The fall of the dollar..

Iriemon · May 2, 2007

Trajan Octavian Titus said:
I've taken Macro and Micro and read alot about the subject so much so that I know the trade deficit has nothing to do with the value of currency and that the value of currency is determined by the amount of money supply and the size of the GDP.

Have to agree with TOT there.

RightOfCenter · May 2, 2007

Iriemon said:
Have to agree with TOT there.

And that right there is how absolutely off base you are Max.

Hatuey · May 2, 2007

RightOfCenter said:
And that right there is how absolutely off base you are Max.

It is in times like this that I am forced to....

Ring* Ring*

**Hatuey picks up his phone.

"Allo?"

"Baby."

"Moma?"

"Yes it's me. Listen. I know you're about to try and defend Zeebra because of the way your friends have been bashing his brains in but please let this one go."

"But moma..."

"Yes baby I know, it's not right but when a man is wrong he's wrong. He has to accept it."

"I know moma, but..."

"Listen son, if you let this one go I promise I'll bring you some burritos next time I come."

"Well...if you put it that way. Fine :3oops: "

"Alright son, say hi to ya Franki"

"K momy love ya"

"Love ya son"

*Click*

As I was saying...

Ring* Ring*

**Hatuey picks up his phone again.

"Hatuey...get yo lil black *** off the thread."

"I'm sorry moma!"

*Click*

Gotta go.

Trajan Octavian Titus · May 2, 2007

Iriemon said:
Have to agree with TOT there.

I think I need a shower. :lol:

DeeJayH · May 2, 2007

Maximus Zeebra said:
What can you get for 1$ in the US? Just for comparison to Europe and 1€.
What about 10$?

Maximus Zeebra said:
That which you quoted is a very good thing..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.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.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. Th US GDP is over 10 trillion, yes..Now, dont you think a president have some power over the economy?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.Fair enough, but the president shouldt have asked congress for so much extra on war and military.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.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.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.. :lol:

Maximus Zeebra said:
Its not certain, but when demand will remain, prices hike and supply dry out, the demand will follow, or the US economy have to compensate somehow.. This would probably be to produce more of that stuff you need back home instead, but that isnt done overnight.. So then your dollar keeps falling, prices for your imports go up, and you have to pay more for the same.. Now, how is that not going to affect inflation?You have this wonderful tendency to ignore what I am REALLY saying and misunderstand my messages.. Of course Clinton was single handedly responsible for the US 1990s economic miracle.. No one else was, just and ONLY Clinton did that alone.. He wouldnt even need a US population or companies, he could do all that alone.Because wasteful spending is wasteful spending, and you have absolutely no understanding of how much have been wasted during the Bush term.. So someone have to tell you..again you try as best you can to misunderstand and you succeed in that..Everything matters in the economy, short term and long term..I didnt say it was a bad thing for the US economy.. I said it was the right thing for the US economy. Maybe you should actually tart reading my posts??:2wave: Of course there are, but there are only two major ones, just 10 years ago there was only 1 major currency.. There are two major ones and five important ones.. The major ones are the dollar and the Euro, the important ones besides those are the Yen, the Pound and the Swizz Franc.But its still a two currency market, before it was a one currency market.Im not saying the Euro will destroy the US economy.. I am just saying its great for US and that our economy just will be so much more appreciated, and correctly appreciated against the US economy when the US dollar hits its REAL value.No its not, the REAL value of the currency is when export and imports are about equal.. What you are talking about is market value..Dont come here and tell me that the real value of google who have a revenue of 5 billion is 400 billion just because the stock market says so.. Thats the market value, not the real value.. In the end, the market value will ALWAYS become more and more the same as the REAL value.In the US, the market tends to overvalue things, while in Europe its valued pretty REAL. In China its undervalued just like their currency..The REAL value of the Chinese ramibi like the dollar is when exports and imports in China is about equal. So currently the Chinese currency is undervalued while the dollar is overvalued. US trade deficit with Europe is about 90 billion€ every year, this means that the US have to adjust the dollar to make that around 0.. And then China have to adjust their currency to reduce European trade deficit(and at the same time US trade deficit)..So actually the best thing would be if both China and US changed their currencies around the Euro, as this would be the easiest way to reach the REAL value..Do you btw understand the concept of GDP ppp and GDP? and how this is related to currencies? The Chinese if they revalue their currency to a REAL value their economy is an 8 trillion $ economy and not a 2 trillion dollar economy like it is now.. Are you saying that such a change is irrelevant and that it should always be measured in 2000 value dollars?The US economy is overvalued, the Chinese one is undervalued..The US dollar is falling, and revaluing the US economy against mainly the European economy at the same time.. The European economy is appreciated, the US depreciated.. Now the last step is to appreciate the Chinese economy a whole 400% and that is the Chinese currency that needs to do this..It will all fit in the end man, but you obviously dont understand the concept of REAL value..I just know that if I was American I would surely put some of my savings in other currencies as well, especially the Euro and the Swizz Franc. Setting them in the Chinese currency is a risk, but could potentially double your money twice if the Chinese currency is correctly revalued.Every economy in the world is now appreciating in comparison to the US.. Think of it as a slowly bursting dot-com bubble. Its not that the Euro is appreciating the most that is the point. The point here is that the US economy is depreciated.. Its difficult to see the big picture in this, especially for a US patriot, but your economy is undergoing a HUGE decline as we speak.Yeah, I prefer that too, but you know the funny thing, usually the market will always realize the REAL value of things, like they are doing now with the US economy..Ps. If you have any stocks in google I would suggest slowly selling them off now, before the market realize the real value of it and burst it like the dot-com market.

