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Dollar loses reserve status to yen & euro

I wasn't worried about your spelling.
 
I reject the idea that it's inevitable. I'm pretty sure the concession that it is can't be fairly read into chevydriver's post, either.
 
The dollar was already caving when Obama took office.

And it's nice to see that the central banks around the world aren't learning the consequences of what it means to have one reserve currency.

The U.S. dollar gained popularity because of Cold War politics. It has never been the strongest currency.

Look at the chart below.... it was on the rebound when Obama came to office, it started to tank the week of 12-12-2008, came back 2 weeks later, stayed good untill 3-6-2009 and has been tanking since.

Where do you get your info?

USW.gif
 
And if you actually cared about what you pretend to, you would have criticized Bush when the dollar had the largest drop in value in 2006. I see you have utterly failed to provide evidence of such criticism. Have you even ever criticized the reckless fiscally liberal Bush spending?

Oh I forgot.

GOP = Can Do No Wrong
Dem = Evil Incarnate

Even when they are following the same policies.

Liberal = The brunt of the blame on all things unwanted by all non-liberals. Unless it can be clearly pinned on a single democrat or republican.
 
Look at the chart below.... it was on the rebound when Obama came to office, it started to tank the week of 12-12-2008, came back 2 weeks later, stayed good untill 3-6-2009 and has been tanking since.

Where do you get your info?

Where did you get your education?

The dollar was rising due to massive internal domestic demand for T-bills as people were exceptionally afraid. Now that people are diversifying their portfolios and getting rid of T-bills/reducing demand for new ones, it's expected that holding all other factors constant that the dollar will decline. The big spike in your graph is purely artificial as it was driven by fear. Now, if you were honest, you would have discussed the sizable portion of the graph on the left which shows a clear decline under Bush.
 
Short-term and long-term factors are weighing on the dollar. Some factors include:

1. Deterioration of the U.S. fiscal position. The progress made during the 1990s was wiped out in the 2000s and, in terms of structural deficits, things have worsened more quickly during the Great Recession. The lack of meaningful efforts to address the nation's long-term fiscal imbalances from its mandatory spending programs has continued. Not since the 1981 Greenspan Commission undertaken by President Reagan has there been any meaningful attempt to address some of those imbalances.

2. Absence of meaningful regulatory reform. Already, the World Economic Forum ranks the U.S. financial system very poorly when it comes banking system stability (53rd). More than a year after the financial crisis, the deeply flawed VAR (value-at-risk) model that provided little meaningful value in terms of financial risk has not been eliminated from satisfying SEC requirements, scalable capital standards to address the "too big to fail" issue have not been implemented, capital standards have not been tied to written derivatives positions, and accounting transparency that eliminates maintaining risk off the balance sheet has not been put in place.

3. There is some possibility that the enormous monetary liquidity in the system has, rather than significantly stimulating the macroeconomy, pushed equities prices toward levels not justified by the overall macroeconomic outlook. At this time, I don't take that position, but a year from now, the picture should be clearer.

4. Overall, the U.S. is continuing to rapidly grow its debt. While households have somewhat trimmed their excessive debt, nonfinancial corporate and, especially federal government, debt have risen markedly. The overreliance on leverage helped precipitate the recent financial crisis. The debt shift that is underway could increase prospects for a currency crisis.

5. Structural flaws in the U.S. economy e.g., lack of competitiveness in some manufacturing sectors, the need for a further unwinding of the nation's trade deficit, etc.

6. Long-term factors: A growing educational attainment gap with key overseas competitors and what amounts to a slowly rising health care expenditures bubble on account of continuing growth in such expenditures well in excess of nominal growth. Ultimately, foreigners will not subsidize U.S. health purchases by lending the U.S. funds to meet its health care needs, so the health expenditures relative to the economy will eventually reach a critical point. The Baucus Bill, even as it is forecast by the CBO to meaningfully reduce the incidence of uninsured persons and will be budget neutral (namely due to its tax provisions), does not address the issue of excessive growth in national health expenditures. Indeed, as a proxy, the CBO forecasts that the program's expenditures will be rising 8% per year within 10 years. All said, the two long-term factors argue for a productivity deficit to develop in the U.S. relative to key economic competitors and the failure to address excess growth in health expenditures hints at a debt crisis. By the time that potential bubble bursts, U.S. public debt will likely be markedly higher than it is today. As a result, the kind of extraordinary fiscal stimulus and financial rescue plans undertaken during the financial crisis and recession will not be available. Monetary stimulus would be highly inflationary in such an environment.

