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Old 08-16-2008, 10:54 AM
 
Location: Seattle, WA
209 posts, read 549,053 times
Reputation: 87

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Quote:
Originally Posted by Humanoid View Post
No, of course not.


When people talk about "devaluing the dollar" its usually unclear what they mean. Either you are talking about inflation or how the dollar is trading against other currencies. The bill isn't inflationary because everything is going to replace credit/money that has been destroyed. The dollar could very well weaken against some other currencies if our national debt goes up, but that assumes all things are equal on the other end. In reality things are going to get worse in Europe etc too, so the increased debt may have no effect on the dollar.
Maybe you should look at inflation as the cause and not the source. If we are looking to "replace" $300 billion dollars according to your statement, then we should look at the 21 months we had our prime interest rate at 1% and keep that in the light when we look at this "inflation" of home prices because of the speculation of the investment banks in the U.S. home market. So it the source is inflation then any bill to fix or help this market is "Inflationary" as well. People see to only think about what is happening right now but they don't look into the history to see what caused this situation. Bottom line is inflation is on the rise and every person who reads this post and has to purchase goods knows it as well.
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Old 08-16-2008, 11:04 AM
 
Location: Seattle, WA
209 posts, read 549,053 times
Reputation: 87
Quote:
Originally Posted by Humanoid View Post
The rate of growth in M3 estimates is slowing, see:

Alternate Data Series


So, after I show you the money supply is weakening you resort to this... Price increases is not a measure of inflation, rather its a possible effect of inflation. Prices can increase for other reasons and given that the money supply is weakening and credit contracting the price increases are unlikely to be caused by true inflation.
Are you so myopic that you don't see the tremendous rise in our money supply from 2005 to current. If you don't think that over doubling our money supply in over 3 years is not inflationary then I don't know what too tell you. I wonder how we accomplished on increasing our money supply in such a short time????

Also, weakening money and credit supply can be inflationary. Just because our consumption is dropping does not mean prices for staple products will rise because we keep issuing money. Yes, thing we don't need might go down but I don't count items we don't need as part of what I define as inflationary products that affects everyone. You must be either a economist, politician or PR exec.
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Old 08-16-2008, 11:12 AM
 
Location: Ohio
21,311 posts, read 15,089,573 times
Reputation: 17742
Quote:
Originally Posted by baystater View Post
What other than Food, Steel, and some medicines does America really produce anymore in any significant quantity to justify the dollar being as strong as it is now?
To be honest nothing really tangible makes the dollar worth that much. It more of faith by U.S. citizens and world citizens that make the dollar worth anything at all.
No, it's world demand for US dollars that gives it its value on the world market. At one time 100% of oil, coal and natural gas was traded exclusively in US Dollars. The Soviet Union had to sell its oil and natural gas in US Dollars, or not at all.

Even though the US and UK have done everything in their power to block the ascension of the Ruble, the Russians have managed to open an international exchange and are now selling oil and natural gas in Rubles, instead of US Dollars, and conduct all of their trade in Rubles and Euros, instead of US Dollars. The Ruble has appreciated 100 points against the US Dollar in just 2 years.

Many countries are moving toward Rubles, Euros or basket currencies to escape from abusive US trade policies and foreign policies over the last several decades, especially the abusive Washington Consensus initiated by the Clinton Administration
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Old 08-16-2008, 11:25 AM
 
Location: Seattle, WA
209 posts, read 549,053 times
Reputation: 87
Quote:
Originally Posted by Mircea View Post
No, it's world demand for US dollars that gives it its value on the world market. At one time 100% of oil, coal and natural gas was traded exclusively in US Dollars. The Soviet Union had to sell its oil and natural gas in US Dollars, or not at all.

Even though the US and UK have done everything in their power to block the ascension of the Ruble, the Russians have managed to open an international exchange and are now selling oil and natural gas in Rubles, instead of US Dollars, and conduct all of their trade in Rubles and Euros, instead of US Dollars. The Ruble has appreciated 100 points against the US Dollar in just 2 years.

Many countries are moving toward Rubles, Euros or basket currencies to escape from abusive US trade policies and foreign policies over the last several decades, especially the abusive Washington Consensus initiated by the Clinton Administration
This is correct. Demand for our currency gives it value and helps cover up our trade imbalances and deficit spending. It is true that as energy and other important raw materials are traded more and more in other currencies this will hurt the average American because we will then have to "trade" our dollars for whatever currency the raw material (or finished product) is being traded in and at that point they will take into account our trade imbalances and deficit spending when figuring part would make "par" for a given transaction.
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Old 08-16-2008, 11:35 AM
 
Location: Ohio
21,311 posts, read 15,089,573 times
Reputation: 17742
Quote:
Originally Posted by BankREO View Post
Lastly, our environment is inflationary
There is natural inflation. Even if the US was still on the gold standard and the idiot wackos who constantly whine about the Federal Reserve were running the show, what moron believes bread would still be $0.05 a loaf? Prices would still increase over time due to natural inflationary tendencies. The goal in life is to make more money and more profits, and once efficiency is at its greatest and costs have been minimized, the only way to make more money or profits is to increase prices

Quote:
Originally Posted by BankREO View Post
I am not sure where you are shopping but prices are going up and food boxes are decreasing in size to make it look like they are not raising prices. Proof is in the pudding.
That's because of Cost Inflation. It has nothing to do with the Federal Reserve, or Congress or interest rates. The solution to Cost Inflation is simple: Stop Consuming.

When there is a shortage of corn, the price goes up, and so does the price of all products made from corn, even soft drinks and juices, because they're made with high fructose corn syrup made from corn. Meat prices go up because livestock are fed with corn. Dairy products go up because of corn.

