Thread: The strongest economy in the world

This pretty much sums up the current state of the US...

Originally Posted by Milkman

Will the Fed buy US Treasuries bills?

Yep, they just printed $1 Trillion yesterday to do so. (Told you so ) Get your money outta greenbacks, Honey.
Where's Spin and BKK Andrew when you need 'em?

^ You got a cockle shell trading island we can go to, Milkie?

Devaluing the $US and inflating away debt is going to be a tricky balancing act for Obama. Because the $US has become as much a commodity as it is a currency (all be it a "pseudo" commodity), international investment in the $US has forced its value unnaturally much higher than it should be.

The $US dropped in value today between 3 and 4 % against all the major currencies. Gold and oil are both up. But how do you control such a shift in todays market conditions where investors are easily spooked and may cause a panic dumping of the $US? Time will tell whether Obama can manage a steady decline or it will turn into a stampede out of the $US.

^ Here is a report stating the basics of econ that most of us us. This channel/station tends to be gloomy towards the US. Nevertheless, it's short:

Russia and France are the leaders of the currency base change, right? To what, the euro (I heard many ME countries are doing trade in euros already).

^^^Spin, I fear you are right. The markets are so bladdy fickle right now, and they sure as fek didn't like that 90% bonus payment tax or Geithner's ongoing inability to sort out this mess. I am starting to feel sorry for the guy. He really needs some Wall Streeters with him, but bambam et al have shot themselves in the foot over this coz the people would protest if a big banker was put in an exec Treas position.

Changing the worlds reserve/trading currency to the Euro would be just as stupid as continuing with the $US. No individual country or currency bloc should have the ability to print their way out of debt.
It has long been proposed by many economists that the worlds trading currency should consist of a basket of currencies plus some precious metals. Just how they would put such a world currency together will be interesting to see. The only certain thing is that it is way overdue.

Why is that Panda ? surely there is a much greater security against the Euro ending up like the Dollar, the much more conservative economies in Europe would never allow the creation of Euro bonds not based on real value, the members of the Euro is by treaty forced to stay within certain inflation levels and currency values and thus cannot issue bonds or print Euros like they want it would take a lot of very different minded economies to agree on this.

Just like some of the the old Euro economies just now refuse to make any more big stimulus plans even though the US and England are asking them to.

What do you think about these sentiments ?

Unemployment (U3) is inching up. Oregon and Nevada now have U3 rates of 10% unemployment.

California’s Unemployment Rate Rises to 26-Year High (Update1)

By Bob Willis
March 20 (Bloomberg) -- California’s jobless rate surged in February to the highest level since 1983 while unemployment in Oregon and Nevada climbed above 10 percent for the first time in more than two decades.


Unemployment in California rose to 10.5 percent from 10.1 percent in January, its Employment Development Department reported today in Sacramento. Neighboring Oregon’s jobless rate rose a full percentage point to 10.8 percent, and Nevada’s increased to 10.1 percent.



“The West Coast is more heavily dependent on real estate and the decline there has been more pronounced” than in the rest of the U.S., said Sung Won-Sohn, an economics professor at California State University-Channel Islands in Camarillo, California. “We are not seeing any signs of stabilization in the job market.”
Unemployment across the nation may top 9 percent by the end of the year, according to economists surveyed by Bloomberg, and it could go higher. The national jobless rate rose to 8.1 last month, the highest in more than a quarter century, and the economy has lost 4.4 million jobs since the recession began in December 2007.



At least 19 states have so far reported individual employment figures for February. The rest of the states will be reporting through the end of next week and the Labor Department in Washington will collate the figures on March 27.

Link & Entire: California’s Unemployment Rate Rises to 26-Year High (Update1) - Bloomberg.com

Originally Posted by larvidchr

Why is that Panda ? surely there is a much greater security against the Euro ending up like the Dollar, the much more conservative economies in Europe would never allow the creation of Euro bonds not based on real value, the members of the Euro is by treaty forced to stay within certain inflation levels and currency values and thus cannot issue bonds or print Euros like they want it would take a lot of very different minded economies to agree on this.

Just like some of the the old Euro economies just now refuse to make any more big stimulus plans even though the US and England are asking them to.

What do you think about these sentiments ?

One of the main problems of having just one countries/ blocs currency as the worlds default trading currency is that it becomes a sought after commodity to stash away just like gold used to be. That increases demand and forces the value up to unnatural levels out of balance with productivity or debt.
The best way to avoid such an abnormal demand would be to spread the new world trading currency across as many stable currencies as possible. That way it would be virtually impossible for investors to distort the value of any one subordinate currency. Throw in gold as well to keep the playing field even more level.

Using the Euro as the worlds default trading currency wouldn't be good for the EU unless they had a lot of surplus productivity to absorb the expected demand for Euros or were prepared to borrow to sustain their economy, as an abnormally strong Euro would price them out of a lot of markets. Same, same USA right now.

^ Gold star for the lesson, Panda.

Very true Panda. One of the reasons that the USD has been stronger than it 'should have been' since the crisis is demand- banks worldwide were pulling in USD's to sure up their capital ratio's. The reserve currency has to be changed to a more representative measure, something I've maintained for years actually. It was fine for the US when it was the lions share of the worlds international trading economy- it is not now.

