View Poll Results: What do you think about the economic situation in the US?

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  • Everything is completely falling apart, there is nothing we can do now.

    4 10.53%
  • Everything is falling apart fast, if we act fast we can stop a collapse.

    5 13.16%
  • Its dier, we need to do something quickly.

    4 10.53%
  • Bush is the cause of this decline, he must resign now.

    4 10.53%
  • The dollar will do the work, everything will even out over time.

    5 13.16%
  • We will manage it, but it will take time and missery.

    9 23.68%
  • Its alright, shouldnt be to difficult to fix.

    0 0%
  • Everything is fine as it is.

    3 7.89%
  • Other.. (explain)

    2 5.26%
  • Everything is the fault of John Kerry..

    2 5.26%
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Thread: The fall of the dollar..

  1. #1
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    The fall of the dollar..

    The dollar is now at its lowest value since the collapse of the 1971 and the gold standard.
    1€ is now worth around 1.35$, 1 British pound is now worth around 2$..

    Just from the currency fall alone the European economy has grown from 14.25 trillion to 14.85 trillion. This is the numbers of the end of last year, and real growth is not taken into consideration, which would bring it at around 15 trillion.

    The US economy is shrinking with a falling dollar, which is trying to compensate the huge gap between import and export by falling. I wouldnt be surprised to see the REAL value of the dollar at 1.5-1.75 to the Euro and 2.25-2.5 to the pound.
    By real value I mean the value where the imports and export is synced at around the same level, and how low the dollar has to fall for this to happen.
    Not only will the falling dollar lead to a decline of purchasing power in the US as imports will be far more expensive, but as a result the whole economy might go into recession and outright decline. The federal reserve is trying to keep the US economy attractive by raising interest rates, but having a 10-15% interest rate in the US when the dollar hit the REAL value wouldnt be very healthy for the economy, so it can only go so far, and when it stops it will be felt in the pockets of the people in the US.

    Economic conditions and sentiment in the US is very bad, and I think all of you will agree with me when I say this is the fault of the current US administration. They turned a perfectly good cherry red situation after Clinton into economic crisis, that all Americans now will feel the coming decade.
    Im not saying this is the fault of Bush alone, but his whole administration is incompetent and should walk out of their offices in shame when Obama takes over. A heck of a large job is left for the next president, lets hope he can handle it..

    What he should do:
    1. Remove the troops from Iraq, which will slice away 100 billion in spending annually.
    2. Reduce military spending to 2000(pre Bush) levels, this will save around 150 billion every year.
    3. Use that money to pay down trade debt, which will stabilize the situation slightly.
    4. Work his *** of to make trade deficit non existent without crushing the dollar while doing so. This means slicing imports and increasing exports, the difference is around 850 billion annually, so it will take awhile..


    Good luck to the next president, and may this current administration walk in shame their whole lives, and may history remember them as the true fools they were.
    Europe is illegally occupied by the US

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    Re: The fall of the dollar..

    Obviously you have very little understanding of economics. The decline in value of the dollar doesn't automatically translate into a decline in the economy.

    Quote Originally Posted by Maximus Zeebra View Post
    Economic conditions and sentiment in the US is very bad, and I think all of you will agree with me when I say this is the fault of the current US administration.
    Not really. The president has very little control over the economy in the short term. He can make changes that will have long-term consequences on the overall state of the economy, but he isn't responsible for individual recessions and booms.

    Quote Originally Posted by Maximus Zeebra
    What he should do:
    1. Remove the troops from Iraq, which will slice away 100 billion in spending annually.
    True, but it has nothing at all to do with the value of the dollar.

    Quote Originally Posted by Maximus Zeebra
    3. Use that money to pay down trade debt, which will stabilize the situation slightly.
    Umm the government can't just choose to "pay down" the trade deficit. The trade deficit is what it is; only private businesses and individuals exporting more and/or importing less would reduce it.

    Who exactly would the government write the check to, if they were going to pay down the trade deficit?

    Quote Originally Posted by Maximus Zeebra
    4. Work his *** of to make trade deficit non existent without crushing the dollar while doing so. This means slicing imports and increasing exports, the difference is around 850 billion annually, so it will take awhile..
    Ya, because the amount of goods/services that people export and import is really something that the president can control.

    The ONLY tool he has at his disposal to deal with the trade balance is the value of the dollar. So this suggestion doesn't make any sense.
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    Re: The fall of the dollar..