Maximus Zeebra said:
:2funny:

The dollar isnt undervalued, its still way overvalued. You can see that by the differences in exports and imports. China have an undervalued currency, and you can also see that in exports and imports differences.
In dollar terms the Chinese economy is still just 2 trillion, while the real value is about 8 trillion.Now, this means the Chinese economy is seriously undervalued while the US economy is overvalued. So in reality, when the dollar and the Ramibi his the right values, it will be like this.US economy 13.5 trillion $Chinese economy 8 trillion $
Eurozone economy 16 trillion $
EU economy 19 trillion $

Thats when the euro hits 1.65 against the dollar.. Thats about the time US exports and imports should approximately equal.Well, the petro age is over.

Maximus Zeebra said:
Yeah, you guys in the US are too ***** to handle any real competition, so you let the value of the dollar fall and make the US economy smaller and smaller compared to the Euro economy.
The US economy is shrinking against almost all economies..

Maximus Zeebra said:
Maybe its time to do some more economic research? Perhaps you should take some kind of course in basic economics.

Maximus Zeebra said:
Yeah, because debating is like American wrestling.

:3oops: I am sorry!
did you say something?:doh

Maximus Zeebra · May 3, 2007

Trajan Octavian Titus said:
I've taken Macro and Micro and read alot about the subject so much so that I know the trade deficit has nothing to do with the value of currency and that the value of currency is determined by the amount of money supply and the size of the GDP.

Yes it does, in a market economy, people will buy less with a low value dollar, exports will fall, and people from foreign countries will buy more from the US, since things are cheaper.

And yeah, just to your information, a trade surplus is a nice money SUPPLY.

Trajan Octavian Titus · May 3, 2007

Maximus Zeebra said:
Yes it does, in a market economy, people will buy less with a low value dollar, exports will fall, and people from foreign countries will buy more from the US, since things are cheaper.

The U.S. has intentionally undervalued their currency and so has China which is about 100 years behind us on the industrialized scale.

And yeah, just to your information, a trade surplus is a nice money SUPPLY.

A service based industry is way better, we have evolved on the capitalist chain, labor is pretty much a non-factor, we're a service based economy with a higher GDP than any country or group of countries put together.

Maximus Zeebra · May 3, 2007

Trajan Octavian Titus said:
The U.S. has intentionally undervalued their currency and so has China which is about 100 years behind us on the industrialized scale.

A service based industry is way better, we have evolved on the capitalist chain, labor is pretty much a non-factor, we're a service based economy with a higher GDP than any country or group of countries put together.

The US dollar is overvalued. Thats the point and its indisputable.

Why are you mixing service economy into this?

And you are wrong, the Eurozone-13 is a larger economy than the US.. Not only that, the EU-27 is 1/10th larger than that again..

China is valued at 2 trillion $ in GDP terms while in GDP puchasing power parity the Chinese economy is worth 8 trillion.. With exports of 700 billion a year its more likely Chinas economy is worth 8 trillion than 2 trillion.