One of the reasons for the recent weakness of the USD is said to be divestment by China- it is gradually altering it's foreign reserves towards a more representative, rather than USD based currency profile. Allegedly. (these things are of necessity kept quiet). Apparently, it is divesting longer dated T bonds and buying shorter term instruments, as well as hard commodities.

As far as the current scare about printing money, I'd just like to put this in perspective. Of course, the first concern expressed is that printing money is inflationery- some quarters are even panicing about hyper-inflation. Very few in serious economic circles are though. The concern at the moment is staving off Deflation- which would lead to a deep, prolonged recession considerably worse than we have yet. Right now the concern is deflation, not inflation.

Enjoying reading all the comments. Maybe I'll learn something. Being an engineer type guy, seems to me the USD value will depend a lot upon how much other nations "print money" to stem economic down turn in their countries. It's all relative isn't?

Originally Posted by Panda

Originally Posted by larvidchr

Why is that Panda ? surely there is a much greater security against the Euro ending up like the Dollar, the much more conservative economies in Europe would never allow the creation of Euro bonds not based on real value, the members of the Euro is by treaty forced to stay within certain inflation levels and currency values and thus cannot issue bonds or print Euros like they want it would take a lot of very different minded economies to agree on this.

Just like some of the the old Euro economies just now refuse to make any more big stimulus plans even though the US and England are asking them to.

What do you think about these sentiments ?

One of the main problems of having just one countries/ blocs currency as the worlds default trading currency is that it becomes a sought after commodity to stash away just like gold used to be. That increases demand and forces the value up to unnatural levels out of balance with productivity or debt.
The best way to avoid such an abnormal demand would be to spread the new world trading currency across as many stable currencies as possible. That way it would be virtually impossible for investors to distort the value of any one subordinate currency. Throw in gold as well to keep the playing field even more level.

Using the Euro as the worlds default trading currency wouldn't be good for the EU unless they had a lot of surplus productivity to absorb the expected demand for Euros or were prepared to borrow to sustain their economy, as an abnormally strong Euro would price them out of a lot of markets. Same, same USA right now.

Thanks Panda I understand better now, so why not just use gold again then ? sorry for all the questions

Originally Posted by Norton

It's all relative isn't?

Originally Posted by larvidchr

so why not just use gold again then ?

Originally Posted by larvidchr

sorry for all the questions

It's OK they love it. Especially on a slow Sunday afternoon.

Originally Posted by larvidchr

Thanks Panda I understand better now, so why not just use gold again then ? sorry for all the questions

Probably because there is not enough of the stuff to go around.

Some interesting stats in Wiki.

"Gold reserves (or gold holdings) are held by central banks as a store of value. In 2001, it was estimated that all the gold ever mined totaled 145,000 tonnes.[1] One tonne of gold equated to a value of US$30.27 million as of February 14, 2009 ($941.35/troy ounces)[2]. The total value of all gold ever mined would be US$4.39 trillion at that price.[note 1]

Official gold reserves - Wikipedia, the free encyclopedia

I recall reading somewhere that if gold was to replace paper money for trade its value would have to increase to about $25,000 an ounce. Not sure if thats right, but sounds reasonable.

People are already buying gold that doesn't exist, except on paper.

Originally Posted by Panda

People are already buying gold that doesn't exist, except on paper.

Thanks again.
Yes I think we had something about that in this thread before, more gold being sold that recorded mined gold, and to stay away from that, and only buy gold you actually can hold in your hand.

Originally Posted by larvidchr

so why not just use gold again then ?

Some are.....

Informal poll:

How many job losses will there be for the month of March, 2009?

Less than 250,000?

250-499,000?

Over 500,000?

Over 600,000?

Over 650,000 jobs lost in March 2009?

More than 4.4 million Americans have lost their jobs since the recession started in December 2007 and more than 12.5 million are currently out of work. The Labor Department reported that 651,000 people lost their jobs in February, an 8.1% increase from the prior month.

This is the third straight month where 650,000 or more jobs have been lost. Monthly U.S. job losses have more than doubled since the fall of Lehman Brothers on Sept. 15, 2009.
Here are the staggering numbers:

Month Total job losses Unemployment rate

September 2008 321,000 6.2%

October 2008 380,000 6.6%

November 2008 597,000 6.8%

December 2008 681,000 7.2%

January 2009 655,000 7.6%

February 2009 651,000 8.1%

Prediction: Job losses will hit 650,000 or more in March. The Labor Department will report preliminary numbers for March 2009 on April 3, which will be used to judge this prediction.

Link: Over 650,000 jobs lost in March 2009? | The Industry Standard

Here is a summary on the potential effects of the increase in the money supply, deflation & possible inflation and hyper-inflation.

The Strongest Enonomy...heh

The London Times itemizes some of the earmarks in the Democrats' recent omnibus appropriation bill:

- Removing tattoos from gang members (California): $200,000
- Polynesian Voyaging Society (Hawaii): $238,000
- Swine odour and manure management (Iowa): $2m
- Preserving Lahontan cut-throat trout (Nevada): $250,000
- Stable fly control (Nebraska): $866,000
- Blackbird management (North Dakota): $265,000
- Encouraging teenagers to abstain from sex (Pennsylvania): $24,000

MM, I predict over 600K jobs loses for March 2009...

On another note, was watching Bill Maher last night and the topic of Glenn Beck came up... Every one on the panel tarred GB with the same brush, including Madeline Albright... In a single word, he's 'nutz'...