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Gminn03
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"You also correct in saying that it’s not completely Bush’s fault for the deficits as some people may say. When he took over from Clinton there were surpluses but these figures were severly “manipulated” during a dotcom bubble, which was totally specultative and not based on anything real. 9/11 and accounting practices have also had severe effects. However only the most brainwashed republican wouldn’t believe the guy has been profligate needs to rein in spending quick. The debacle in Iraq is proving to be very costly and the deficit cannot be rectified by a fall in the dollar alone."
Good information. I remember when Enron and all the accounting scandals were going on and Bush waited 9 months to take real action. We have had rising deficits, out of control spending, and given huge tax cuts to the most wealthy over the last 4 years. This has not significantly improved the economy and social programs have been cut. The only winners are large corporations and investors in the stock market. The weak dollar will not solve all the problems. Getting the deficit under control is a first step.
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Thai Girls : Meet Sexy Thai Girls
Posted on: 4:10 am on Jan. 27, 2005
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Mr Alan
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Quote: from Gminn03 on 3:04 am on Jan. 27, 2005[brThe weak dollar will not solve all the problems. Getting the deficit under control is a first step.
You are correct that the weak dollar will not solve all the problems. But the number 1 problem when the recession started was jobs. Deficit spending to spur the economy (includes tax cuts) and devaluing of the dollar are both designed to improve the employment situation, and they have worked reasonably well.
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Bangkok Women : Meet Sensual Bangkok Women
Posted on: 7:24 am on Jan. 27, 2005
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Mr Alan
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Quote: from Broken Leg on 2:27 am on Jan. 27, 2005
The USA does not currently have the lowest interest rates in the western world (you really mean developed world as Japan has the 2nd largest economy in the world.)
Current rates,
Japan currently 0%
Switzerland currently 0.75%
Euro Zone 2%
USA currently 2.25%
Actually I did mean the Western world. Japan is a special case because of their unique economic system.
One cannot simply quote interest rates as a single number. And the Fed Funds Rate (or rough equivalent overseas) is not the true picture.
When comparing market interest rates (those not fixed by the government) for short, intermediate, and long term securities, US rates are quite low compared to other developed countries. This is changing as the US economy improves. And US unemployment is also quite low compared to most other Western nations (except perhaps the quasi-socialist nations where the government gives people work).
The US dollar has always been artificially over-valued because of its use to value commodities and as a safe haven for investors. Even Saddam Hussein had hundreds of millions of US dollar bills stashed away in his vaults.
If one goes back in time over the last 35 years, the US dollar is really not in that bad of shape right now compared to previous valuations against the baht, yen, pound, etc.
Here is a chart that shows the long term value of the US Dollar against British Pound:
http://research.stlouisfed.org/fred2/series/EXUSUK/95/Max
US Dollar against Japanese Yen:
http://research.stlouisfed.org/fred2/series/EXJPUS/95/Max
US Dollar against Thailand Baht:
http://research.stlouisfed.org/fred2/series/EXTHUS/95/Max
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Thai Girls : Meet Sexy Thai Girls
Posted on: 8:01 am on Jan. 27, 2005
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Broken Leg
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Quote: from Mr Alan on 7:55 pm on Jan. 27, 2005
Quote: from Broken Leg on 2:27 am on Jan. 27, 2005
The USA does not currently have the lowest interest rates in the western world (you really mean developed world as Japan has the 2nd largest economy in the world.)
Current rates,
Japan currently 0%
Switzerland currently 0.75%
Euro Zone 2%
USA currently 2.25%
Actually I did mean the Western world. Japan is a special case because of their unique economic system.
One cannot simply quote interest rates as a single number. And the Fed Funds Rate (or rough equivalent overseas) is not the true picture.
When comparing market interest rates (those not fixed by the government) for short, intermediate, and long term securities, US rates are quite low compared to other developed countries. This is changing as the US economy improves. And US unemployment is also quite low compared to most other Western nations (except perhaps the quasi-socialist nations where the government gives people work).
The US dollar has always been artificially over-valued because of its use to value commodities and as a safe haven for investors. Even Saddam Hussein had hundreds of millions of US dollar bills stashed away in his vaults.
If one goes back in time over the last 35 years, the US dollar is really not in that bad of shape right now compared to previous valuations against the baht, yen, pound, etc.
