Greenback in Free Fall Right Now?

Nov 7th, 2007, 12:23 PM
  #21  
 
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And of course there was that little announcement by GM today which won't make matters any better.
kerouac is online now  
Nov 7th, 2007, 12:29 PM
  #22  
 
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Actually the Canadian dollar is referred to as a "loonie" not a "loony" or "looney".

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Nov 7th, 2007, 12:30 PM
  #23  
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flanner: I would say we have a larger per capita public debt than any other country in the history of the world?
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Nov 7th, 2007, 12:31 PM
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Herewith some non-binding predictions, which may or may not haunt me in a few weeks...

The subprime crisis and its impact on the credit markets and banks is bottoming or has already done so.

The US stock markets have overreacted and there are now many undervalued equities.

The Labor department says industrial productivity in the US is increasing almost 5%, the fastest pace in several years. There's no evidence of wage inflation.

US interest rates aren't likely to fall any lower; neither are European rates.

The net result is favorable for an inflow of capital to buy up undervalued stocks, to buy capital goods, assets and commodities at discounted prices (owing to exchange rates.) Rather than buying bonds, foreigners may re-enter distressed real estate and equities sectors. Remember when the Japanese bought most of California and Hawaii?

The upshot will be a strengthening of the dollar, and a significant recovery in the markets. I wouldn't be surprised at a 10% - 15% bump by the end of the year. Personally, I'm buying. Tonight.

Of course, I could be wrong.

In the meantime, I urge our European and Asian brothers and sisters to come visit the USA, stay at our affordable and elegant hotels, drive our marvelous cars, using our bargain-priced auto fuel, fly in our roomy and well-seasoned airline fleets, and be sure to go home with some great souvenirs. Like a Boeing 787 for example.
Gardyloo is online now  
Nov 7th, 2007, 12:48 PM
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Gardyloo,

Please be right! It is hurting my business.
waring is offline  
Nov 7th, 2007, 12:54 PM
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The forces of supply and demand in the markets ( currencies, securities, commodities, goods) include numerous variables. Governments can try to correct some trends ( with monetary policies - like interest rate, or fiscal- like taxation) but most of the time only the market forces will change the trend.
Canadian dollar just "fell" to 1.07. The strong lonnie is not very good for Canadian manufacturing sector ( exports to US) service industries ( American visiting Canada) or Canadian retailers ( hordes of shoppers going south of the border)
danon is offline  
Nov 7th, 2007, 01:13 PM
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The root of this problem is with the individual. Behavior, lifestyle and attitude. Most people can't see it or refuse to believe it. It will happen in China. One day a generation will come along that believes their purpose in life is simply to enjoy the fruits of their ancestor's labors.
TravMimi is offline  
Nov 7th, 2007, 01:24 PM
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Some brave economists in France are now pleading the cause of "décroissance" -- a diminishing economy. Everyone except the poor (about whom something must be done, that's obvious) already has too much stuff, replacing computers, TVs, cars, clothes, etc., simply because we have becoming consuming maniacs and just need to spend our money (Fodorites could perhaps be lauded for spending money on seeing the world rather than buying products -- but I'm sure that they buy all of the products before setting out on their trips.). People work extra hours to earn more money and to pump more money into the economy. What if we decided that we had enough? What if we decided not to waste so much? That is the truly fascinating question asked by these economists, many of whom think we might be happier and calmer and less stressed if we were not running after all this stuff -- since we have perfectly good stuff already! And that might make it easier for those still lacking the stuff to get it themselves. And if we earned enough for our needs by working only 30 hours a week instead of 40 hours, might our lives improve?

I truly believe that these economists might be on to something.
kerouac is online now  
Nov 7th, 2007, 01:36 PM
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kerouac - good post. People do buy lots of useless junk. People should consume less and at least try to buy things made in their own country. People should also start to see value in other people's services. Can't even say how sick I am of seeing people looking for "cheap". I never thought only my services were worth a lot to others.
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Nov 7th, 2007, 01:43 PM
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I don't get all the hand-wringing about how "the US has brought this on ourselves." Come on. At the end of the day, this stuff goes in cycles. I remember jokes about the Canadian Peso less than 10 years ago, and now look at it.