All these relations are playing in, which is why the US dollar is loosing value, and the interests in the US is just about keeping the bubble from bursting.

Now, the US exports have to grow, while their import has to decline.. Their dollar is falling now to close the GAP, as long as the gap is so wide the US currency is wrongly valued.

Now the falling dollar has made the EU-27 economy approximately 14.5 trillion $(in comparison to the US).

RightOfCenter · May 3, 2007

Maximus Zeebra said:
The US dollar is overvalued. Thats the point and its indisputable.

No point is indisputable Max, especially the one you are trying to make.

And you are wrong, the Eurozone-13 is a larger economy than the US.. Not only that, the EU-27 is 1/10th larger than that again..

So 13 countries added together have a larger economy than a US? and 14 more added on to that are only a little bit larger? I'd say that speaks pretty damn well for the US.

Trajan Octavian Titus · May 4, 2007

Maximus Zeebra said:
The US dollar is overvalued. Thats the point and its indisputable.

Yes it is disputable because the U.S. intentionally undervalues its currency by increasing the money supply.

Why are you mixing service economy into this?

Because its not foreign trade that is responsible for the value of currency it is the size of the GDP and the amount of money in circulation. The U.S. economy is heavily serviced based which is why we have such a large GDP yet import more than we export. The trade deficit signals how strong our economy and dollar really are in that we trade paper money for made goods.

And you are wrong, the Eurozone-13 is a larger economy than the US.. Not only that, the EU-27 is 1/10th larger than that again..

You're right my bad I thought the U.S. had a higher GDP than the EU.

China is valued at 2 trillion $ in GDP terms while in GDP puchasing power parity the Chinese economy is worth 8 trillion.. With exports of 700 billion a year its more likely Chinas economy is worth 8 trillion than 2 trillion.

This doesn't take into account that the U.S. is a well diversified economy the fact that a dollar can buy much more in China than it can in the U.S. is proof of how strong the dollar actually is and how inefficient and undiversified the Chinese market is. Their market is where the U.S.'s was at the begining of the industrial revolution.

All these relations are playing in, which is why the US dollar is loosing value,

No the reason why the dollar is loosing value is because we have increased the money supply so that we can trade more paper for made goods. That is not a signal that the $ is weak it is a sign of how efficient and diversified the U.S. economy is.

Now, the US exports have to grow, while their import has to decline..

Why would we have to do that? Our GDP is still going to be huge no matter what, we don't have to manufacture made goods, the U.S. economy has evolved to the point that we can purchase those goods in exchange for services.

Their dollar is falling now to close the GAP, as long as the gap is so wide the US currency is wrongly valued.

Our dollar value has fallen because we increased the money supply.

Maximus Zeebra · May 4, 2007

Trajan Octavian Titus said:
Yes it is disputable because the U.S. intentionally undervalues its currency by increasing the money supply.

The combination is that the US is nagging China to change the value of their currency, because its clearly undervalued, and it is, clearly.

Trajan Octavian Titus said:
Because its not foreign trade that is responsible for the value of currency it is the size of the GDP and the amount of money in circulation. The U.S. economy is heavily serviced based which is why we have such a large GDP yet import more than we export. The trade deficit signals how strong our economy and dollar really are in that we trade paper money for made goods.

Loads of economies are servicebased, so I dont understand your point.
Chinas economy is in a complete change, not like you think that they are where the US was in the start of the industrial revolution. They clearly arent, their economy is now roughly the total size of the US. The Chinese economy is maturing faster than any economy in the world.

One statistics says that Norway is the richest country in the world, when the fact is quite different.. Another statistic show the scandinavian/nordic country of who have the least money left after paying their housing and groceries every month is the Norwegians.
In China this also means something, because the Chinese they get lots of things for far less, so their purchasing power is bigger inland, but abroad its still expensive. In Europe its relatively alright inlands, but anywhere you go in the world, everything is cheap. You will probably notice a huge difference if you take a trips across the atlantic or pacific on the prices and just how little the dollar is worth. Now, we all know the dollar is overvalued, because the US is buying much more abroad than they are selling.
This is damaging, because if it continues the only way the dollar can go is down. If on the other hand the exports was bigger than imports, the dollar could only go up.

Trajan Octavian Titus said:
You're right my bad I thought the U.S. had a higher GDP than the EU.