7. Realignments in the global economy e.g., China's playing a larger role in the future. Global economic and geopolitical shifts will have an impact.
 
So what are you saying Don? :mrgreen:
 
Short-term and long-term factors are weighing on the dollar. Some factors include:



That was interesting, I've never heard health care spending described as a bubble.
 
Im sure privitizing gains and making losses social doesn't hurt the dollar.

[ame=http://www.liveleak.com/view?i=43c_1255579308]LiveLeak.com - The Wall Street Bankers Privatized Their Profits And Socialized Their Losses[/ame]
 
The dollar has been in the crapper for days. In high school the teachers were having problems because it kept weakening and they were paid in dollars, luckier people got paid in euros for their work.

This has been an oncoming trend.
 
[ame="http://www.youtube.com/watch?v=Ek7zc0lJxbM"]YouTube - Goldman Sachs Bribed Senate To Pass Bailout Bill[/ame]


bonuses-put-goldman-in-public-relations-bind: Personal Finance News from Yahoo! Finance (700,000$ bonus for all employees? DAMN)

A celebrated Goldman Sachs partner, Gus Levy, coined the maxim that long defined the bank, the savviest and most influential firm on Wall Street: “Greedy, but long-term greedy.”

But these days that old dictum is being truncated to just “greedy” by some Goldman critics. While many ordinary Americans are still waiting for an economic recovery, Goldman and its employees are enjoying one of the richest periods in the bank’s 140-year history.

Goldman executives are perplexed by the resentment directed at their bank and contend the criticism is unjustified. But they find themselves in the uncomfortable position of defending Goldman’s blowout profits and the outsize paydays that are the hallmark of its success.
 
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Billionaire among 6 nabbed in inside trading case - Yahoo! Finance



NEW YORK (AP) -- One of America's wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits and was a wake-up call for Wall Street.

Raj Rajaratnam, a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to use insider information to trade securities in several publicly traded companies, including Google Inc.
 
From [ame=http://en.wikipedia.org/wiki/Reserve_currency]this page[/ame], "For this reason, the U.S. dollar is said to have "reserve-currency status," making it somewhat easier for the United States to run higher trade deficits"

At least one good thing...
Maybe in the next 10 years someone will realize that it's NOT a good thing to have a $1.5+ trillion deficit? I live to see the day :doh

Note that I only have a very rudimentary knowledge of economics, if the quote I posted is complete BS, please call me out on it.
 
madoff money

From this page, "For this reason, the U.S. dollar is said to have "reserve-currency status," making it somewhat easier for the United States to run higher trade deficits"

At least one good thing...
Maybe in the next 10 years someone will realize that it's NOT a good thing to have a $1.5+ trillion deficit? I live to see the day :doh

Note that I only have a very rudimentary knowledge of economics, if the quote I posted is complete BS, please call me out on it.
The US gets to export part of their inflation. Cheap products from China, with its undervalued yuan, do the rest. Now guess what will happen if this comes to an end.
My tiny lil country annually invests about $100-150 billion in the US. The US coughs, we throw up. I wouldn't want to live in a world without dollar denominated assets...
 
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What does this thread tell us?

When a Republican president oversaw the fiscally liberal policies that got us here, including the largest decline in the dollar's value in years, he deserved absolutely no criticism at all. Notice neither Goobieman nor Harsaw posted a single link to any of their posts in 2006 criticizing Bush for the massive dollar decline.

When a Democrat inheriting a near doubling of the national debt and spends more on top of that has the roosters coming home from the bad fiscal policies of the last 8 years, he's the only one to blame.
 
