U.S. Dollar Slides as Current Account Deficit Soars

[NNN0LHI]

http://ap.tbo.com/ap/breaking/MGBBSWFMD6E.html

BERLIN (AP) - The dollar slid against the euro Wednesday on data that showed the U.S. current account deficit soaring more than expected in the fourth quarter and far exceeding its previous record for the full year.

The euro, which had crept upward before the figures were released, climbed above $1.34 after the data. The European currency bought $1.3421 in afternoon trading, up from $1.3385 before the current account figures and $1.3314 in New York late Tuesday.

The dollar dropped to 103.90 Japanese yen, compared with 104.45 yen Tuesday; the British pound strengthened to $1.9272 from $1.9122.

Worries about the wide U.S. current account deficit - the broadest measure of foreign trade - have strengthened the euro against the dollar over recent months, pushing it from about $1.20 last September to an all-time high of $1.3667 at the end of December.

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[cthrumatrix]

1. chimpy blames it on growth.... soon Wolfowitz and the IMF will

be defrauding america even more.

[LiberalVoice]

2. Our economy is the best its ever been!

Stop trying to help the terrorists! Why do you hate america? sarcasm/off

[GOPBasher]

7. Yes, conrade! Heil our glorious leader!

My sarcasm will probably be on and off all day. :-)

[priller]

3. Cheney: "Deficits don't matter"

However, Wednesday's data highlighted the speed with which the country is becoming indebted to the rest of the world. The current account deficit reached an all-time high of $665.9 billion in 2004 from the previous record, set in 2003, of $530.7 billion.

This will be *'s and Cheney's legacy, to make the US the biggest debtor nation in the world. And if * keeps saying things like he's not going to pay back the trust fund treasury notes, we are in deep doo-doo as a country.

Krugman wrote a book in 1999 called "The Return of Depression Economics". He foresaw where we are heading with the GOP.

[cthrumatrix]

4. don't forget Greenpsin yesterday --- our budget deficit is "unsustainable"

the tax hikes screwed our budget, our soc sec and more...these guys should be impeached ---NOW

[Wright Patman]

6. It began with Reagan

Under him, we went from being a creditor to a debtor nation. It took about five years of his run before he achieved that.

But we were already the world's largest debtor nation even before * took office.

I know no one wants to blame Clinton, but he was and is just as much in favor of this "global free trade" "race to the bottom" nonsense as any Republican ever was. He and Gore moved heaven and earth to get NAFTA and GATT/WTO passed.

I never will forget when Gore debated Perot concerning NAFTA on Larry Ling Live! and all the globalist corporate media crowed afterwards in unison, "Gore cleaned his clock!"

If China is about to start calling in our debt and deal only with Europe and Asia, as is rumored, it would be poetic justice. We have seen the enemy and he is us.

[European Socialist]

10. reminds me why I voted for Nader in 2000.

Maybe the the real election fraud is the fact that since the mid-70's our choices have been Repuke or Repuke-lite.

[Voltaire99]

20. Bravo

Well said, Michigander3.

Choosing between two clefts of the same giant derriere is little choice at all.

[aquart]

13. Uh, sorry, but a Democrat is involved in this.

Lyndon B. Johnson ran a war and the Great Society and financed it by debt. We have to take the heat on this one. We deserve to. But ain't no reason we can't learn from our mistakes.

War means HIGHER taxes, not lower ones, or the country is completely screwed.

[stevebreeze]

22. actually we went into debtor nation status under Nixon.

[dbt]

5. British Pound approaches $2.00?

:wow:

Sniff, sniff. Sumpn smell funny to y'all?

[phantom power]

9. It's going to be fun when Europeans and Asians take vacations

in America, and we'll get to listen to them say things like "How quaint this country is, and everything is so *inexpensive*!"

[Tracer]

12. Hah! I've already seen this!

There have been a couple of articles in the Boston papers regarding European vacationers coming to the U.S. because it is inexpensive for them both to fly and to purchase goods.

[KayLaw]

16. Same here

We live near Disney World and they're doing fine because of the weak dollar; the newspapers are actually honest about it.

[aquart]

14. Please.My cousin and her friends flew in from London

to spend a weekend shopping at the Gap. It was that cheap for them.

[KurtNYC]

15. Must be that super-liminal ad campaign in the London tube

"Mind the Gap" :-)

[theHandpuppet]

32. Unfortunate....

The Gap has one of the industry's WORST records with regard to the international sweatshop (slave-labor) market. I'm glad your friends found the goods so cheap -- I just wonder how many women and children had to work like trapped dogs in appalling conditions so they could enjoy a cheap weekend's shopping.