Here is a chart that shows the long term value of the US Dollar against British Pound:
http://research.stlouisfed.org/fred2/series/EXUSUK/95/Max
US Dollar against Japanese Yen:
http://research.stlouisfed.org/fred2/series/EXJPUS/95/Max
US Dollar against Thailand Baht:
http://research.stlouisfed.org/fred2/series/EXTHUS/95/Max
Mr Alan,
You seem to like arguing for the sake of arguing. Or at least you have a need to always get the last word in.
How can you ignore Japan? It is a significant player with regardsa to the importance of interest rates and the value of the dollar.
What do you mean the unique state of it's economy? It's got a GDP of over 4 trillion. The savings if private investors and funds in Japan that significantly influence exchange rates through carry trades.
What the f*** do you mean one cannot quote interest rates as a whole, who the f*** is one? it wasn't one it was me.
Interest rates are only higher in the UK, Australia, Canada and New Zealand in the developed world a population far less than that of the Euro Zone and switzerland so a greater proportion of the developed world has LOWER INTEREST RATES THAN THE US, this goes for CENTRAL INTEREST rates and MARKET interest rates. So why is the dollar down against these currencies because of the deficits.
So now we are in the middle of a tightening phase by the fed and increases in central bank interest rates due to growth and inflation the in the USA. The US is not just starting to come out of recession last year growth in the USA was the HIGHEST of any G7 nation (the richest 7 nations in the world) so why are the markets not reacting to this, BEACAUSE OF THE DEFICITS.
Anyway in the the UK a country where the rate is 4.75%, I can go out and get a mortgage for a LOWER rate than in the USA
As for developed countries with lower unemployment than the USA they are Austalia, UK, Japan and New Zealand are you seriously trying to suggest these countries are "quasi socialist where the government gives people work". If you are then you really have a very poor knowledge indeed.
To bring this back to the point in question the fact that the US has strong employment should be dollar positve and be strengthening the dollar it's not BECAUSE OF THE DEFICITS.
As for historic rates that is not the point of the discussion. The point was you said the dollars PRESENT decline was due to interest rates I was trying to educate you on this
However, seeing as you brought it up I will breifly explain the previous extremes of dollar weakness. The strength of the Yen as you can see is now pretty much at historic highs anyway (US dollar weakness), the only reason the yen is not stronger is through massive buying of US securities by Japan. Japan has been in recession or at least at 0 growth rates for 10 years and believe that they can get out of it through export and as depserate to keep there currency weak against the US dollar. As you can see it doesn't work, when they buy the market eventually overwhelms them and the yen dips lower then theybuy, yen stregth then the yen dips lower. The FX market is far to big for central banks to control, but they can speed up increases or slow down declines which is currently what is occuring.
In the case of the UK pound the previous extremes of weakness in the dollar was due to the Plaza accord (basically an international agreement to devalue the dollar) I will leave you to research that one yourself.
The devaluation of the baht was due to the crash in 97 the reasons for which here i'm not prepared to go into.
However since then the baht has continued to be kept relatively weak to the dollar due to China's currency peg with the dollar. If China freely floats it is v likely the baht will accrue against the dollar. In fact you can see if you got to a better charting package over the last 2-3 months the baht has accrued against the dollar on speculation of chinese revaluation.
try metatrader
Anyway you've shown before absolutely no interest in listening to anyone but yourself, fair enough if don't want to learn, f*** it, i'm off to drink snakes blood
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Bangkok Girls : Meet Sexy Bangkok Girls
Posted on: 9:18 am on Jan. 27, 2005
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Mr Alan
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Broken Leg,
I don't really disagree all that much with what you have said, but I think you are exaggerating things, and maybe we disagree about cause and effect.
What I meant by Japan was exactly as you explained it later in your post. The economy and interest rates are highly manipulated by the government (zero percent interest rates?). As you pointed out, the Yen has been artificially undervalued for a long time, and the Japanese government has been trying to keep it that way through currency market manipulation. But over time, markets usually prevail, and the Yen has increased against the dollar to more realistic levels.
I think you and I agree that the US government has sought a weaker dollar recently (just like the Japan, China, and other countries who have tried to keep their own currencies weak). The purpose of this is to increase jobs, exports, and reduce the trade deficit. So a part of the reason for the dollar’s recent decline has been the perception of world financial markets that the US government wants the dollar to decline and that countries like China might allow some increase in their own artificially valued currency down the road (making the dollar go even lower). This is important psychologically, since the dollar was artificially over-valued to begin with.