What I'd like to know if why so many people are viewing a relative decline in the value of the dollar as such a tragedy.
 
What I'd like to know if why so many people are viewing a relative decline in the value of the dollar as such a tragedy.

Because they see it as a "loss of face" it seems. If you notice there are very very few economic arguments in this thread, and much more along partisan political lines and conspiracy theories.
 
Because they see it as a "loss of face" it seems. If you notice there are very very few economic arguments in this thread, and much more along partisan political lines and conspiracy theories.

I certainly don't mind the dollar going down and people putting money into the stock market.
 
That was interesting, I've never heard health care spending described as a bubble.

It's not a true bubble, but shares numerous characteristics with bubbles including:

1. The expenditures trend is unsustainable
2. At some point in the future, the trend would lead to a crisis--probably a fiscal crisis.
3. In terms of psychology, one can find literature in which some argue that there is 'nothing wrong' with rapidly rising health expenditures relative to the economy, because such a trend reflects personal choice. Of course, one should not forget that people chose to purchase homes they could not afford, financial institutions made loans to people who should not have received them, etc. Ultimately, the housing bubble burst.
4. Leverage: The federal government is underwriting the nation's health system and its borrowing needs are increasing. Some might argue that aside from Medicare, Medicaid, the VA System, that the U.S. system is private. It is not so simple. The private system is subsidized through tax expenditures e.g., tax exclusion for insurance policies, etc. Private insurers enjoy anti-trust exemptions.

Health expenditures cannot grow faster than the economy indefinitely. For starters, the health sector will never even approach 100% of the economy. In addition, as it grows much larger, foreigners will not continue to underwrite the nation's borrowing needs, a growing share of which will be plowed into health care.

Unfortunately, the time for difficult decisions has not yet arrived. Even as the Baucus bill has its flaws, some of which are significant, the "free lunch" crowd--labor unions and America's Health Insurance Plans (AHIP)--wants to see the bill's limited mechanisms for assuring that it is fully paid-for gutted. IMO, those financing provisions need to be strengthened significantly given past historic experience where Congress routinely waived similar mechanisms e.g., as they related to Medicare reimbursements.
 
What does this thread tell us?

When a Republican president oversaw the fiscally liberal policies that got us here, including the largest decline in the dollar's value in years, he deserved absolutely no criticism at all. Notice neither Goobieman nor Harsaw posted a single link to any of their posts in 2006 criticizing Bush for the massive dollar decline.

OK, first of all, this is just about the textbook definition of a strawman.

This thread is about the possibility of the dollar losing reserve currency status. That's an entirely different thing from a mere decline in the dollar's value. The value of the dollar goes up and down all the time. Its status as the world's reserve currency is something decidedly more.

Second, you can't simply pull out a single story from years ago and demand to see a similar reaction to it, and if there isn't one, it's proof positive of inconsistency. That's, simply put, stupid. No one responds to every single story.

Third, if you want to prove inconsistency, you need to prove it by linking to previous posts which exonerated Bush for the same thing. You can't just say "I didn't see you complain about it then!!!! You're inconsistent!!!!" You also can't prove a negative.

Fourth, you also need to keep it consistent with what I actually said here, which wasn't even about spending, but about monetary policy, i.e., printing Monopoly money.

Fifth, here's a goddamn post of mine bashing Bush and Co. for their spending:

http://www.debatepolitics.com/archi...h-exceeds-500b-4th-year-row-2.html#post375019

"Absolutely no criticism," eh? Maybe you should have some idea what the hell you're talking about before you spout off, Mr. Anti-Stupid.
 
OK, first of all, this is just about the textbook definition of a strawman.

Only to those ignorant of the subject. Watch. That's you.

This thread is about the possibility of the dollar losing reserve currency status. That's an entirely different thing from a mere decline in the dollar's value. The value of the dollar goes up and down all the time. Its status as the world's reserve currency is something decidedly more.

