Dollar all time low against Euro
Gold at 27 year high. Thanks fed chairman for lowering my buying power but making sure your banker buddies are happy. Transfer of wealth from the poor to the rich. Economically, terrible news.
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I'm sure you prefer a higher trade imbalance, right? 0 -
Yes, but our dollar is now worth the same as the Canadian dollar, whic was often worth about 75 cents. We just lowered interest rates to help the housing market counteract the home defaults. The hope is new people will buy the houses that are being foreclosed because people bought more house than they can afford.
So the dollar is cheap and the Fed just lowered it again.
Go news for farmers and farm exports.[:D]
I would have to say this is a product of Greenspan's fault.0 -
Remeber 1976, US dollar=Canadian dollar. Printing more paper to pay bills only makes the existing paper more worthless. $4.00 a gallon gas is right around the corner, if we are lucky that will be the worst of it. But I think we are about out of luck. Following the Constitution would prevent this sort of bad economic policy. Indeed, it will be the only thing that will see us through the coming collapse. BUY GOLD. 0 -
Purchasing power is nothing if the country has no net income to purchase with. It's a great thing for real, tangible industries, like agriculture and mining, and that applies to the businesses that support those activities as well. 0 -
if I were looking to invest, Gold is defintely the way to go.
and as far as the economy, it scares me. Who knows when this thing is going to collapse. They keep printing more money, and borrowing money from China, lowering interest rates..
now that the interest rates are lower, the over-borrowing and over-lending is going to get even worse! And all this credit is being backed up by nothing!
what a shame. As the value of the dollar continues to decline, and the cost of living continues to go up, this will just prompt more of our stupid politicians to want to raise the minimum wage, and thus send even more jobs overseas.0 -
invest who the H E double hockey sticks has any money to invest?????
bad news for sure, when the middle class crumples all the gold (unless in had) and ivested money in the world ain't gonna save ya.
I gotta a wall tent,guns,animals to eat, water to drink. they can have the rest it was never worth the money paid in the first place.0 -
I'm selling tin foils hats now that the dollars so low. Really how does this even have anything to do with anything unless your buying a Mercedes or Heineken.
Buy all the gold you can afford. Its just like buying pork bellies.0 -
i was watching the news this morning, and it said the dollar being low is a good thing for small business because it made it easier/cheaper for them to produce goods. The same goods that foreign business are producing for more money. 0 -
quote:Originally posted by SuburbanNoize
i was watching the news this morning, and it said the dollar being low is a good thing for small business because it made it easier/cheaper for them to produce goods. The same goods that foreign business are producing for more money.
hahahaha. Thats funny. It doesnt make it easier or cheaper to produce goods because all the costs are just going to go up to compensate for the devaluation of the currency.0 -
quote:Originally posted by jpwolf
Gold at 27 year high. Thanks fed chairman for lowering my buying power but making sure your banker buddies are happy. Transfer of wealth from the poor to the rich. Economically, terrible news.
quote:but making sure your banker buddies are happy.
And don't forget the stock holders in bank's like me-[;)][:D]0 -
Cool maybe the foreigners wiil start going to france or germamay 0 -
A declining dollar has virtually no impact on the relationship of earnings and domestically produced goods; it only changes the relationship of earnings to imported goods. A lower value dollar increases the U.S. cost of foreign goods, making them less affordable, and reducing imports. That forces consumers to substitute American produced goods for the imported ones that they had been buying, which can drive up domestic prices.
The reduced value of the dollar makes American produced goods cheaper for foreigners to buy, which results in increased sales of American produced goods overseas. Increased sales mean increased profits for businesses, but they also mean more jobs for the people producing the products sold.
It can increase the cost of imported oil and fuel, depending on the country of origin. It can also reduce the foreign interest in investing in dollar related instruments.
It is helpful for virtually all export/import considerations on the domestic front when you are running serious trade deficits and losing jobs to "cheaper" labor. It is exactly what we have been trying to get China to do relative to the dollar in order to reduce our trade imbalance with them, and it is what those who wish to stop much of the job exportation should look for to a limited extent.
BTW, it does not mean that the trade deficit will go away, or even that it will be reduced. It only means that it will be less than what it would have been in the absence of the shift in value. Think of it like quitting smoking after forty years. It doesn't mean there is no health damage or danger already incurred and ongoing, just that you have reduced the additional danger that would have been added by continuing to smoke.0 -
Well said dlrjj.
Spoken like a true economist.
While the talking heads are blaming ethanol for the high price of grains, a cheap dollar helps farm exports a lot. A booming economy in Asia (China) also helps. While I don't think one aspect drives the corn/bean market anymore, strong demand in multiple markets can push the market.
