Dollar loses reserve status to yen & euro

donsutherland1 said:

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.

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You should post more, don. Was it in one of your posts, or perhaps somewhere else, I saw someone write that the world is not going to finance America's appetite for overspending on health care expenditures for very much longer. It's a bite that stuck with me.

I wonder what conditions have to exist before the time for difficult decisions does arrive.

Thanks for the kind words, Jackalope.

IMO, foreigners won't continue to underwrite the growth in U.S. debt, a growing portion of which is projected to be consumed by rising health expenditures, indefinitely without some credible plan for fiscal consolidation for a number of reasons:

1. Risk perceptions. At some point, the risks of doing so will outweigh the benefits. Risks could arise from concern about a full or partial default. A partial default would entail tolerance of inflation, a greater resort to the monetary printing presses, or a chronically falling dollar that undercuts returns on investments made by foreigners in the U.S.

2. Globalization. Globalization is leading to a wider range of opportunities for investment. Some of those opportunities will compete with those in the U.S. for international capital. Treasurys will, over time, play a lesser role in the context of that broadening investment environment. Such a development would occur even if actual or perceived U.S. risks remained unchanged. Increased risk perceptions could accelerate such a trend.

3. A gradually diminishing role of the U.S. dollar. With increasing economic development in China and India, and Asia's economies accounting for a steadily larger role in world output, the role of the dollar as the world's reserve currency is slowly eroding. The recent financial crisis and recession may have accelerated that secular trend. Should Latin America see robust and sustained growth develop, that situation could also strengthen the secular trend. With sound public and monetary policy and increased investment in education, Brazil has genuine potential to become an economic "breakout" state. Overall, that secular trend concering the U.S. dollar will also lead to relative increases in non-dollar-denominated assets. Although I suspect that the evolution toward a broader basket of currencies performing as a global reserve currency or some instrument based on such a basket is probably more likely than not in the long-term due to the U.S. economy's share of global output becoming smaller, the transition need not be messy. Bad policy, high risk, partial default, and failure to remedy the structural flaws in the U.S. financial system are ingredients that could lead to a messy outcome.

Having said all that, one should not automatically assume a "declinist" outlook for the U.S. With good public policy, a smart regulatory system, and sustained investments in education, the U.S. can still remain an economic, military, and political leader on the world stage. It can still enjoy a lot of opportunity and the rewards realizing such opportunities can bring. Such an approach will entail among the following components: a credible fiscal consolidation plan; regulatory reform in the financial sector; and health care reform that substantially reduces the incidence of uninsured persons, is budget-neutral, and slows the growth in long-term health expenditures and costs to levels consistent with the nation's overall economic growth; and, strong investments in education aimed at increasing the nation's overall educational attainment, particularly among populations where college graduation rates are badly lagging (students from families whose parents did not graduate from college or have low-incomes, underrepresented minorities, etc.).

All this talk of officials to blame and Alan Greenspan's name hasn't come up once?

Lord Voldemort said:

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.

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The best thing is just to utilize capitalism to create overspending and complete burning out of resources as soon as possible, and make sure there are huge inequality between people. When the model is crashing and resources burning out and the model prove unstable, unreliable and unsustainable, then the best thing is certainly to pretend everything is ok, and burn more paper to keep the overspending unsustainable situation going right up until the point where everything just have to collapse in total and full.

But then again, anyone who believe that is stupid in the economists who learned their trade in a different world and time, some 10-30 years ago, and certainly do not want to make sure they can steal as much money(labour) from the masses as they can before they leave them to die. :shock:

drz-400 said:

All this talk of officials to blame and Alan Greenspan's name hasn't come up once?

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Nobody is to blame. The model is to blame, capitalism created all those individuals one "could" want to blame in theory. A model for greed breeds greed. Aint their fault they followed the idiot model.

Maximus Zeebra said:

Nobody is to blame. The model is to blame, capitalism created all those individuals one "could" want to blame in theory. A model for greed breeds greed. Aint their fault they followed the idiot model.

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Until you provide specific well thought examples that support your assertion (it was the "model"), i am going to call you on talking out of your ass. Care to be a bit more specific?

Goldenboy219 said:

Until you provide specific well thought examples that support your assertion (it was the "model"), i am going to call you on talking out of your ass. Care to be a bit more specific?