    Our economy is going down the toilet, but there is still a chance that it can be saved.
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    Religion is the impotence of the human mind to deal with occurrences it cannot understand.

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    Re: The fall of the dollar..

    Quote Originally Posted by Maximus Zeebra
    3. Use that money to pay down trade debt, which will stabilize the situation slightly.
    That will only worsen the situation. I'm assuming you meant the federal debt, because the trade deficit cannot be "paid" in that gait. If the US government reduces spending and actually have a surplus, it will only alleviate the crowding effect, increasing the supply of US dollars in the international market and exacerbating the deprecation of the dollar.
    To each to how much he benefits other who have the resources for benefiting those who benefit them.

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    Re: The fall of the dollar..

    Quote Originally Posted by Synch View Post
    That will only worsen the situation. I'm assuming you meant the federal debt, because the trade deficit cannot be "paid" in that gait. If the US government reduces spending and actually have a surplus, it will only alleviate the crowding effect, increasing the supply of US dollars in the international market and exacerbating the deprecation of the dollar.
    Yes, sorry, I meant the federal debt.
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    Re: The fall of the dollar..

    Quote Originally Posted by Kandahar View Post
    Obviously you have very little understanding of economics. The decline in value of the dollar doesn't automatically translate into a decline in the economy.
    Yes it does, in the US it does.. How do you expect to sync export and imports without the falling dollar? The dollar falls, make everything the US imports more expensive and everything from the US cheaper for others. Now, your imports will probably have to meet exports somewhere around 1.3 trillion. This means US imports will have to fall 500 billion. Is that not a decline? Consumers? Consumer prices? Etc etc...


    Quote Originally Posted by Kandahar View Post
    Not really. The president has very little control over the economy in the short term. He can make changes that will have long-term consequences on the overall state of the economy, but he isn't responsible for individual recessions and booms.
    Not really, he have good control of the economy.. How come Clinton managed to have a great economy behind him, while Bush have a broken it?
    Bush and his administration have choosen to spend 250 billion € annually extra on war since he became president. This money could have been used way better to stimulate US businesses and increase exports.


    Quote Originally Posted by Kandahar View Post
    True, but it has nothing at all to do with the value of the dollar.

    Umm the government can't just choose to "pay down" the trade deficit. The trade deficit is what it is; only private businesses and individuals exporting more and/or importing less would reduce it.
    Who exactly would the government write the check to, if they were going to pay down the trade deficit?
    Yes it does.. Sorry I was meaning the federal debt.
    100 billion spent to stimulate US businesses instead of wasted in Iraq could do a lot for the US dollar, exports and imports. 250 billion could do even more.


    Quote Originally Posted by Kandahar View Post
    Ya, because the amount of goods/services that people export and import is really something that the president can control.
    Yes, he can.. Money spent differently could make a huge difference. Just look at Germany for example.. Despite a far higher value of the Euro, German export is exploding, growing fast.


    Quote Originally Posted by Kandahar View Post
    The ONLY tool he has at his disposal to deal with the trade balance is the value of the dollar. So this suggestion doesn't make any sense.
    Yes, let the interest rates stand and let the dollar fall quicker.

    1.50-1.75 against the € and 2.25-2.5 against the Brit pound is the REAL value of the dollar.. By then the EU economy will be 16-19 trillion $ large, and we will have a higher Per capita GDP..

    Just to twist it around a bit..
    The US economy is around 10.5 trillion € and will then have fallen to around 8-9 trillion €.

    So all in all, the artificial US economy will be valued at its correct value when the dollar hit its REAL value when the export/imports are the same.
    Europe is illegally occupied by the US

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    Re: The fall of the dollar..

    "The almighty dolla, aint what it used to be. Hobos used to ask you fo a dolla now the motha****as ask ya for three. The almighty dolla, well that's what they used to say. One dolla used to be a whole lot but it's hardly worth **** today."
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  8. #8
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    Re: The fall of the dollar..

    Quote Originally Posted by faminedynasty View Post
    "The almighty dolla, aint what it used to be. Hobos used to ask you fo a dolla now the motha****as ask ya for three. The almighty dolla, well that's what they used to say. One dolla used to be a whole lot but it's hardly worth **** today."
    --Devin the Dude
    What can you get for 1$ in the US? Just for comparison to Europe and 1€.
    What about 10$?
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  9. #9
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    Re: The fall of the dollar..