Having said that, I would have to add that America's proper in the 80's and 90's came during times of a strong dollar. THe ocmbination of a weak dollar with a lowering of interest rates for a slacking housing market concerns me. The Fed's decisions do have me concerned.0 -
You are absolutely correct about the situation in the 80's and 90's, but might have the directionality backwards as to the strong dollar. It is likely that the strong dollar was the result of a strong economy, rather than the other way around. That strong dollar also contributed to the trade imbalance because of the overseas buying power created. Open markets adjust to that over time, and that's part of what we are seeing now.
You are also correct in your concern that the interest rate drop is the result of weakness in the economy, and that is exactly what the Fed. is trying to help by the relief and stimulus of the reduced cost of borrowing money. The lower interest rate will make it easier and cheaper for those who need to borrow money to do so, and it will cause interest rates on savings to decline, providing a disincentive to save on the part of those who have surplus cash. The result of each occurrence is an increase in spending.
That increase in spending may prompt some concern about more inflation in the future, which might actually cause the banking industry to increase long term mortgage interest rates in anticipation of the loss of value due to the inflation.
We should see short term rates drop, in addition to some credit card rates. We should also see a decline in the home equity loan rates but, again, don't absolutely count on long term mortgage rates declining. It depends on the interpretation and expectation of results.0 -
quote:Originally posted by jpwolf
Gold at 27 year high. Thanks fed chairman for lowering my buying power but making sure your banker buddies are happy. Transfer of wealth from the poor to the rich. Economically, terrible news.
I think George the Lesser should get most of the credit. Just remember how happy all of you were with those tax cuts for rich.0 -
Wonder if I can sue history book makers? The ones I saw say we won the Americian Revolution? So where did the freedom and less taxes go? No wonder crooks lie, it's what they are taught in school. 0 -
quote:Originally posted by gruntled
quote:Originally posted by jpwolf
Gold at 27 year high. Thanks fed chairman for lowering my buying power but making sure your banker buddies are happy. Transfer of wealth from the poor to the rich. Economically, terrible news.
I think George the Lesser should get most of the credit. Just remember how happy all of you were with those tax cuts for rich.
Let's not forget the out-of-control spending (remember the $50 billion plastic plants for the Department of Homeland Defense offices?).
But hey, folks voted for this nonsense twice - have fun!0 -
quote:Originally posted by ElMuertoMonkey
quote:Originally posted by gruntled
quote:Originally posted by jpwolf
Gold at 27 year high. Thanks fed chairman for lowering my buying power but making sure your banker buddies are happy. Transfer of wealth from the poor to the rich. Economically, terrible news.
I think George the Lesser should get most of the credit. Just remember how happy all of you were with those tax cuts for rich.
Let's not forget the out-of-control spending (remember the $50 billion plastic plants for the Department of Homeland Defense offices?).
But hey, folks voted for this nonsense twice - have fun!
I don't seem to remember hearing about $50 Billion for plastic plants. When was this, and can you provide a link please.
Thanks.0 -
quote:Originally posted by ruger270man
if I were looking to invest, Gold is defintely the way to go.
So would you actually purchase gold and store it in a safe or would you purchase shares of a precious metals based fund? Seems like if we are really worried about a collapse of our financial system you would need X-hundred ozs of gold in your possesion to weather the storm.0 -
Yeah, it's only a matter of time before the American economy, the largest, deepest, broadest, most comprehensive, most sophisticated, most dynamic, most envied and never equaled economic system in the history of man, collapses and we'll all be forced to live off subsistence agriculture for our new Euro and Red Chinese overlords.
I'll start buying farming tools tomorrow.0 -
quote:Originally posted by nemesisenforcer
Yeah, it's only a matter of time before the American economy, the largest, deepest, broadest, most comprehensive, most sophisticated, most dynamic, most envied and never equaled economic system in the history of man, collapses and we'll all be forced to live off subsistence agriculture for our new Euro and Red Chinese overlords.
I'll start buying farming tools tomorrow.
I am planting a Fall crop of tomatoes to start the cycle [:D]
There was a serious side to my question though. I think a bit of gold in your portfolio may be a good choice, so should you actually purchase "Gold" or shares in a metals fund?0 -
all the economy talk this way or that way means nothing if the stupid voters keeps re-electing the same sorry people into office 0 -
quote:Originally posted by Maalox
quote:Originally posted by nemesisenforcer
Yeah, it's only a matter of time before the American economy, the largest, deepest, broadest, most comprehensive, most sophisticated, most dynamic, most envied and never equaled economic system in the history of man, collapses and we'll all be forced to live off subsistence agriculture for our new Euro and Red Chinese overlords.
I'll start buying farming tools tomorrow.
I am planting a Fall crop of tomatoes to start the cycle [:D]
There was a serious side to my question though. I think a bit of gold in your portfolio may be a good choice, so should you actually purchase "Gold" or shares in a metals fund?