Yes, the trade deficit and budget deficit hurt the dollar. But they are not the only reason, and probably not the main reason. The dollar trades on open markets, and like other financial markets (stocks, bonds, gold, etc), different people have different explanations as to why values go up or down. I don’t claim to have all the answers, but I don’t believe that economic formulas can fully explain investor psychology.
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Thai Women : Meet Matured Thai Women
Posted on: 12:44 pm on Jan. 27, 2005
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manowar
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I must compliment both brokenleg and Mr. Alan for this very interesting debate about the reason for the weak dollars. Bottom line is that the dollar is not a sought after currency right now for whatever reasons : low interest rate, twin deficit, confidence in Bush......etc. therefore, the decline/weakness of the US$$. As a matter of fact, China has just announced today that they will start to look into pegging the rmb with other "strong" currencies such as euros and yens and will slowly move away from a rigid tie to the dollars. This signals a "sell" in their US$ reserves and will definitely move the dollars lowere. As to whether the revaluation fo the rmb will move the bahts ( which is the only relevence of this topic to the BTF), I am not 100% sold on the bahts moving higher against the US$$ if rmb revalued. Why ? because the
thai export has been hurt by China's refusal to revalue the rmb, so if rmb revalues ( ie.strengthens vs US$) then if bahts stays relatively cheap ( say at the current rate), Thailand can then regain some of the export advantage against China. I think Thaksin will interven (maybe ultimately futile but he will try) to keep bahts pegged at this range vs US$ as many other asian countries might do the same to regain their loss of export to US by China's artificially low rmb. That is also ironically why China does not want to revalue rmb. It's all a game of chess and poker and the stakes are very high. However, I do agree that it is still arguable whether the twin deficits are necessarily a bad thing for the US citizens. Although it maybe a bad thing for certain sectors of the US economy but as a whole, the net result to whether they created net wealth buildup or reduction, the jury is still out.
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Bangkok Women : Meet Beautiful Thai Girls
Posted on: 1:28 pm on Jan. 27, 2005
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Gminn03
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"You are correct that the weak dollar will not solve all the problems. But the number 1 problem when the recession started was jobs. Deficit spending to spur the economy (includes tax cuts) and devaluing of the dollar are both designed to improve the employment situation, and they have worked reasonably well"
I have to disagree on that last part. Over $1 trillion in tax cuts to the most wealthy (who need it the least), devaluing of the dollar, hundreds of billions in Iraq, and slashing programs that help those who have been hurt by the bad economy, have not worked reasonably well. Over the last 4 years, we have lost more jobs than created and the jobs that have been created pay less in comparison to a few years ago. People now pay more taxes to pay off the deficits that are happening at the federal and state levels and the cost of living has gone up, especially with gas prices. In my state, they are cutting back on healthcare and other vital programs and raising taxes at the same time. If the employment situation was really improving, the states would have more money coming in, not going more into debt. We are going into record deficits and that is bad for the nation and the exchange rate.
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Bangkok Girls : Meet Attractive Thai Girls
Posted on: 4:31 am on Jan. 28, 2005
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Broken Leg
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Quote: from Broken Leg on 6:27 pm on Jan. 28, 2005
Quote: from dbric36 on 2:58 am on Jan. 27, 2005
It was a joke!!
Sorry, forgot my sense of Humour
I have to disagree on that last part. Over $1 trillion in tax cuts to the most wealthy (who need it the least), devaluing of the dollar, hundreds of billions in Iraq, and slashing programs that help those who have been hurt by the bad economy, have not worked reasonably well. Over the last 4 years, we have lost more jobs than created and the jobs that have been created pay less in comparison to a few years ago. People now pay more taxes to pay off the deficits that are happening at the federal and state levels and the cost of living has gone up, especially with gas prices. In my state, they are cutting back on healthcare and other vital programs and raising taxes at the same time. If the employment situation was really improving, the states would have more money coming in, not going more into debt. We are going into record deficits and that is bad for the nation and the exchange rate.
Yeah when you look at the massive tax cuts that were given to stimulate the economy and if actually remove the budget deficit (the US governments overspend) from last years growth there basically isn't any.