    Quote Originally Posted by Maximus Zeebra View Post
    Yes it does, in the US it does.. How do you expect to sync export and imports without the falling dollar? The dollar falls, make everything the US imports more expensive and everything from the US cheaper for others.
    No kidding. Why is that necessarily a bad thing?

    Quote Originally Posted by Maximus Zeebra
    Now, your imports will probably have to meet exports somewhere around 1.3 trillion. This means US imports will have to fall 500 billion. Is that not a decline? Consumers? Consumer prices? Etc etc...
    No, it's not a decline. It's not that people will go without the products that they would've imported, they'll just buy them somewhere domestically. And the increase in exports will create more domestic jobs, which would be a net plus to the economy to cancel any net minus from the loss of imports.

    Quote Originally Posted by Maximus Zeebra
    Not really, he have good control of the economy.. How come Clinton managed to have a great economy behind him, while Bush have a broken it?
    Clinton certainly helped it by favoring an explosion of free trade, but in the end it was mostly just luck. Clinton was president when communism had just collapsed and the internet was becoming prominent.

    The idea that the President can control the short-term state of the economy is just silly. What exactly do you think he can do?

    Quote Originally Posted by Maximus Zeebra
    Bush and his administration have choosen to spend 250 billion € annually extra on war since he became president. This money could have been used way better to stimulate US businesses and increase exports.
    1. 250 billion is chump change compared to the size of the US economy. Of course it can be put to better use; that doesn't mean that the amount of money spent has the slightest impact on the US economy.
    2. Corporate welfare is a stupid economic policy. Why in the world should the government "stimulate US businesses"?
    3. The government can't just write a check to increase exports, as I've already mentioned.

    Quote Originally Posted by Maximus Zeebra
    Yes, he can.. Money spent differently could make a huge difference.
    Congress controls the budget here, not the President.

    Quote Originally Posted by Maximus Zeebra
    Just look at Germany for example.. Despite a far higher value of the Euro, German export is exploding, growing fast.
    The value of the euro doesn't matter, it's the change in the value of the euro. Has it appreciated relative to all other currencies?

    Quote Originally Posted by Maximus Zeebra
    Yes, let the interest rates stand and let the dollar fall quicker.

    1.50-1.75 against the € and 2.25-2.5 against the Brit pound is the REAL value of the dollar.. By then the EU economy will be 16-19 trillion $ large, and we will have a higher Per capita GDP..

    Just to twist it around a bit..
    The US economy is around 10.5 trillion € and will then have fallen to around 8-9 trillion €.

    So all in all, the artificial US economy will be valued at its correct value when the dollar hit its REAL value when the export/imports are the same.
    I hereby award you a BS in Statistics.

    If you measure every GDP in the world in terms of your home currency, you'll get a distorted view of the actual purchasing power of various countries. By this logic, if the US dollar depreciated by 10% against the Euro in a single year (not unusual), it would mean that the US economy had shrunk by 10%! Currency exchange rates are very volatile. Developed economies, for the most part, are not.
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  10. #10
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    Re: The fall of the dollar..

    Quote Originally Posted by Kandahar View Post
    No kidding. Why is that necessarily a bad thing?
    That which you quoted is a very good thing..

    Quote Originally Posted by Kandahar View Post
    No, it's not a decline. It's not that people will go without the products that they would've imported, they'll just buy them somewhere domestically. And the increase in exports will create more domestic jobs, which would be a net plus to the economy to cancel any net minus from the loss of imports.
    This is the bad thing.. Its actually a good thing, but it will feel like a bad thing when US inflation is at an exceptional high level.

    Quote Originally Posted by Kandahar View Post
    Clinton certainly helped it by favoring an explosion of free trade, but in the end it was mostly just luck. Clinton was president when communism had just collapsed and the internet was becoming prominent.
    Luck, yeah sure.. Thats why everything started looking good a time after Clinton entered office, and imrpoved as long as he was there..

    Then Bush came to office and lowered taxes and introduced economical madness and neglect. Everytihing pointed downwards and the relative US economy has gone backwards during the Bush term. EXCEPT Gdp per capita that has just slowed down, but not decreased.

    Quote Originally Posted by Kandahar View Post
    The idea that the President can control the short-term state of the economy is just silly. What exactly do you think he can do?
    I dont know, he can have a responsible fiscal policy, spend things on healthy issues instead of wars for example.. Since 2000, the US have spent about 200 billion a year extra in everage on war and the military. Now this over say 6 years since we exclude 2000, is about 1.2 trillion$ that could have been spent better.. Now that is half a US government spending.. Us government spending for your information is around 2.5 trillion$ annually. The US GDP is over 10 trillion, yes..
    Now, dont you think a president have some power over the economy?