That has nothing to do with the Federal Reserve or interest rates.
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Old 08-16-2008, 11:58 AM
 
Location: Seattle, WA
209 posts, read 549,053 times
Reputation: 87
Quote:
Originally Posted by Mircea View Post
There is natural inflation. Even if the US was still on the gold standard and the idiot wackos who constantly whine about the Federal Reserve were running the show, what moron believes bread would still be $0.05 a loaf? Prices would still increase over time due to natural inflationary tendencies. The goal in life is to make more money and more profits, and once efficiency is at its greatest and costs have been minimized, the only way to make more money or profits is to increase prices



That's because of Cost Inflation. It has nothing to do with the Federal Reserve, or Congress or interest rates. The solution to Cost Inflation is simple: Stop Consuming.

When there is a shortage of corn, the price goes up, and so does the price of all products made from corn, even soft drinks and juices, because they're made with high fructose corn syrup made from corn. Meat prices go up because livestock are fed with corn. Dairy products go up because of corn.

That has nothing to do with the Federal Reserve or interest rates.
Yes and not, yes demand does drive prices and a reduction in consumption will help keep rises to a slower growth rate. I feel the money supply should grow somewhere along the lines of population growth or decline. But I do disagree if you believe deficit spending the extremely low interest rates do not turn into price inflation as well. We have to remember that we don't produce a majority of the good in the U.S. that we consume so when we go to our trading partners they take into account our trade imbalance and the amount of dollars in the system compare to their historic level and what they project to be the amount in the future. So our government does have some responsibility for our price increase. Low Interest Rates via The Fed - When you keep interests very low for a long time you drag down yields across the board even to a point of "negative interest rates. This will lead to banks and investors taking more risk to get the return they were used too, this lead to speculation and then with money being so cheap it under-prices risk and that creates the bubble.
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Old 08-16-2008, 09:00 PM
 
48,509 posts, read 86,173,019 times
Reputation: 18105
Well if you look at the russian economy it is pretty well nothing except for the oil trade. We in fact have reduced the oil that we are capable of producing and instead send more and moire money to foreign sellers very year,We also are importing natural gas ihn Liqid form more and more. We don't want to produce for ourself and then whine when our currency lfys out of the country.I can remember when carter was president and he said there was no way we evr would agin import over 40% of our crude oil agin because it was dangerous to the economy being dependent on foreign oil, How they cahnge there tune with time in politics.
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Old 09-29-2008, 09:04 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,474 posts, read 14,168,385 times
Reputation: 6374
Quote:
Originally Posted by ViewFromThePeak View Post
(2 months ago...) In the bill, they've approved Paulson's "bazookanomics" of a blank check available for Fannie/Freddie. Not only will Paulson have to pull out the bazooka (he claims he won't have to), he'll blow away the dollar with it.
I shall call you, "Miss Cleo."
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Old 09-29-2008, 09:13 PM
 
Location: America
6,987 posts, read 15,766,746 times
Reputation: 2073
Quote:
Originally Posted by Mircea View Post
No, it's world demand for US dollars that gives it its value on the world market. At one time 100% of oil, coal and natural gas was traded exclusively in US Dollars. The Soviet Union had to sell its oil and natural gas in US Dollars, or not at all.

Even though the US and UK have done everything in their power to block the ascension of the Ruble, the Russians have managed to open an international exchange and are now selling oil and natural gas in Rubles, instead of US Dollars, and conduct all of their trade in Rubles and Euros, instead of US Dollars. The Ruble has appreciated 100 points against the US Dollar in just 2 years.

Many countries are moving toward Rubles, Euros or basket currencies to escape from abusive US trade policies and foreign policies over the last several decades, especially the abusive Washington Consensus initiated by the Clinton Administration
ding ding ding! yep, the dollar is losing ground as a reserve currency. That is for damn sure.
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Old 09-29-2008, 09:48 PM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,807,967 times
Reputation: 1708
Quote:
Originally Posted by baystater View Post
What other than Food, Steel, and some medicines does America really produce anymore in any significant quantity to justify the dollar being as strong as it is now?
To be honest nothing really tangible makes the dollar worth that much. It more of faith by U.S. citizens and world citizens that make the dollar worth anything at all. Actually it's faith in America that makes the dollar worth anything. Unfortunately I got this bad feeling that in the short term the faith in the dollar is not that strong, so we will be weak for while.
Quote:
Originally Posted by Mircea View Post
No, it's world demand for US dollars that gives it its value on the world market. At one time 100% of oil, coal and natural gas was traded exclusively in US Dollars. The Soviet Union had to sell its oil and natural gas in US Dollars, or not at all.

Even though the US and UK have done everything in their power to block the ascension of the Ruble, the Russians have managed to open an international exchange and are now selling oil and natural gas in Rubles, instead of US Dollars, and conduct all of their trade in Rubles and Euros, instead of US Dollars. The Ruble has appreciated 100 points against the US Dollar in just 2 years.

Many countries are moving toward Rubles, Euros or basket currencies to escape from abusive US trade policies and foreign policies over the last several decades, especially the abusive Washington Consensus initiated by the Clinton Administration
I still stand by what I say. Look how did we lose over a trillion dollar of wealth in a couple of hours today. Really was it the demand for the dollar that shifted everything? I don't think so. I think it has more to do with the fear that the U.S. consumer market will stop spending and lending. Basically what America does it buy things and that's it. We don't make anything anymore. There is nothing tangible to our economy that we can hedge our bet against. Basically what I'm saying is that a lot of the money we have supposedly created is nothing more than a illusion there nothing backing it...nothing at all. Well......maybe some nuclear weapons.
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