[Yavin4]

17. Dude, In NYC, I'm Asked for Directions All of the Time By People

with various accents and maps. The Europeans are having a grand old time here.

Sometimes I truly believe that the Republicans have a patent on irony. This is the party that preaches its hatred of all things European, and yet, their political/economic policies have opened the floodgates for complete European control of our country.

[jsquared]

24. Yes, Europeans will buy our assets on the cheap and Asian banks

will have the US government by the short hairs when it can't repay the interest on the 3 trillion or so in Treasury debt. It truly is ironic justice for such xenophobic unilateralist, isn't it. (Too bad we'll all have to suffer the consquences.)

[Democrats_win]

19. Skiing in Colorado also booming from Europeans but Americans cant afford

to buy gas to get to the ski areas anymore.

[Stella_Artois]

35. I'm doing this in 4 weeks

Spending 3 weeks in the US, getting married on a beach in Hawaii, visting Las Vegas and San Fran.

Our money really will go very far and we are not planning to take much luggage with us. We will be taking a LOT home though as we stock up on cheap clothes etc.

Can't wait.

[phantom power]

42. Make sure you are overheard saying...

How quaint we are! And how inexpensive everything is!

[GOPBasher]

8. Yes, this will keep happening for a while.

Do Republicans even care? The modern, Rapturist Republicans think that the world is ending very soon, so who cares about deficits?

These are very different from the old, reasonable Republicans.

[Voltaire99]

21. "The old, reasonable Republicans"--oh, please

Would those be the old, reasonable Republicans who slaughtered Filipinos by the thousands and Vietnamese by the millions, or the ones who wouldn't give mortgages to blacks?

The ones who spent twenty years destroying welfare or the ones who have howled for thirty years about restoring Bible indoctrination in schools?

The ones who have been pushing censorship for half a century or the ones who looked for Communists under every leaf?

The ones who imported coolies to build their railroads or the ones who have been cultivating vast international sweatshops for decades?

Mind, I'm not excepting old, reasonable Democrats from blame in the above. But this Keillorian tale of bygone decency is more than a bit shaggy. US history is rich with precedent for today's scumbags.

[GOPBasher]

33. I think you got me there, but let me say this.

I think there was a time when Republicans, though fiscally conservative and foreign policy hawks, at least weren't bent on turning the United States into a theocracy. I think they accepted freedom of religion. Also -- and I think this is important to note -- those fiscal conservatives of yesteryear would NEVER accept the mammoth deficits that W. is running up. They would want balanced budgets BEFORE tax cuts, and I think that's important. These new Republicans think the Rapture is coming within the next few years, so why worry about the debt?

Your points hold, but as you said in your post, we should remember that Democrats weren't exactly innocent in any of those things.

[Toots]

11. How can the World Bank justify keeping interest rates down?

It would seem inevitable for rates to rise or why would anyone be foolish enough to buy American Bonds. I read on here yesterday where Japan has lost over fifteen billion dollars since Bush* took office just because their investments are not worth as much now. I think the dollar has lost over thirty cents in value in just four years.

[drdtroit]

26. Actually in September of 2000

the Euro was worth $0.84, now the Euro is at$1.34, that looks like $0.50 in 3 1/2 years.
Yikes!

[muriel_volestrangler]

38. 'World Bank'? 'Federal Reserve', surely

I don't think the World Bank sets interest rates anywhere in the world - but especially not in the US.

[SOS]

18. Caribbean (US) hedge funds

keep the house of cards standing for another month.

"In January, Japan was a net seller of $10.2 billion in Treasury securities while South Korea reduced its Treasury holdings by $1.3 billion and Singapore by $400 million.

But most of the new private investment was $37.3 billion (41%) from Caribbean-based hedge funds."

NYT (3/16/05) on foreign purchases of US stocks and bonds:

http://www.nytimes.com/2005/03/16/business/16dollar.html?pagewanted=all

[jsquared]

23. Knowing the dollar's fate is in the hands of these guys is not comforting.

At least with the Asian central banks, there was a sense of mutual self-interest and a desire for stability and orderly markets. The dollar's value will now be based on the actions of short-term oriented, sheep-like speculators. So when it turns south, the herd will head out en masse.

[Art_from_Ark]

25. self-delete

[cire4]

27. It sure would be fine to have a job in the UK right about now....

After all, the minimum wage is almost 9 US dollars. You could work in a low-level service job in the UK for 3 months and come back to the US and live comfortably off the savings....