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Ok.. Can I just do that by asking a question?
I assume yes..

Who do you blame for the crisis? A bunch of people like politicians, Alan Greenspan, a bunch of bankers or so fourth, or do you blame the model who created these monsters and circumstances?

I blame the latter.

Maximus Zeebra said:

Ok.. Can I just do that by asking a question?
I assume yes..

Who do you blame for the crisis? A bunch of people like politicians, Alan Greenspan, a bunch of bankers or so fourth, or do you blame the model who created these monsters and circumstances?

I blame the latter.

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Blame is not the issue, and seems to be a sideshow for those who relish in ideological mudslinging.

The Chinese premier Deng Xiaoping might one day be considered the most important person of the 20th century, in reforming the Chinese economy to mimic a capitalist market orientated economy, thereby lifting the standard of living for over a billion people.

To argue that the Chinese were better off under a Maoist "model" is utterly ridiculous, as is your position.

From Wiki:

Economic reforms started since 1978 have helped lift millions of people out of poverty, bringing the poverty rate down from 53% of the population in the Mao era to 12% in 1981. Deng's economic reforms are still being followed by the CPC today and by 2001 the poverty rate became only 6% of the population.

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Goldenboy219 said:

Blame is not the issue, and seems to be a sideshow for those who relish in ideological mudslinging.

The Chinese premier Deng Xiaoping might one day be considered the most important person of the 20th century, in reforming the Chinese economy to mimic a capitalist market orientated economy, thereby lifting the standard of living for over a billion people.

To argue that the Chinese were better off under a Maoist "model" is utterly ridiculous, as is your position.

From Wiki:

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I never argued China were better off under a Maoist "model"..

If claims about what the other believes is how this exchange of post is going to work, then a further discussion is uninteresting and not worth it. In that case end of discussion.

Maximus Zeebra said:

I never argued China were better off under a Maoist "model"..

If claims about what the other believes is how this exchange of post is going to work, then a further discussion is uninteresting and not worth it. In that case end of discussion.

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Neither is the case. You condemn market orientated (profit maximizing agents) and yet when one puts forth evidence that capitalism is really not the evil you deem it to be, end of discussion?

:bon_voyag

Harshaw said:

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.

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He should point his magic gun at his own head. :lol:

Goldenboy219 said:

Neither is the case. You condemn market orientated (profit maximizing agents) and yet when one puts forth evidence that capitalism is really not the evil you deem it to be, end of discussion?

:bon_voyag

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Yes. I do that.. Because the model do not work, which will be proven to you when China takes over and progresses on a non-maximize profit model, but a max progress model. China I believe will take capitalism out of the patent driven model, where progress is sacrificed for maximum profit and exploitation.

Capitalism has existed for thousands of years. Where did it get us? Look at the mess of a world we live in. Say with you hand on the heart that capialism is a fair model, which brings to all people a decent living situation, maximizes progress, and organizes society.

If you can say that, then you lie.


PS. Africa is the most capitalistic continent in the world.

Maximus Zeebra said:

Yes. I do that.. Because the model do not work, which will be proven to you when China takes over and progresses on a non-maximize profit model, but a max progress model. China I believe will take capitalism out of the patent driven model, where progress is sacrificed for maximum profit and exploitation.

Capitalism has existed for thousands of years. Where did it get us? Look at the mess of a world we live in. Say with you hand on the heart that capialism is a fair model, which brings to all people a decent living situation, maximizes progress, and organizes society.

If you can say that, then you lie.


PS. Africa is the most capitalistic continent in the world.

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You get this out of a European school book or something? Africa is capitalist, and since they suck capitalism sucks? Oh it's just that simple isn't it?

American said:

You get this out of a European school book or something? Africa is capitalist, and since they suck capitalism sucks? Oh it's just that simple isn't it?

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Africa is just the purest example of capitalism. And look at the mess. The very few exploit the **** out of the masses and leave them in disasterous conditions. And those very few are mostly not Africans at all, they are American and European capialists who suck the **** out of the whole African continent.

At home these same capitalists exploit the **** out of the people and leave them in a situation where the majority have to work most of their "life", and never have enough to secure their own freedom.