In times of war or economic harship it's allways the poo that get hit hardest and longest.
I think the biggest danger for the US economy is apathy towards these deficits, you can find plenty of economists who'll tell you they don't matter in the long run, but then of course economists don't actually have to put their money where there mouth that not staking anything on their predictions, if they are wrong so what nobody cares.
A falling dollar, tax cuts etc, well yeah can possibly help but at the end of the day jobs will continue to be shipped out to places like china and india coz it's cheaper. Even if china revalues and the CNY goes up 50% against the dollar wages and manufacturing costs will still be well cheaper over there.
I think even old dubya's realised that to simply invade other countries for economic gain has severe impracticalities, and I believe the USA has to remember the values and ehtics the made it into the economic powerhouse, the richest most succesful nation in the world that it is, the innovation, hardwork and economic drive, belief that anything is possible and basically go in and take advantage of the new soon too be massive numbers of affluent middle classed in india, china and yes thailand, all desperate for a piece of the US quality of life.
So come you americans out there you're in the perfect position to take advantage of this. So lets turn the tables. Quit chasing Isan farm girls around and start taking some baht out of thailand. think of the huge number of rich old ugly thai housewives around, with their husbands out working all day I bet they are deparate for an original piece of hot blooded, sexy big mac and ripe for exploitation.
So come on boys take one for the team.
Go USA
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A, U-S-A,
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Thai Women : Meet Matured Thai Women
Posted on: 6:41 am on Jan. 28, 2005
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Mr Alan
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Quote: from Gminn03 on 3:25 am on Jan. 28, 2005
"You are correct that the weak dollar will not solve all the problems. But the number 1 problem when the recession started was jobs. Deficit spending to spur the economy (includes tax cuts) and devaluing of the dollar are both designed to improve the employment situation, and they have worked reasonably well"
I have to disagree on that last part. Over $1 trillion in tax cuts to the most wealthy (who need it the least), devaluing of the dollar, hundreds of billions in Iraq, and slashing programs that help those who have been hurt by the bad economy, have not worked reasonably well. Over the last 4 years, we have lost more jobs than created and the jobs that have been created pay less in comparison to a few years ago. People now pay more taxes to pay off the deficits that are happening at the federal and state levels and the cost of living has gone up, especially with gas prices. In my state, they are cutting back on healthcare and other vital programs and raising taxes at the same time. If the employment situation was really improving, the states would have more money coming in, not going more into debt. We are going into record deficits and that is bad for the nation and the exchange rate.
The job losses are a result of:
1). Stock Market crash after internet bubble of 1990's
2). 9/11
3). Stock Market crash again after accounting scandals of the 1990's were revealed.
None of these major events had anything to do with policies of the Bush administration.
TAX CUTS
The idea that the Bush tax cut was for only for the rich is left-wing propoganda:
Here are "Clinton" federal income tax rates for 2000 (Bush took office in Jan 2001).
15% up to 26,250
28% on amount over 26,250
31% on amount over 63,550
36% on amount over 132,600
39.6% on amount over 288,350
Here are the "Bush" federal income tax rates for 2004:
10% up to 7,150
15% on amount over 7,150
25% on amount over 29,050
28% on amount over 70,350
33% on amount over 146,750
35% on amount over 319,100
(all rates above are for single taxpayers. Marginal tax rates for married persons filing jointly, etc are same, but clip levels are higher).
As you can see, people who make $29,050 per year paid 18% more under Clinton ($4,722 in taxes) than under Bush ($4,000).
For someone making $1,000,000 per year, they paid 13% more under Clinton ($373,670 in taxes) than under Bush ($330,908).
As is clearly evident, working class people got a larger (18%) tax cut than rich people (13%) under Bush.
BALANCING THE BUDGET
The last time someone in the US tried to balance the budget during a recession it was Herbert Hoover and he made the Great Depression much more severe than it should have been. FDR initiated 12 years of massive (for its time) deficit spending to solve the problem. Democrats would love to see the economy tank, so they can run for president on the old message: "It's the Economy-Stupid".
Deficits are bad long term, but considering that the government is now borrowing money at historic low interest rates, it is not as bad as it seems in raw dollars. But I am not advocating deficits as a permanent solution, and neither is Bush.
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Bangkok Girls : Meet Attractive Thai Girls
Posted on: 8:42 am on Jan. 28, 2005
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