The low dollar will help US manufacturers and hurt European ones. China already exports more to Europe than the US. Soon enough, the manufacturing sectors in Europe (and this sector is important in places like France and Germany) will be unattractive and uncompetitive. US companies will benefit, raising the dollar and around we go. And this past week I was reading in the UK newspapers about fears of a housing collapse in the highly overvalued markets in Southern England.

Don't forget that China, the big bad bogeyman in the world economy is accused of artificially keeping their currency undervalued! Or that Thatcher had a conscious policy to devalue the pound, which some credit with UK's rise from economic basket case.

Please folks, let us keep some perspective. That Europe is suddenly not such a cheap vacation destination for Americans is not the end of the world. And nobody in power cares. And nobody in power should care. It will correct itself, and in another 10 years we will have moved onto "what is happening to the Euro?"
travelgourmet is online now  
Nov 7th, 2007, 01:48 PM
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Wuhu! Ebay - here I come!
Loveling is offline  
Nov 7th, 2007, 01:52 PM
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"People should consume less and at least try to buy things made in their own country."

Why? I live in a global world and I like it that way. It means fresh strawberries from Chile in the dead of winter. It means cutting edge electronics from Korea. Powered by microchips made in the US. It means wines having a nice Gruner with my meal in a New York restaurant. I feel comfortable in saying that we have never had it better.
travelgourmet is online now  
Nov 7th, 2007, 01:54 PM
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10 years from now the world will be a different place, with a different balance of power and hopefully a sounder US dollar. And I'm also sure, if forced, we'll all be able to spend money only on things that are really needed. Then people don't need to be tought to "not spend money on useless things." It they don't have the money, they won't spend it.
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Nov 7th, 2007, 01:58 PM
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Not having the money use to stop people from buying lots of useless junk in the good ole days. Doesn't stop many now. (trying to keep a straight face)
TravMimi is offline  
Nov 7th, 2007, 02:00 PM
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You think, they still get any credit from the banks after all this? Knowing they can't pay it back and are out of a job.
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Nov 7th, 2007, 02:02 PM
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logos - yes
TravMimi is offline  
Nov 7th, 2007, 02:06 PM
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Well, then the banks aren't able to learn from this. It seems so much easier to get a loan in the US than over here. Will be interesting to see.
logos999 is offline  
Nov 7th, 2007, 02:07 PM
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"I would say we have a larger per capita public debt than any other country in the history of the world?"

Well, per capita public debt doesn't really matter. More useful, as a % of GDP, the US public debt is not terribly high. Similar to Canada, France, and Germany. It pales in comparison to Japan.

Peruse the rankings here:
https://www.cia.gov/library/publicat.../2186rank.html

We won't even get into the implied liability that is the state pensions in rapidly aging populations like in the EU.
travelgourmet is online now  
Nov 7th, 2007, 02:11 PM
  #39  
 
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Now that I'm out on my limb, I'll comment on some of the macroeconomic blether that currently passes for wisdom.

"We consume too much, we should simplify our lives…"

Okay, sell that one to a billion and change Chinese, or a billion and change Indians, or a six bits shy of a billion Africans. We've had our good times, friends. Time you simplified yourselves.

What cheek. Borderline racism, if you ask me.

The "glut" of personal wealth and assets in the west has provided a glut of jobs in places where you used to get born in groups, work hard and die young. Chinese kids have jobs and money in their pockets and are living longer and traveling and having healthier babies and raising families… and competing for resources that we formerly didn't need to share, or wouldn't. More power to them, I say. Live long and prosper.

I think décroissance is a great idea. For France.
Gardyloo is online now  
Nov 7th, 2007, 02:42 PM
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I think this post is an omen: I am having my master exam very soon now, and I really spent too much time her on Fodors. And the topic is.... international macro fluctations. Hihi! What a great way to pull me back to my books!
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