Except that the dollar losing its status as the reserve currency is directly tied to instability stemming from a long history of fiscal policies that directly cause instability in the dollar's value. Massive US debt affects the value of the dollar. With many countries and central banks holding billions of US dollars, our fiscal liberalism is a direct threat to their financial health. Blaming Obama for this when the foundation was clearly laid by Bush and ignoring how Bush nearly double the debt is dishonest and a sign of severe partisan hackery.

Second, you can't simply pull out a single story from years ago and demand to see a similar reaction to it, and if there isn't one, it's proof positive of inconsistency. That's, simply put, stupid. No one responds to every single story.

Except that you people are harping on relatively small declines in the dollar yet you completely ignored a TRULY MASSIVE decline under Bush. Furthermore, as I pointed out, none of the hacks were even want to even acknowledge the fiscal policies that got us here under a Republican.

Democrat = Evil Incarnate
Republican = Can Do No Wrong

Ignore the fact that their differences are immaterial.

Third, if you want to prove inconsistency, you need to prove it by linking to previous posts which exonerated Bush for the same thing. You can't just say "I didn't see you complain about it then!!!! You're inconsistent!!!!" You also can't prove a negative.

Not at all. You said nothing about Bush's role. Yet you blame only Obama. Furthermore, you deliberately ignored much of the actual argument as to why Bush was the problem and only blame Obama.

Partisan Hack in this regard you are.

Fourth, you also need to keep it consistent with what I actually said here, which wasn't even about spending, but about monetary policy, i.e., printing Monopoly money.

Except that we had the same policies back then as well. Furthermore, monetary policy alone won't do this unless it's Weimar Republic type. The real threat is due to the massive debt and the unwillingness of anyone in Government to take a hard stance against it. We are not the Weimar Republic when it comes to printing presses as much of the spending in the past two years was debt financed.

And you deliberately ignore how Bush's policies got us to this point. People were talking about the problems of a weak dollar for years. YEARS. But apparently to you, deliberate policies to weaken the dollar under Republicans is okay!

Wow. One line of criticism. And you did not even mention Bush. Yet in this thread alone you devoted far more time in addition to just bashing Obama.

I guess you're just another Consistency-Free poster.
 
Only to those ignorant of the subject. Watch. That's you.



Except that the dollar losing its status as the reserve currency is directly tied to instability stemming from a long history of fiscal policies that directly cause instability in the dollar's value. Massive US debt affects the value of the dollar. With many countries and central banks holding billions of US dollars, our fiscal liberalism is a direct threat to their financial health. Blaming Obama for this when the foundation was clearly laid by Bush and ignoring how Bush nearly double the debt is dishonest and a sign of severe partisan hackery.



Except that you people are harping on relatively small declines in the dollar yet you completely ignored a TRULY MASSIVE decline under Bush. Furthermore, as I pointed out, none of the hacks were even want to even acknowledge the fiscal policies that got us here under a Republican.

Democrat = Evil Incarnate
Republican = Can Do No Wrong

Ignore the fact that their differences are immaterial.



Not at all. You said nothing about Bush's role. Yet you blame only Obama. Furthermore, you deliberately ignored much of the actual argument as to why Bush was the problem and only blame Obama.

Partisan Hack in this regard you are.



Except that we had the same policies back then as well. Furthermore, monetary policy alone won't do this unless it's Weimar Republic type. The real threat is due to the massive debt and the unwillingness of anyone in Government to take a hard stance against it. We are not the Weimar Republic when it comes to printing presses as much of the spending in the past two years was debt financed.

And you deliberately ignore how Bush's policies got us to this point. People were talking about the problems of a weak dollar for years. YEARS. But apparently to you, deliberate policies to weaken the dollar under Republicans is okay!

Wow. One line of criticism. And you did not even mention Bush. Yet in this thread alone you devoted far more time in addition to just bashing Obama.

I guess you're just another Consistency-Free poster.

OK.

Not only was the last post a strawman . . .

THIS post is about moving goalposts. I met your challenges.

You can only respond by criticizing something different, something completely outside the scope of anything I said.

If you're embarrassed by your own hackery here and feel you have to try to cover it up with a flurry of words, well, that's your own problem.
 
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