Article

2004-12-30 International-UN-NGOs

Dollar at new low as bearish mood persists

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Posted by Steve White 2004-12-30 12:06:05 AM|| || Front Page|| [11125 views since 2007-05-07] Top

#1 Two things to watch: US savings levels and Asian banks' treasuries purchases. If the former does not rise over the next two years, and if the latter decline significantly during the same period, then we're in trouble. But if Americans increase savings and the asians continue to finance our imports of their goods (by buying our debt), then it's not we but the Euroland nations that will face a very rough landing in the immediate term. Pity the Germans especially.

Posted by lex 2004-12-30 12:16:21 PM|| 2004-12-30 12:16:21 PM|| Front Page Top

#2 At some point, however, it's quite obvious that this nation will have to consume less (esp imports) and save more. A nation in which more than half the population has negative savings is not likely to remain a hegemon indefinitely. That condition can persist only so long as (primarily) foreign lenders finance American consumer debt-- a dependency that's nearly as dangerous as our oil addiction.

Posted by lex 2004-12-30 12:19:09 PM|| 2004-12-30 12:19:09 PM|| Front Page Top

#3 Those lenders like the consumer debt rates... Were we to buy our own goods whenever possible it would certainly help.

Posted by .com 2004-12-30 12:22:54 PM|| 2004-12-30 12:22:54 PM|| Front Page Top

#4 bingo. Buy American or semi-American where you can. If you have to have a German car, consider one made by DaimlerChrysler (love my 300C Hemi and my Pacifica, recommend 'em highly).

And buy less junk overall. Save more, invest more. Here's hoping Bush's economic agenda has this goal above all others.

Posted by lex 2004-12-30 12:46:39 PM|| 2004-12-30 12:46:39 PM|| Front Page Top

#5 I'm doing my tiny part. But I have to admit it's damed hard to find anything small (naturally low-priced), such as kitchen stuff, that isn't made in China. Cheeses the hell out of me to go to 3 different stores, wasted time and gas, trying to outfit my kitchen with stuff that didn't come out of a friggin' Chinese prison.

Posted by .com 2004-12-30 12:59:47 PM|| 2004-12-30 12:59:47 PM|| Front Page Top

#6 And buy less junk overall. Save more, invest more. Eat out less, greens are good for you, it wouldn't hurt for you to call your mother, when the last time you washed the car yourself? Does anyone really need this many books? Gym? Hey go out and mow the grass with a scythe.

Posted by Your Dad 2004-12-30 1:25:29 PM|| 2004-12-30 1:25:29 PM|| Front Page Top

#7 :-)

Posted by Frank G 2004-12-30 1:26:47 PM|| 2004-12-30 1:26:47 PM|| Front Page Top

#8 Yes Dad, you're right. Spend more on books and blogs; cut off all MSM subscriptions. Maybe a 3,500 sq ft house instead of a 5,000 sq ft one. Travel within the US instead of to Europe.

Posted by lex 2004-12-30 3:05:25 PM|| 2004-12-30 3:05:25 PM|| Front Page Top

#9 I read an article recently on some reputable site or other, that the U.S. savings rate is severely miscalculated. As I recall (and please remember that I am practically financially illiterate) the rate is calculated by subtracting gross national spending from gross national income. This does not, however, take into account investments such as home purchases (which are intially high debt:low equity), home improvement spending (which increases the value of the investment), monies laid out to acquire stocks, bonds, etc (which look like a wash to those doing the gross calculation, yet are not spent on consumables, throw off income over time, and provide a low-cost source of funds for the involved corporations) and, finally, the tremendous sums held in IRAs, 401Ks and pension funds.

Ultimately, the American economy is the most efficient in the world at circulating money, thus enabling us to accomplish a great deal more with a given amount than anyone else. And, the real savings rate, that is that part of the economic pie held by individuals for their future benefit, is good deal larger than it looks.