Good to see that the confusion is over. The EU economy is just getting bigger and bigger in dollar terms. The Chinese economy like the Chinese currency is valued now is only worth 2 trillion $. If the Chinese currency were to strengthen against the dollar.

Trajan Octavian Titus said:
This doesn't take into account that the U.S. is a well diversified economy the fact that a dollar can buy much more in China than it can in the U.S. is proof of how strong the dollar actually is and how inefficient and undiversified the Chinese market is. Their market is where the U.S.'s was at the beginning of the industrial revolution.

Did I ever say the US economy was not a well and diversified economy?

What you say there is not a strenght, its the fact that the Chinese have a "locked" currency which is set by the government and its far undervalued.. Just recently this is starting to change, The Chinese currency is slowly rising in value, and is estimated it should be 1 dollar for 2 Chinese currency. This would triple the "market value" of the Chinese economy.
There is no market value on the Chinese economy, thats the whole point, thats why the dollar will fall to the Chinese currency.

The Euro on the other hand is just the most stable and trustable currency there is, it will be used as a marker for both the US and China when they adjust their currency. Its going to be exciting to see the swings to get the currencies completely revalued.

Trajan Octavian Titus said:
No the reason why the dollar is loosing value is because we have increased the money supply so that we can trade more paper for made goods. That is not a signal that the $ is weak it is a sign of how efficient and diversified the U.S. economy is.

The Money supply? Lol, the money drain you mean? US assets abroad will be far less worth and in the US they will also be far less worth, it will be cheaper for Europe and China to buy American companies.

Trajan Octavian Titus said:
Why would we have to do that? Our GDP is still going to be huge no matter what, we don't have to manufacture made goods, the U.S. economy has evolved to the point that we can purchase those goods in exchange for services.

No its not, if the Euro is valued at 1.65$ = 1€, and the 1 Chinese currency = 2 dollar.

If that is the case, the US economy relative to the Chinese and the Euro economy is worth far less, a money drain has taken place, and the US economy is greatly devalued. As a result you interest rates will rise to high levels. Then you will save more and spend less, the imports will fall, the exports will hopefully increase.

Trajan Octavian Titus said:
Our dollar value has fallen because we increased the money supply.

Money drain you mean..?

Maximus Zeebra · Oct 11, 2009

This thread is so interesting that it should be in the hall of fame of debates.
It is necessary for you all to re-read this thread before respoding to this post.

1. I knew already then that Obama would become president.. Wow.

2. I saw the trend of the declining US dollar, the declining US economy and so fourth put against GDP. All of you contested that opinion/prediction that the US economy was in relative decline. This makes it interesting to compare GDP numbers of 2007 with those of 2009. In where:
-All countries using the Euro has seen a great revaluation against the US economy.
-Where most countries has seen a moderate or strong revaluation against the US economy.

3. I argued that the dollar was overvalued. Which is was and still is with current economic evaluations. Dollar value has declined greatly not only against the Euro, but against most currencies between then and now.

4. I argued that the US dollar would continue to decline and the US economy with it, until exports and imports reach parity and debts are payed down at state level and corporate level. This is a clear ongoing process and have been proven over the last 2 years to be true.

5. I predicted actual economic decline that would be felt on all levels in the US as result of the debts and loose monetary policies of the past.

I was right in many other things as well throughout the thread..

I was wrong about some things..

1. That Obama would cut spending and raise taxes.
-Which can only mean he wants to devalue the dollar completely or drive the dollar into complete and utter collapse and from there revalue the economy on the world stage.
2. The US dollar vs the pound.. I predicted 2.25 -2.5 as happening. It will not happen, my opinion on this is changed. The state of the UK economy, which was not of great interest to me at the time, is in a dreadful situation, the UK econonomy is the economy of the world which is facing the worst future of all economies, dreadful prognosis.

Anyways, interesting points you all made, but then again you were all wrong.

Apocalypse · Oct 11, 2009

What's up with the necrothread?

jackalope · Oct 11, 2009

Apocalypse said:
What's up with the necrothread?

LOL @ necrothread .... but, it was interesting to scan.

Cold Highway · Oct 11, 2009

Apocalypse said:
What's up with the necrothread?

I honestly thought this was a current threat until I saw TOT's posts.