That depends on the intent of your purchase.0 -
Do any of you "holier than thou" wannabe Fed Chairman's remember the 70's? It was anything but pleasant. True it wasn't "the great depression" but compared to the standard of living people have been enjoying for the last 25 years, it would feel like it. 0 -
I remember the 70's, and we're still here, aren't we now.
I remember gold near 700, so an investment in it would have made you just about.........nothing.0 -
Source: Wikipedia.
Since 1968 the price of gold on the open market has ranged widely, with a record high of $850/oz ($27,300/kg) on 21 January 1980, to a low of $252.90/oz ($8,131/kg) on 21 June 1999
2007 28-yr high
On September 21, 2007, gold hit a 28-year high due to the dollar's off to record lows versus the euro: spot gold was up at $739 per ounce (its highest since January 1980).
quote:I remember the 70's, and we're still here, aren't we now.
I remember gold near 700, so an investment in it would have made you just about.........nothing.
Near $700? I guess near $700 is $850 in some peoples reality.
I seems investment in it just 8 short years ago would have made you about........292%
But hey, things are great, right?
Let's talk about the puny national debt, next. And then who we owe that money to, next. And what they could do to us if so inclined, next.0 -
So who do you think we owe all that money to? 0 -
Nice job of trying to "cherry pick" the increases.
Want to see a similar job show just how much you could have lost at various times?
Gold is a pure fear investment, and always has been.0 -
quote:So who do you think we owe all that money to?
From Associated Press November 17, 2006
...the Chinese own over $1 trillion in American debt, most of which has been borrowed between 2001 and 2005.
I'd hate to know what that number is with 2 more years tacked on.
"Bush has borrowed more than all previous 42 Presidents. Combined.
According to the Treasury Department, from 1776-2000, the first 224 years of U.S. history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but in the past four years alone, the Bush administration borrowed $1.05 trillion."
Source:http://digg.com/business_finance/Bush_has_borrowed_more_than_all_previous_42_Presidents_Combined
here's some more good news.
Source: wikipedia
Historically increases in the supply of paper money or fiat currency through increased money supply would cause the demand for gold to increase. There was a time when gold was money and vice versa. If citizens felt that there may be insufficient gold to cover the paper money in circulation, they would queue up at the bank to change their paper currency back into gold.
However, since the gold standard was ended on August 15, 1971, governments have been free to print as much money as they choose, without fear that their populations will come knocking on the central bank's door demanding to change their paper money back into gold.
In January 1959 US M3 money supply was $288.8 billion [14], and the official gold reserves of the United States was then 17,335.1 tonnes, or 557,336,000 ounces [15] (there are 32,150.7 troy ounces in a tonne). That means that in 1959, there were $518 in circulation for every ounce of gold reserves held by the USA. Although the theoretical price should then have been $518 per ounce, the actual price, as fixed under the gold standard was only $35 an ounce.
By August 2005, the US M3 money supply had risen to $9,873.9 billion, whilst at the same time the Official Gold Holdings of the United States had fallen to just 8,133.5 tonnes, or 261.50 million Troy Ounces [16]. This means that today, in 2005, there are $37,831 in circulation for every troy ounce of gold held by the United States.
However, this increase of 75 times in the ratio of central bank gold holdings to debt does not allow for the fact that the gold standard was abandoned in 1971 and gold holdings have been deliberately and considerably reduced. Another far less dramatic way of looking at the same figures is this: In 1959 US government debt valued in gold was 8 billion Troy ounces, in 2005 US government debt was 20 billion ounces gold - an increase of only 2.5 times.
The above numbers show the falling influence of gold in today's monetary system. Gold bugs believe, or hope, that one day gold's importance will return as the printing of paper money gets out of control and before we end in a hyper-inflationary fiat money collapse.
The US Federal Reserve ceased publishing M3 data on 23 March 2006, with the last published data indicating a year-on-year growth rate of 8.23%. Central banks may see this as a reason to limit further increases in their reserves of dollars, and thus alternatives such as gold or the euro might be considered. Jon Nadler, an analyst at Kitco Bullion Dealers, said gold was still benefiting from August 30, 2006 release of the minutes to the last rate-setting meeting of the US Federal Reserve. The minutes to the August 8, 2006 meeting, at which the Federal Open Market Committee kept short-term interest rates unchanged for the first time since 2004, supported the view that US borrowing costs have peaked.[17]
Nice, huh? Let's discuss any portion of this you like.0 -
Nice try to dodge the issue, but NONE of that is what your first post of the thread concerned, now is it.
The fact remains that the move by the Fed. was the right one to make, regardless of whether it works out or not.
None of your anti-government rants can change that reality, but I'm sure you'll go off on some diatribe about how anyone who doesn't agree with everything you spew is a sheeple, an Elite, or has their head in a very dark place.
Just how much have you studied Economics, and how long have you held a job in that field of endeavor?0
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