    Quote Originally Posted by Kandahar View Post
    1. 250 billion is chump change compared to the size of the US economy. Of course it can be put to better use; that doesn't mean that the amount of money spent has the slightest impact on the US economy.
    2. Corporate welfare is a stupid economic policy. Why in the world should the government "stimulate US businesses"?
    3. The government can't just write a check to increase exports, as I've already mentioned.
    1. No its not, its 1/10th of government budget/spending. Imagine if that money was spent on social issues instead, the US would look completely different today. Imagine if that money was spent to subsidise renewable energy or environmental friendly technology.. Things would be completely different..
    2. Not corporate welfare, corporate insentives.. Imagine GM getting paid to switch from fossil to environmental friendly energy in their cars..just one example there of possibly millions. Now, what could 250 billion do in R&D?
    3. I never said that.


    Quote Originally Posted by Kandahar View Post
    Congress controls the budget here, not the President.
    Fair enough, but the president shouldt have asked congress for so much extra on war and military.

    Quote Originally Posted by Kandahar View Post
    The value of the euro doesn't matter, it's the change in the value of the euro. Has it appreciated relative to all other currencies?
    Basically, yes it has.. But mostly it has apreciated against the dollar which is our main export market. Of course the Euro value matters greatly.. Any given thing now bought from the US is about 50% cheaper than it was at the low point of the Euro. Big difference between 1€ being worth 1.35$ and one that is only worth 0.8$ which it was at the lowest point.


    Quote Originally Posted by Kandahar View Post
    I hereby award you a BS in Statistics.
    Lol, perhaps you should try to understand what i am actually saying the instead of giving me that award because of your lack of knowledge.

    Quote Originally Posted by Kandahar View Post
    If you measure every GDP in the world in terms of your home currency, you'll get a distorted view of the actual purchasing power of various countries. By this logic, if the US dollar depreciated by 10% against the Euro in a single year (not unusual), it would mean that the US economy had shrunk by 10%! Currency exchange rates are very volatile. Developed economies, for the most part, are not.
    What you have to understand is that the world is now a two(big) currency market, not 1 like it has been since the 1970s. This is a HUGE difference. GDP and numbers have always been compared in USD, they still are. And when the Euro fluctuate against the dollar, this doesnt mean that nothing happens like you wish. It means an appreciation of the whole European economy, and a decline of the US economy. Remember those 850 billion$ annually the US is strugelling with? The relationship between that, the value of the dollar and the value of the Euro and the Euro area difference is all related.
    The REAL value of the dollar is shown when the dollar reach that level that will even out imports and export. That is the REAL/Natural value of the dollar against other currencies. The two currency market has brought huge changes to the whole world economy that it makes this MUCH more obvious and visible, before the US could basically maniupate the dollar like they wanted. Now they cannot anymore, and it means the US economy will be valued in REAL terms against other economies when the dollar hits its natural value..

    The Euro is at natural value, because Eurozone imports and exports have a difference of about 0 annually. +- a few billions.
    The Pound is overvalued the same way the dollar is.

    Lets theoretically say that the REAL value of the dollar is 1.65$ = 1€.. The real value again is when Imports and exports in the US have no difference in value, thats when the dollar is "correctly" valued.. Now.. The EU economy was 10.9 trillion € after Romania and Bulgaria joined, which was start of 2007. The dollar VS the €uro at the time was something like 1.25. That means the EU economy was worth 13.625 trillion $, this is because for comparison economists use the dollar(i could also use the € to demonstrate the exact same thing). With a value that is 1.65 dollars for 1 Euro, the EU economy would be valued at 18 trillion $.. So in reality, the dollar was just overvalued the whole time, and the European economy if measured in the REAL dollar value is something like 18 trillion$..
    Now, here is the clue why this is so... Im not saying production in the EU all of the sudden raised 5 trillion. I am just saying that the valuation of that production has changed, and thats very important in a market with two large currencies that have to fit imports and exports of the representative countries.

    But the Eurozone is not the whole EU economy, it only represent about 90% of it.. But anyways, the numbers are pretty accurate. And the case would be the same, just -10%.

    But, I guess, you Americans just want to keep measuring everyting in 2000 value dollars..
    Europe is illegally occupied by the US

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