If it wasnt for the capitalists who steal our money/labor, the people would not have to work more than 20 hour weeks on average to accomplish the same that we do now with 40+ hours per week on average.

Maximus Zeebra said:

Africa is just the purest example of capitalism. And look at the mess. The very few exploit the **** out of the masses and leave them in disasterous conditions. And those very few are mostly not Africans at all, they are American and European capialists who suck the **** out of the whole African continent.

At home these same capitalists exploit the **** out of the people and leave them in a situation where the majority have to work most of their "life", and never have enough to secure their own freedom.

If it wasnt for the capitalists who steal our money/labor, the people would not have to work more than 20 hour weeks on average to accomplish the same that we do now with 40+ hours per week on average.

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Communism is the way!!!! Love Lenin comrade! Show me some sources to prove your assertions. Oh, btw and this has what to do with the reserve currency?

Maximus Zeebra said:

Yes. I do that.. Because the model do not work, which will be proven to you when China takes over and progresses on a non-maximize profit model, but a max progress model. China I believe will take capitalism out of the patent driven model, where progress is sacrificed for maximum profit and exploitation.

Click to expand...

You are kidding right? The human rights abuse in China is unparalleled; and all in the name of profit, specifically profit for the state. The government devalues the purchasing power of their citizens currency so to maximize their export capability. To speculate into whether their current economic system will transform into a "progress oriented model" is rather odd given where they seem to be headed.

Capitalism has existed for thousands of years. Where did it get us? Look at the mess of a world we live in. Say with you hand on the heart that capialism is a fair model, which brings to all people a decent living situation, maximizes progress, and organizes society.

Click to expand...

Markets have existed for thousands of years, but the concept of capitalism is relatively new.

If you can say that, then you lie.

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The capitalist intent is not to bring all people a decent living situation, et al. You can claim a system that does so is superior, but will have very little in regards to proof that a system that does not center on profit motive will improve all of society.

One of the notions currently being bastardized is that the Netherlands is somehow a socialist utopia when reality dictates that could be any farther from the truth. Whilst it is true that the Netherlands offers a rather generous welfare entitlement to those in need, the profit motive (not welfare benefits) is still the driving force behind their economy and their tax base where the government is able to provide services to such a small population.

With the the vast differences in demographics and size, to expect a similar centralized system within the US is nothing more than wishful thinking.

PS. Africa is the most capitalistic continent in the world.

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Africa is one of the least transparent and most corrupt area's in the world. Capitalism is based on competition and the pricing mechanism reaching equilibrium that is determined on producer/consumer decision making. Given that Africa uses weapons and war as a means of competition rather than productivity and opportunity cost, the notion that Africa is the most capitalistic country in the world is rather mind boggling.

Goldenboy219 said:

Africa is one of the least transparent and most corrupt area's in the world. Capitalism is based on competition and the pricing mechanism reaching equilibrium that is determined on producer/consumer decision making. Given that Africa uses weapons and war as a means of competition rather than productivity and opportunity cost, the notion that Africa is the most capitalistic country in the world is rather mind boggling.

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Law, order and liquidity, all that Africa lacks. Blaming capitalism wont solve their problems.

Harshaw said:

OK.

Not only was the last post a strawman . . .

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

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If you say so.

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

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Are you trying to imitate Navy Pride?

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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I'm a partisan hack....by considering both parties bad for the same practices while you consider only one party bad for the same practices?

How does that work?

Can you define "Hypocrite" for me?

American said:

Communism is the way!!!! Love Lenin comrade! Show me some sources to prove your assertions. Oh, btw and this has what to do with the reserve currency?

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Currencies shouldnt exist. One should pay a basket of goods by units of labour. The difference between maximum and minimum value of labour should be minimized.. Thats what this has to do with currency..

And no. Communism as you think of it is no alternative. The only alternative is a common sense mix of different models.

But lets redefine communism in your minds for a second anyways from meaning "evil Stalin Soviet mass murder etc etc", to the actual meaning, "all for one, in community we live TOGETHER, not AGAINST each other". Thats the core idea from communism, that should live on. The "selfish greed go it alone, everything for myself **** the rest" part of capitalism should be disposed of alltogether.