DeeJayH · Oct 11, 2009

chevydriver1123 said:
I honestly thought this was a current threat until I saw TOT's posts.

well you were still a noob :2wave:

Kali · Oct 12, 2009

The dollar has not been worth the paper it is printed on in sometime and too bad we no longer have back up for every dollar made in this country. Fort Knoxx

Kandahar · Oct 12, 2009

Kali said:
The dollar has not been worth the paper it is printed on in sometime and too bad we no longer have back up for every dollar made in this country. Fort Knoxx

We have NEVER had the back up for every dollar made. If we did, there would be no way for banks to make money, as they couldn't loan it out.

Kali · Oct 12, 2009

Kandahar said:
We have NEVER had the back up for every dollar made. If we did, there would be no way for banks to make money, as they couldn't loan it out.

We did but it was in gold and was stored in Fort Knoxx

Kandahar · Oct 12, 2009

Kali said:
We did but it was in gold and was stored in Fort Knoxx

No. Even when we were on the gold standard, there was not enough gold in Fort Knox to redeem every dollar in America.

Kali · Oct 12, 2009

Yes there was!

Maximus Zeebra · Oct 14, 2009

Kandahar said:
No. Even when we were on the gold standard, there was not enough gold in Fort Knox to redeem every dollar in America.

There is a desperate need not only in the US to rebuild a new economy, state and politics free of individuals and corruption. We also need to do this in Europe, and at the same time both Europe and the US needs to rebuild its core values and rethink their strategies. The economy must be built not around gold or currencies, but around stable sustainable factors, without capitalist adjustments like variative interest rates, money, borrowing and so fourth. The real value is labour and progress in stability, thats how things should be valuated. Everyone should be entitled to decent standards of living BEFORE a single person is allowed any luxury.

Thats how it must be, thats how it should be, thats how it eventually will be, as soon as the human race changes from their retarded ways.

End of story. If you disagree you are simply wrong, or do not understand the message above.

Harshaw · Oct 14, 2009

Maximus Zeebra said:
End of story. If you disagree you are simply wrong, or do not understand the message above.

I thought you weren't "back."

DeeJayH · Oct 14, 2009

Maximus Zeebra said:
There is a desperate need not only in the US to rebuild a new economy, state and politics free of individuals and corruption. We also need to do this in Europe, and at the same time both Europe and the US needs to rebuild its core values and rethink their strategies. The economy must be built not around gold or currencies, but around stable sustainable factors, without capitalist adjustments like variative interest rates, money, borrowing and so fourth. The real value is labour and progress in stability, thats how things should be valuated. Everyone should be entitled to decent standards of living BEFORE a single person is allowed any luxury.

Thats how it must be, thats how it should be, thats how it eventually will be, as soon as the human race changes from their retarded ways.

End of story. If you disagree you are simply wrong, or do not understand the message above.

we are still the world largest manufacturer. Why don't you keep your focus on your own backyard

Maximus Zeebra · Oct 18, 2009

MZ said:
There is a desperate need not only in the US to rebuild a new economy, state and politics free of individuals and corruption. We also need to do this in Europe, and at the same time both Europe and the US needs to rebuild its core values and rethink their strategies. The economy must be built not around gold or currencies, but around stable sustainable factors, without capitalist adjustments like variative interest rates, money, borrowing and so fourth. The real value is labour and progress in stability, thats how things should be valuated. Everyone should be entitled to decent standards of living BEFORE a single person is allowed any luxury.

Thats how it must be, thats how it should be, thats how it eventually will be, as soon as the human race changes from their retarded ways.

End of story. If you disagree you are simply wrong, or do not understand the message above.

DeeJayH said:
we are still the world largest manufacturer. Why don't you keep your focus on your own backyard

Is that your answer? You clearly didnt even read the last message.. It doesnt matter that you are the biggest manufacturer or the biggest exporter as long as the totality of the economy is retarded.

The fall of the dollar..

What do you think about the economic situation in the US?

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

Everything is falling apart fast, if we act fast we can stop a collapse.

Its dier, we need to do something quickly.

Bush is the cause of this decline, he must resign now.

The dollar will do the work, everything will even out over time.

We will manage it, but it will take time and missery.

Its alright, shouldnt be to difficult to fix.

Everything is fine as it is.

Other.. (explain)

Everything is the fault of John Kerry..

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