I would appreciate it if one of you financial types would check up on this and explain it properly... as I said, I am practically financially illiterate (much to Mr. Wife's despair, as he would love to be able to turn all that stuff over to me, and just do his job in peace, poor darling!)

Posted by trailing wife 2004-12-30 4:15:39 PM|| 2004-12-30 4:15:39 PM|| Front Page Top

#10 THE REASON goods and services "Made In America" are so "overpriced" is UNIONS!

Get rid of UNIONS, "home of the slothful"

Posted by Floting Granter5198 2004-12-30 4:32:36 PM|| 2004-12-30 4:32:36 PM|| Front Page Top

#11 I agree with you trailing wife. In the last 30 years, the US has almost completely changed from a debt to an ownership society. Folks don't put their money in savings accounts for little or no interest anymore. They put their savings into mutual funds, 401K's, other securities, and real estate.

The traditional banks have been the big losers in this transformation. So they lead the chorus every year about how the US savings rate is too low. The US banks compare us to big bank savers like Japan (stagnant economy) and Europe (stagnant economy) and lecture John Q. Public on how he should invest more in them and less in Microsoft.

I don't feel too sorry for the banks though. Like the tobacco companies, they have shifted their activities offshore, finding plenty of investors in the stagnant economies mentioned above. Meanwhile, they still have plenty of high quality assets in the form of mortgages and other notes that they hold here in the US.

Maybe I'm wrong, but the financial pundits have been predicting the downfall of the US economy for some time now and yet it never happens. There must be some other mechanism at work that has replaced the classical economic theory with its central assumption of high bank savings providing the capital for economic growth.

Posted by 11A5S 2004-12-30 5:10:33 PM|| 2004-12-30 5:10:33 PM|| Front Page Top

#12 Hey go out and mow the grass with a scythe.

I mowed the front lawn with a push mower when I was a kid. Never had a problem with it then, don't have a problem with it now. The catch is that I can't afford to buy a house around here with a lawn to mow. :)

Posted by Bomb-a-rama 2004-12-30 6:00:22 PM|| 2004-12-30 6:00:22 PM|| Front Page Top

#13 Well at least you at a mower BAR, when I was a kid we used stolen pop tops to slice each blade.

Posted by Shipman 2004-12-30 7:48:56 PM|| 2004-12-30 7:48:56 PM|| Front Page Top

#14 Did ya walk barefoot to school through the snow, uphill both ways, Ship? I lived in Escherville and I can tell ya it was confusing as hell!

Posted by .com 2004-12-30 7:53:15 PM|| 2004-12-30 7:53:15 PM|| Front Page Top

#15 The problem is that the Japanese work much harder than we do, use "quality circles" to make decisions and are buying key US properties as a result of their incredible economic growth -- oh, sorry, wrong decade..

Posted by Matt 2004-12-30 8:17:17 PM|| 2004-12-30 8:17:17 PM|| Front Page Top

#16 The really fun part of this is that the Chinese currency (RenMinBi (RMB), generally pronounced Yuan in written form) is tied pegged to the US dollar. Imagine what the result would be in this country if Chinese goods were suddenly 30% - 40% cheaper than they already are. Now, think what the smug Europricks that run the EU are facing. Not only are their goods priced out of the US market, but Chinese goods will wipe them out in their domestic markets. All in all, I'd rather have our problems than theirs.

Posted by RWV 2004-12-30 8:44:41 PM|| 2004-12-30 8:44:41 PM|| Front Page Top

23:57 Bomb-a-rama
23:50 Zenster
23:50 WingedAvenger
23:46 WingedAvenger
23:42 lex
23:40 lex
23:39 WingedAvenger
23:39 Bomb-a-rama
23:35 Poison Reverse
23:34 lex
23:32 lex
23:31 Sherry
23:31 WingedAvenger
23:29 lex
23:27 WingedAvenger
23:27 lex
23:23 Capt America
23:22 Poison Reverse
23:20 Sock Puppet of Doom
23:19 lex
23:17 lex
23:16 WingedAvenger
23:10 WingedAvenger
23:09 Capt America