Goldenboy219 said:

You are kidding right? The human rights abuse in China is unparalleled; and all in the name of profit, specifically profit for the state. The government devalues the purchasing power of their citizens currency so to maximize their export capability. To speculate into whether their current economic system will transform into a "progress oriented model" is rather odd given where they seem to be headed.

Click to expand...

Chinas capitalism purely believes in progress. US capitalism purely believe in profit.

The Chinese dont give a flying **** if they can squeeze paper value and computer digits out of a product, the only aim of their model is to use it for progress, and use capitalism against all other states to progress against them.

THe US model is just completely invalid, it revolves around building aircastles to create the biggest piles of paper with print on them, and completely overlooks the progress part of capitalism, in favour of pleasure and ability for doing nothing/laziness, which is the ultimate goal of American capitalism.

Goldenboy219 said:

Markets have existed for thousands of years, but the concept of capitalism is relatively new.

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Capitalism has existed for ages, markets have existed as long as humans have been intelligent.

Goldenboy219 said:

The capitalist intent is not to bring all people a decent living situation, et al. You can claim a system that does so is superior, but will have very little in regards to proof that a system that does not center on profit motive will improve all of society.

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Actually, the contrary is proving right. Seemingly, the US is now going to be the first undeveloping country, Europe is following. Capitalist success brings definete decline, because the will to work, the will for effort, the will for improvement dries out in an orgie of pleasures, speculation, and schemes. Real wealth has and is at currently moving from the west to the east. In the future, we are poor, they rich.

Just look at western society and what will be left when we are stuck paying for our past mistakes, when education levels are going down, most of the population is useless at doing anything, much of the population has no ability to do anything. Then we are just a worthless society in decline. The west is going dumb, lazy, uneducated, unhealthy and the decline is continuous.

Goldenboy219 said:

One of the notions currently being bastardized is that the Netherlands is somehow a socialist utopia when reality dictates that could be any farther from the truth. Whilst it is true that the Netherlands offers a rather generous welfare entitlement to those in need, the profit motive (not welfare benefits) is still the driving force behind their economy and their tax base where the government is able to provide services to such a small population.

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That is not the problem. The problem at the moment is governance, the second problem is sustainability, and the third stable progress. We need a semi-government, semi-private market with strick regulations, no individuals in power, no parties, just the people deciding. Labour+value based payment and market system. We need a market free of speculations with set terms. Fluctuating values to make up for a faulty model is wrong. We need to set permanent conditions and work around those. Our values must be based around the totality of the progress of society, not around gambling and speculation.
Food and water safety, property, social security must be controlled by the people in governance and be the only role of governbment, the market free, but priced in labour. Transparancy is the only way to go, and anti corruption measures must be built into any post revolution government.. Yes, revolution.. Thats the only solution against the corruption which is going on in governance now.

Goldenboy219 said:

With the the vast differences in demographics and size, to expect a similar centralized system within the US is nothing more than wishful thinking.

Click to expand...

We cannot look to any system for a solution, we must rebuild and recreate the system. We cannot let the few slave the rest. We all need to change, not only the US system, we must have a complete and utter political revolution in the west to avoid a meltdown of our society and core values(the ones independent on the system).

Goldenboy219 said:

Africa is one of the least transparent and most corrupt area's in the world. Capitalism is based on competition and the pricing mechanism reaching equilibrium that is determined on producer/consumer decision making. Given that Africa uses weapons and war as a means of competition rather than productivity and opportunity cost, the notion that Africa is the most capitalistic country in the world is rather mind boggling.

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Africa is all about money, its all about short profit, Africa is very transparent. All you have to do is steal by force, either as government, organisation, group or individuals. Its far more transparent than the western crook system.

Djoop said:

Law, order and liquidity, all that Africa lacks. Blaming capitalism wont solve their problems.

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We, the capialists of the west, raped and robbed the African continent. Its the most capialist history ever.
Certainly capitalism is to blame for African missery...

But you are right. It will not solve their problem..

Thomas Sankara was solving their problems, yet he was killed(probably by the capialist French)...

Maximus Zeebra said:

Chinas capitalism purely believes in progress. US capitalism purely believe in profit.

The Chinese dont give a flying **** if they can squeeze paper value and computer digits out of a product, the only aim of their model is to use it for progress, and use capitalism against all other states to progress against them.

