Why current administration doesn't intervene US$ decline?

Discussion in 'Economics' started by a529612, Nov 11, 2007.

  1. Oh man. so many errors I dont know the best place to begin. we will start in order. 1-The fed raising rates would attract foreign investement. Would make the dollar strong. 2- oil prices are sitting now with a pop in the dollar. 3- higher dollar = lower oil 4- Imports make no sense from europe given current exchange rates with the euro. 5- imports from china are the only way to combat inflation and for the average american, much more practical.

    The big problem is too many people are getting away with too much product from the chinese. The more product you have means the more wealth you can accumulate. Paulson does not want this nor do the bankers. They would rather the chinese throw in the towel to their "special interests".

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    #11     Nov 12, 2007
  2. Today was short term bottom on dollar. People got all concerned all a sudden, and then it reversed. Things never change...

     
    #12     Nov 12, 2007
  3. I never see the word Stagflation mentioned on this site.
     
    #13     Nov 12, 2007
  4. piezoe

    piezoe

    Shoeshine, I want to go on record as disagreeing with the premise in your post that there is little that Congress could have done to prevent the freefall of the dollar and that what is happening to our currency is a result of globalization.

    As I stated earlier, i believe the weakness in the dollar is largely a consequence of excessive deficit spending resulting in equally excessive borrowing leading to the political necessity of monetizing the resulting debt.

    Congress was ineffective in stopping the President from engaging in unconstitutional, and therefore illegal, acts and seizing powers not granted to him, and this led directly to our present fiscal situation. Nevertheless the Congress had all along, and still has, the power and authority to stop him from committing these acts and seizing these powers.

    The weakness in our currency is not a result of globalization, but a consequence of our poor fiscal management. The myriad of countries that are equally affected by globalization but have maintained strong and robust currencies is sufficient proof of this. Furthermore it is not necessary to have a weak currency to have a robust export economy. There is ample proof of this as well.
     
    #14     Nov 12, 2007
  5. Silly geese!

    The government has little power over US dollar. They can only play with the stats and tell you all Bullsh*t all day long.
     
    #15     Nov 12, 2007
  6. I am completely opposed to the deficit. But I don't see it as causing all the things you said. I believe interest on the deficit, for example, is "only" about 12% of the total budget. That's ugly and stupid, but I don't see how it lead to all the above?
     
    #17     Nov 12, 2007
  7. 1 - Not kept rates so low for so long
    2 - Not increase and increase the money supply
    3 - Not spend, spend, spend like drunken sailors
    4 - Maybe have done something in when the mortgages were getting rediculously out of control
    5 - Not sent us in to an unwinnable war

    Not much they can do now. Stagflation anyone?
     
    #18     Nov 12, 2007
  8. 2 is your best argument imo. 2 led to a mountain of liquidity which created a feeding frenzy that created an environment ripe for excesses in lending behavior.

    Btw, don't 1 and 2 contradict each other? They were caught between a "rock and a hard place", weren't they?
     
    #19     Nov 13, 2007
  9. Having low interest rates is likey to devalue a currency. Heard of the carry trade?

    Increasing the money supply substantially is going to devalue a currency unless there is a greater demand for the currency.

    What happened to "capitalism" and letting free markets dictate the interest rate.
     
    #20     Nov 13, 2007