[burrowowl]

28. Also

one of the reasons OIL is going up! Still based on U$ dollar.
Who will win the economic war?

[ausiedownunderground]

29. Foreign central banks starting to line up at the exits!

Foreign central banks find themselves in a dilema. They all want to be the first out of the door, but they need to sneak out without the herd seeing them, unless it sets off a good ole stampede. Non of them want to be the unlucky last out, and it will be a very sorry bank that gets out last. The great "US Dollar Bail" is going to be a game of stealth and cunning! First out best dressed. Last out is not even worth contemplating. Nobody wants to be left with warehouse's full of US PESO'S. Should be interesting times in the corridors of central banks over the next couple of years!

[Fleshdancer]

30. Just think...it wasn't that long ago when the dollar was soaring and

the deficit was sliding...damn you Clinton and your economic logic!

Wow. I can't get over the sheer amount of destruction W and his pimps have done in just 4 short years. He's the best at being the worst.

[madmark]

31. I'm surprised it hasn't plummented more already.

I suspect maybe the weaker shorts trying to take obvious advantage of the trend are being caught in squeezes by savier traders. This would only go on for so long until the weaker shorts are wiped out and the trend can move south in earnest.

[Deja Q]

34. It's only going to continue, corpie amerika ain't doin' nuttin' 'bout it.

[zanne]

36. What's in it for Bush and Co.?

I'm no financial genius, but observing the strategies of this administration it's pretty obvious to me that there has to be something in it for Bush and his cronies. I've never seen them do anything that went against their own self-interest. Could somebody with a head for finance give me a clue about this?

[rockedthevoteinMA]

39. They are trying to turn the US into a third world country. That's

why they have appointed Wolfowitz to head the World Bank. That's why there is the drumbeat to privatize social security, break up unions, privatize utilities, etc. It's all so the corporations can get rich.
They have done it to most of the countries in South America. The reason why they hate Chavez so much is because he stood up against them, and said no thanks, I'll take care of this. Argentina is a mess, so is Brazil. In one of the countries, the price of water went up 700% after the world bank loans went through, because of the 164 stipulations attached to the loans.

Check out http://www.gregpalast.com/detail.cfm?artid=128&row=1
Lloyd Hart: Who is Joe Stiglitz?

Gregory Palast: Joe Stiglitz, he was the chief economist for the World Bank and he began to raise a couple questions about how the world bank was operating, because he knows that every where the World Bank imposed policy to reorganize a nation's economy the nation very quickly fell to it's knees and collapsed, gasping. And so he said, look we tried to help Bolivia, it went under. We tried to help Brazil, it exploded. We tried to help Indonesia, it was burning in riots. He said maybe there's a pattern here. And as chief economist he asked that some studies be conducted so that the neo-liberals, the privatizers, the proponents of the new global order could prove that their theories actually are producing economic miracles as they claim. They refused to do the studies because their own information was painting a clear picture. The only economies that seemed to be doing well were China, Vietnam, Botswana, Venezuela and the United States. What did all five of those economies have in common? All five told the IMF to go to hell and that includes the United States who does not listen to the IMF dictates at all. So Stiglitz said maybe we ought to change our methodology in dealing with the third world, in dealing with developing nations or even dealing with nations like Brazil. That our systems for eliminating barriers, eliminating unions, that cause pain, but not pain that which leads to gain, it's the pain that leads to collapse, failure and economic death. And for suggesting, simply suggesting that they reevaluate their positions, the World Bank fired him. He wasn't even allowed to resign, he was banished from the entire World Bank community. It was as if they cut off his head and stuck it on a pike and placed it outside the World Bank. But he may have had the last laugh as a couple of months ago he won the Nobel Prize for economics.

Greg Palast has a ton of info on it. Also, the book "Confessions of An Economic Hit Man" is supposed to be very good.

[zanne]

43. Thank you, rocked the vote in MA.

That helped.

[rockedthevoteinMA]

44. You're welcome. It hurt my brain when I first read about it.

and welcome to DU :hi:

The hardest part was realizing these men (and women?) hold no alliegance to any country, just to their corporations and bank accounts. I still have a hard time wrapping my mind around that... unbridled greed is horrible.

[0007]

37. The free fall has begun.......

It's All Over Now Baby Blue

[GOPBasher]

41. The dollar's free fall began a while ago, and it will

continue for the forseeable future. That's what a gigantic and exponentially increasing national debt will do.

[lonestarnot]

40. bushitler screwin' us every which way but loose! Keep fighting!

[struggle4progress]

45. kick