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Ignore the fall of the dollar. Ignore the current account deficit.

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Karmadillo Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:32 AM
Original message
Ignore the fall of the dollar. Ignore the current account deficit.
If you pay attention, the terrorists win.

http://story.news.yahoo.com/news?tmpl=story&cid=2026&nc...

<edit>

A cheaper dollar reduces the value of American securities, making them less attractive to foreign investors. That could eventually precipitate what Robbins called "the doomsday scenario" Japan and China not only refusing to buy U.S. bonds, but selling some of their $1.3 trillion in reserves.

The only way Uncle Sam could then find new customers for its IOUs would be by raising interest rates. And although higher rates are good for savers, they would be disastrous for a country weaned on cheap credit.

"Sometime soon, the falling dollar is going to show up in rising inflation, rising interest rates and a falling standard of living," said Harry Chernoff, an economist with Pathfinder Capital Advisors. "The housing and mortgage markets, which benefited the most from declining interest rates over the past few years, are likely to feel the most pain."

Not everyone agrees that suffering is imminent. The National Assn. of Manufacturers calls the dollar doomsayers "all but hysterical." Manufacturers and produce growers like a cheap dollar because it makes their products more affordable in foreign markets.

more...

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Eurobabe Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:33 AM
Response to Original message
1. Yeah ignore it all Bull Market with Legs (Yahoo headline)
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Karmadillo Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:42 AM
Response to Reply #1
3. Dow at 36000 any minute.
n/t
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Hello_Kitty Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:36 AM
Response to Original message
2. A lower dollar makes imported products more expensive here!
Not to mention forget travelling anywhere outside of the States. What's the matter with these people? This isn't 50 years ago; we don't have the manufacturing base that we used to have.
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:56 AM
Response to Reply #2
5. We are going to keep hemorrhaging jobs if the dollar stays high
because there is no way a worker in the US can compete with a worker in a country whose living wage translates to a buck a day US.

Since the dogma of free trade has prevented our wonderful elected officials from protecting us through targeted tariffs (which, ironically, every country US jobs has been exported to maintains), our only hope comes through a decrease in the almighty buck.

So either we are reduced to a nation of burger flippers and soldiers, with the only viable professions in health care and education, or we are in for a rough ride with runaway inflation.

Either way, it's going to be grim. The present system cannot maintain itself for much longer, not unless they come up with another way for working stiffs to be scammed into taking on more debt.
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oldlady Donating Member (513 posts) Send PM | Profile | Ignore Sun Nov-14-04 10:55 AM
Response to Original message
4. where's the story from just before the election
where the US Securities annual roll-over auction (retiring old IOUs and taking in new IOUs) was held and no one came--- I thought I'd saved it, but can't find it. Anyone know what I'm talking about?
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:58 AM
Original message
Yes, Russia and China failed to show up to snap up the bonds
and Wall Street had to eat 'em.
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:58 AM
Response to Reply #4
6. Hiccup, delete
Edited on Sun Nov-14-04 10:58 AM by Warpy
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oldlady Donating Member (513 posts) Send PM | Profile | Ignore Sun Nov-14-04 11:05 AM
Response to Original message
7. found it...
Bearish on Uncle Sam?
As Foreign Investment Shows Decline, Economists Keep Watch

NEW YORK -- On Sept. 9, as it must frequently do, the U.S. government turned to Wall Street to raise a little cash, and Paul Calvetti bet that demand for $9 billion worth of long-term Treasury bonds would be "huge."

But at 1 p.m., as the auction opened and the numbers began streaming across his flat-panel screens, the head of Treasury trading at Barclays Capital Inc. slumped in his chair. Foreign investors, who had been voraciously buying Treasury bonds, failed to show up. Bond prices cascaded downward, interest rates rose, and in five minutes, Calvetti, 38, who makes money by bidding on bonds at one price and hoping market demand lets him quickly resell them at a profit, had lost $1.5 million.

"It's amazing," he gasped, after the Treasury Department announced that Wall Street traders, not foreigners, had been left to buy virtually the entire auction. "I don't think I've ever seen this before."

http://www.washingtonpost.com/wp-dyn/articles/A43402-20 ...


yipes! already forgot the DUer who first posted this...name started with 'poor'...sorry
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TeeYiYi Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 11:10 AM
Response to Reply #7
8. For some reason that link didn't work . . .
Edited on Sun Nov-14-04 11:12 AM by TeeYiYi
. . . but this one should:

http://www.washingtonpost.com/wp-dyn/articles/A43402-20...

TYY

On Edit: Thanks for the link oldlady. :thumbsup:
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