates and inflation in the Gulf is running at decade highs.

dollar down and gold and oil up on the news. time to crank up the beegees

[algerwetmore]

Re: "We will heat our homes with your dollars!"

Indeed the Perot's and Paul's influence the debate from outside the two main parties or in the case of Paul from within. However, once elected, the performance of Presidents of either of the two parties has become increasingly indistinguishable over the past 20 years. They are all FIRE Economy presidents.

To the point of the article, in the days of party politics, not coincidentally before the development of the FIRE Economy, one party or the other would seize upon the depreciation of the dollar to score points with voters. My point is that neither party is doing this today as a party issue. One reason is that voters don't understand or care. The other is that dollar depreciation has occurred more under both parties.

It is interesting that when any President of the U.S. threatens to print money outside of the Federal Reserve or any central bank that TPTB
do not take kindly to that message.
I did not realize that JFK (a democrat) had threatened to authorize congress to print greenbacks outside of the Federal Reserve system, much like what Lincoln(a republican) had proposed a hundred years earlier.
I suspect that though Ron Paul's message to abolish the IRS and other government institutions is seductively attractive, the media has long been coached to dismiss such common-sense rhetoric as naive and sophmoric.

[jimmygu3]

Re: "We will heat our homes with your dollars!"

dollar down and gold and oil up on the news. time to crank up the beegees

This time is different, metalman. In the '70s, American consumers all drove alone in large, gas-guzzling cars. We vowed never to get caught over a barrel like that again. :rolleyes:

[GRG55]

Re: "We will heat our homes with your dollars!"

This time is different, metalman. In the '70s, American consumers all drove alone in large, gas-guzzling cars. We vowed never to get caught over a barrel like that again. :rolleyes:

You did. They're called HOV lanes...;) Problem solved!

[FRED]

Re: "We will heat our homes with your dollars!"

Update:

Sarkozy fears 'economic war’ as dollar slides
Nov. 11, 2007 (Telegraph UK)

French president warns US it cannot allow currency to collapse as Europe suffers from euro's rise, reports Ambrose Evans-Pritchard

The French president, Nicolas Sarkozy, has warned the United States Congress that the US risks triggering "economic war" if it attempts to devalue its way out of trouble by allowing a relentless slide in the dollar.

President Nicolas Sarkozy fears 'economic war’ as dollar slides
Tough talking: President Nicolas Sarkozy of France warned Congress in Washington yesterday

The stunning remarks came as the greenback plunged to a record low of $1.4731 against the euro, causing a chorus of angry protests from industrial leaders in France and Italy. The dollar breached $2.10 against sterling for the first time since the early Thatcher years in 1981. On Wall Street the Dow tumbled 246.40 to 13,414.50.

Mr Sarkozy spared no sensitivities as he launched into a full-blown attack on the Bush Administration. "The dollar cannot remain solely the problem of others. If we are not careful, monetary disarray could morph into economic war. We would all be its victims," he said.

"Those who admire the nation that has built the world's greatest economy and has never ceased trying to persuade the world of the advantages of free trade expect her to be the first to promote fair exchange rates." Stephen Jen, an analyst at Morgan Stanley, said the dollar fall had become alarming. "This has been driven so far by Middle Eastern and Asian central banks, but there is a risk that hedge funds will start to join in, and they can be very powerful," he said.

"The most dangerous threat is that the yen will snap back and destroy the 'carry trade' before anybody has a chance to unwind positions."

[Ann]

Re: "We will heat our homes with your dollars!"

This is where I get an iTulip smackdown for being impertinent ... (gulp! )


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Silly boy!

[Guest]

Re: "We will heat our homes with your dollars!"

Sorry Ma'm, I shan't do it again, I promise. I understand these are very important men, and national diplomacy is at work here. :rolleyes: