^ So is the US to blame for Iceland's fall?
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^ So is the US to blame for Iceland's fall?
How do you work that one out?Quote:
Originally Posted by Jet Gorgon
As far as I am aware Iceland got into trouble by allowing their banks to play around with big chunks of money in other peoples currency while at the same time running consistent trade deficits. When the banking business fell over, they didn't have anything to back up the inflated value of their currency in the way of actual goods and the Icelandic currency became virtually worthless as other countries lost confidence in it. But they do actually produce stuff for export. Mainly fish I think. So they should be able to get back on their feet, all be it at a reduced standard of living compared to what they have been used to.
I am not sure how you think I am saying USA was responsible for Icelands fall from financial grace.
^ So, Iceland wasn't part of the "con job" you speak of?
This is not an interview Jet.Quote:
Originally Posted by Jet Gorgon
If you got something to say in the discussion then spit it out.
Here is a brief 1 minute video of GWB. Not only is he a lame-duck, but apparently an unpopular lame-duck.
YouTube - CNN Reports on President Bush - Where's the Love?
Peter Schiff and some other analysts. Interview on Bloomberg. Nov 21, 2008.
Bond Market bloodbath, dollar decline and rising gold.
Thoughts and opinions?
YouTube - Peter Schiff on Bloomberg TV 11/21/08 Great Interview 2/2
Here's the first part of the interview. More focus on the US dollar.
YouTube - Peter Schiff on Bloomberg TV 11/21/08 Great Interview 1/2
^ Jim Rogers on the Dollar. Him and his business Soros know a thing or two about forex:
Rogers Says Dollar to Be `Devalued,' Buys Commodities
Nov. 25 (Bloomberg) -- The U.S. dollar will be ``devalued'' as policy makers seek to weaken it, undermining the greenback's role as an international reserve currency, said Jim Rogers, chairman of Rogers Holdings in Singapore.
``They think that if you drive down the value of your money, it makes you more competitive, now that has never worked in history in the long term,'' said Rogers. The ICE's Dollar Index has gained 19 percent since Rogers said in an interview on April 27 he expected a dollar rally ``about now.''
The dollar advanced against 15 of the 16 most-traded currencies since the end of June, losing out only to the yen, as a global financial crisis drove investors to the perceived safety of Treasuries. U.S. politicians want to reverse those gains to revive growth, Rogers said.
The dollar is ``going to lose its status as the world's reserve currency,'' Rogers said yesterday in a televised interview with Bloomberg News. ``It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.''
Rogers said that he is buying the Japanese yen. All of the 16 most-active currencies have weakened against the yen since June, led by a 39 percent drop in the Australian dollar.
The ICE's Dollar Index, which tracks the greenback against the currencies of six major trading partners, traded at 86.147 as of 7:30 a.m. in London from 86.081 late in New York yesterday. It reached 88.463 on Nov. 21, the highest level since April 2006.
Plan to Exit Dollars
Rogers predicts the U.S. currency's rally ``will probably go into next year'' and said he plans to cut the remainder of his dollar holdings during this period.
``If I were doing it today, and what I have done today, is buy the yen,'' Rogers said. ``But, it is also an artificial move that's going on. It's a difficult problem to find out what is a sound currency.''
Democratic lawmakers including Senator Charles Schumer of New York said this weekend they plan to put an economic stimulus package as large as $700 billion before President-elect Barack Obama on his first day in office. Obama has called for a sizeable enough plan to jolt the economy, saying the U.S. faces the loss of ``millions of jobs'' unless immediate steps are taken to stimulate growth and rescue the nation's automakers.
Buying Commodities
Rogers also is buying commodities, saying their ``fundamentals have not been impaired and, in fact, are improved.'' He correctly forecast in April 2006 that the oil price would reach $100 a barrel and gold $1,000 an ounce.
``In mid-October, I started buying commodities, I started buying China and I started buying Taiwan,'' he said. ``I bought them all, but I've been focusing more on agriculture. I mean sugar is 80 percent below its all-time high. It's astonishing how low some of these prices are.''
The Rogers International Commodity Index Total Return has plummeted 52 percent from a record in July, including an 11 percent slide this month. The index has risen 124 percent over the past seven years.
Sugar surged the most in two weeks yesterday amid speculation that higher crude-oil prices will boost demand for alternative fuels, including ethanol made from cane.
Raw-sugar futures for March delivery rose 0.44 cent, or 3.9 percent, to 11.72 cents a pound on ICE Futures U.S. in New York yesterday. The gain was the biggest for a most-active contract since Nov. 4. Sugar has declined in each of the past three weeks.
from Here
Have to admit this trade makes sense, commods have had the shit kicked out of them. Dollar simply cannot hold up at its current level. It seems impossible.
US unemployment (U3) numbers are getting very high for the first time applicants and are still high for those already on it.
1 out of 3 home will be owned by the banks, soon.
YouTube - Housing Crisis - 1 Out Of Every 3 Homes Owned By The Banks!
Quote:
Originally Posted by Milkman
---------Faber Obviously doesn't know the meaning of bankrupt. The US gv'ts' debts are in dollars. It manufactures dollars. End of explanation.
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I think the concept of bankruptcy/insolvency is related to the obligations (promised pay-outs).Quote:
Originally Posted by who
SS & Medicare, and annul payments of the national debt.
The US government cannot print its way out of this.
The internal US economy may end up folding under the pressure of the retiring baby boomers, but the external US debt is no problem really.
All the external US debt is written in $USs. And all the external US debt gets paid back in $USs. It doesn't matter what the trading value of the $US is, all that matters is the number of zeros on the paper. If and when the $US crashes in trading value, places like China and Japan get paid back in $USs. And if the US govt has to crank up the printing presses to cover the debt, then that will ultimately devalue the trading worth of the $US. So China and Japan get the money they loaned to buy their products during the boom times of the $US, but when its paid back in $USs they find that this currency will now only buy half the goods it could when they loaned it. Effectively it means they have shipped a lot of real goods to USA over the preceding years and will likely only get paid back for maybe only half of them. Good for USA, but bad for the countries who put complete faith in the value of the $US.
A similar sort of thing is happening again right now with a lot of big money people pulling their money out of companies that actually produce tradable things and buying up $USs. The $US is booming again but it makes the country uncompetitive in trade and drives it deeper into debt trying to prop up unviable industries to stave off unemployment. But when places like China and Japan wake up they are sinking real goods into a black hole and stop lending to USA, the US borrow and spend your way out of debt strategy will come crashing down along with the value of the $US.
That one hasn't hit the world yet. But it will.
Thanks, Panda.Quote:
Originally Posted by Panda
When do you think the value of the US Dollar will significantly go down, or even crash?
TIA.
Mate, I wouldn't be game to put a date on that. But I would expect it to fully unfold within 2009. It only takes one cow to start a stampede.
Investors are pulling their money out of tangible goods production an putting it into $USs as they figure that is the last safe haven. But its really just compounding the problem and setting the whole world up for an even bigger fall when it comes.
Gold is back in high demand too and getting hard to find in some places. The price of gold is on the rise again. Expect gold prices to go through the roof next year as investors pull out of $USs and look for a safer investment.
I reckon when we see gold at $US2,000 an ounce there will be no turning back.
US gold reserves are huge by world standards but could only pay for a tiny fraction of their international debt.
'Quote:
Originally Posted by Milkman
----------The Laffer Curve was not invented on a napkin, it was illistrated that way to a fellow diner in a restaurant not a bar. And of course Laffer is right as history has proved over and over again.
.
.Quote:
Originally Posted by MilkmanI think the concept of bankruptcy/insolvency is related to the obligations (promised pay-outs).Quote:
Originally Posted by who
SS & Medicare, and annul payments of the national debt.
The US government cannot print its way out of this.
..............Yes it can "print its way out of THIS' What ever "this" is. Countries have been inflating thier way out of debt for centurys, but the US will not have to.
Marc Faber is the owner of a minor tip-sheet. His quality can be judged by the following quote:
"The Warren Buffett approach is dead and it's been dead for ten years and it's going to be dead for another ten years"
I will remind you that Buffett made his money over 50+ years by investing, and now is the richest man in the US.
.
Dow down nearly 700 points. Last weeks little short covering rally is over and its business as usual for the "strongest economy in the world".
Look out below, Im looking at seeing the 7500 level being tested this week.
Thanks for the reply above, Panda.
Here's a recent article about the change in the TARP (Troubled Asset Relief Program).
Paulson decided to change course (as we know) and not buy the toxic assets. This article claims that this change of course has led to continuied illiquidity.
Quote:
Credit markets turn ugly as Tarp turns its back on toxic assets
By Paul J Davies, Michael Mackenzie and Aline van Duyn
Published: November 20 2008 02:00 | Last updated: November 20 2008 12:52
US mortgages and credit markets on both sides of the Atlantic have been severely jolted since the US Treasury turned its back on plans to use some of its $700bn in financial bail-out funds to buy troubled assets from banks.
More than a week has passed since Hank Paulson, the Treasury secretary, changed the parameters of the Troubled Asset Relief Programme (Tarp). Yet despite Mr Paulson's insistence to Congress this week that policy actions were starting to bear fruit, the picture on the ground in the credit markets has turned uglier.
The realisation there are no other buyers for some of the toxic assets the government has decided not to buy has led to a sharp fall in the value of mortgage-related assets and a wave of renewed selling. Some large investment funds had bought mortgages expecting the Tarp would help to shine a light on the market and establish a clearing price.
"Now those markets will go back to being completely illiquid as there will be no price discovery process started by the Tarp," says Jay Mueller, portfolio manager at Wells Capital Management. "It is tremendously difficult to trade when the rules of the game change."
Bankers and analysts in Europe say the renewed gloom in US asset-backed bonds has knocked both European markets and general inter-bank liquidity. Institutions are being forced to face up to the prospect of further pain from some assets they hold.
....."The Treasury's announcement of a 180-degree shift in direction for the allocation of Tarp monies sent the credit markets into a tailspin," says Meredith Whitney, analyst at Oppenheimer. "As Tarp monies will no longer be allocated to buy illiquid assets off bank balance sheets, the market for such assets got even more illiquid.
Link & Entire: FT.com / UK - Credit markets turn ugly as Tarp turns its back on toxic assets
I went to the other channel and invited Storekeeper to come and join us on this thread.
He hasn't replied. :rolleyes:
Sounds like things are just rosy....it's the "Strongest Economy in the World" after-all.
And:Quote:
https://teakdoor.com/images/smilies1/You_Rock_Emoticon.gifDec. 5, 2008
WASHINGTON - Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession.
The new figures, released by the Labor Department Friday, showed the crucial employment market deteriorating at an alarmingly rapid clip, and handed Americans some more grim news right before the holidays
Entire: Yahoo & this: Economy shed 533,000 jobs in Nov. - Stocks & economy- msnbc.comQuote:
Home loan troubles break records again
WASHINGTON – A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy.
The Mortgage Bankers Association said Friday the percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier.
Distress in the home loan market started about two years ago as increasing numbers of adjustable-rate loans reset to higher interest rates. But the latest wave of delinquencies is coming from the surge in unemployment.
Ooooh, the squatters are moving into foreclosed homes.
Video - Breaking News Videos from CNN.com
Here is a brief youtube from a Canadian program about Gold Backwardation:
YouTube - Gold Backwardation. What Does it Mean? BNN 12/8/2008
If all other economies are suffering at a similar pace, I don't see a huge change.
Are there any major economies holding fast or advancing?
Strength is a relative term. You can't determine the relative strength of one person, team or country by looking only at your target team. It must be evaluated as it compares to others.
Can't figure out why but:Quote:
Originally Posted by Texpat
"The Brazilian Central Bank has predicted that GDP growth in 2008 will be 4.8%, with a rate of inflation of 4.7% and a balance of payments surplus of US$27bn."
Brazil's economic growth gathers pace | None | Embassy of Brazil in London
Good for Brazil. I suspect they steered clear of hedges, emphasized energy independence and kept real estate in check.
You figure they're the new strongest economy in the world? :)
Most stable perhaps but strongest no. They certainly should be members of that exclusive world economy's club.Quote:
Originally Posted by Texpat