THe US model is just completely invalid, it revolves around building aircastles to create the biggest piles of paper with print on them, and completely overlooks the progress part of capitalism, in favour of pleasure and ability for doing nothing/laziness, which is the ultimate goal of American capitalism.



Capitalism has existed for ages, markets have existed as long as humans have been intelligent.




Actually, the contrary is proving right. Seemingly, the US is now going to be the first undeveloping country, Europe is following. Capitalist success brings definete decline, because the will to work, the will for effort, the will for improvement dries out in an orgie of pleasures, speculation, and schemes. Real wealth has and is at currently moving from the west to the east. In the future, we are poor, they rich.

Just look at western society and what will be left when we are stuck paying for our past mistakes, when education levels are going down, most of the population is useless at doing anything, much of the population has no ability to do anything. Then we are just a worthless society in decline. The west is going dumb, lazy, uneducated, unhealthy and the decline is continuous.




That is not the problem. The problem at the moment is governance, the second problem is sustainability, and the third stable progress. We need a semi-government, semi-private market with strick regulations, no individuals in power, no parties, just the people deciding. Labour+value based payment and market system. We need a market free of speculations with set terms. Fluctuating values to make up for a faulty model is wrong. We need to set permanent conditions and work around those. Our values must be based around the totality of the progress of society, not around gambling and speculation.
Food and water safety, property, social security must be controlled by the people in governance and be the only role of governbment, the market free, but priced in labour. Transparancy is the only way to go, and anti corruption measures must be built into any post revolution government.. Yes, revolution.. Thats the only solution against the corruption which is going on in governance now.





We cannot look to any system for a solution, we must rebuild and recreate the system. We cannot let the few slave the rest. We all need to change, not only the US system, we must have a complete and utter political revolution in the west to avoid a meltdown of our society and core values(the ones independent on the system).




Africa is all about money, its all about short profit, Africa is very transparent. All you have to do is steal by force, either as government, organisation, group or individuals. Its far more transparent than the western crook system.

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You do not make any... i repeat... any...****ing sense. I would reply to your statements but what is the point? You are not going to reply to anything i state. Completely ignoring the human rights abuses that are going on every day, in the name of profit, and then state China is about progress is full of ****. Im talking to the point where i have to stand back and cover my nose and mouth so not to be exposed to its stench.

Your inability to view anything except for Utopian Marxism as a positive sum game will continue to plague all aspects of your analysis of economic systems.

Strictly speaking, i would not be at all surprised if you were completely drunk right now.

Goldenboy219 said:

You do not make any... i repeat... any...****ing sense. I would reply to your statements but what is the point? You are not going to reply to anything i state. Completely ignoring the human rights abuses that are going on every day, in the name of profit, and then state China is about progress is full of ****. Im talking to the point where i have to stand back and cover my nose and mouth so not to be exposed to its stench.

Your inability to view anything except for Utopian Marxism as a positive sum game will continue to plague all aspects of your analysis of economic systems.

Strictly speaking, i would not be at all surprised if you were completely drunk right now.

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Nice way to debate.. End of discussion..

I could also write some cheesy post like this about your bull****, but thats not a debate.


Soooo... Booooooring.. :2wave:

Maximus Zeebra said:

Nice way to debate.. End of discussion..

I could also write some cheesy post like this about your bull****, but thats not a debate.

Soooo... Booooooring.. :2wave:

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You do not debate, instead you use subjective inaccuracies and opinions as a premise for your opinion.

State some facts from time to time, that back up your assertions, otherwise they going to continue falling apart at the waist side.

Example: (and lets just start here)

Capitalist success brings definete decline, because the will to work, the will for effort, the will for improvement dries out in an orgie of pleasures, speculation, and schemes.

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Do have anything in the realm of facts to back up this opinion?

Goldenboy219 said:

You do not debate, instead you use subjective inaccuracies and opinions as a premise for your opinion.

State some facts from time to time, that back up your assertions, otherwise they going to continue falling apart from the waist side.

Example: (and lets just start here)



Do have anything in the realm of facts to back up this opinion?

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Uninteresting.. This is just getting boring again.. You have no sense of reality, and when somebody elses opinion contradicts your own, you just pull ****ty cards and run out of the building without answering anything.