Another indicator for Global economy: http://money.cnn.com/2008/03/27/technology/moritz_cisco.fortune/index.htm?postversion=2008032716
If you are interested in topic of thread and have 21 minutes available and are willing to sit thru a few self-promotional inserts by the Bloomberg interviewer, then it is hard to beat listening to George Soros at: http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vrYRnlw1Rv.Y.asf For a good understanding what the global economy needs and what is likely to be coming. (I say that as he agrees with what I have been posting here for a few years.) Things like a "tipping point is near" "willingness to hold dollars is dangerously dropping," "China is growing - its Yuan is still under valued and will appreciate at least 10% /year" - this will add to US inflation as Wall_Mart raises it prices … etc. The FED has just been given more work to do. - Its job of trying to control inflation while stimulating the economy, making jobs, etc.* was not hard enough and getting boring, I guess. Please Register or Log in to view the hidden image! He told that he gave 27 million dollars to the anti-GWB forces in the last election campaign as he thought the world would be “MUCH BETTER OFF, if GWB were not elected president of the US." - But he will give much less this time as it does not make so much difference now. - He did not explicitly say, as I do, that a new "greatest ever" depression is now unavoidable. In fact, he openly supports Obama as only he has the "charisma to unite the country" and represent "new blood." He makes a good point about value of "experience" - I.e. it is not very important as the next president will have access to the same, often conflicting, POVs regardless of who he or she is. What is important is the judgment to select among these adviser's conflicting recommendations correctly. - More of why he support Obama even though he has never spoken with him. -------- *I always knew I would never get the Nobel Prize for my modest contributions to physics, but now expect one in "ECONOMICS" for following suggestion: Ben should fire up his helicopter again, but this time it is loaded with a special type of dollars. They suddenly self destruct - turn to dust - at random intervals but all gone are gone in about a week. If the fleet of helicopters is small then let everyone know this fact. Their velocity thru the economy in that week (and all the regular dollars which look exactly the same), is still limited by the speed of light, but it will break all prior records by several orders of magnitude. – Thus, only a few helicopter trips over some major US cities can make an "instant recovery” of the economy with no permanent increase in the money circulating to drive inflation. - Who wants the honor of nominating me FOR THE ECONOMICS PRIZE? :shrug: I'm too Please Register or Log in to view the hidden image! to do it myself.
What do you mean "fun" - I am serious. Certainly the CIA labs can make these special dollars in a week.* Note I have edited my post to describe them better - they suddenly turn to dust and do so at random intervals during the week. If not too much trouble please edit your post of my suggestion by cut and past the edited version into your quote. I must say SAM, I was sort of counting on you to nominate me so the suggestion would have the weight of two "Bricks." - Guess I will need to PM some of the Russian posters active here. Please Register or Log in to view the hidden image! ------------- *They made the "Saddam is ordering uranium Nigerian letter" in only three days after GWB asked for it, so rumor has it. That required learning what Nigerian stationary looks like.** They certainly know well what the US dollars looks like - Many millions have passed thru their hands and even two planes loads have disappeared recently - making them disappear one at a time should be easy. Please Register or Log in to view the hidden image! **Unfortunately, the pressure of time made the CIA copy from an older version of the Nigerian atomic energy agency stationary - so everyone later knew it was a forgery, but by then GWB had invaded Iraq so it severed it purpose OK.
I can see major repercussions to world economy with disappearing dollars of more than one kind!Please Register or Log in to view the hidden image!
Billy T, ... jobs had disappeared and politicians do not like that. (E.g. Clinton and Obama in their speeches in Ohio etc.) ] and Unfortunately, as the US de-industrializes (look at Ohio etc) and becomes more of a service than durable goods provider the cost of the labor increases relative to the materials in the potential exports. Don't believe everything that the democratic candidates say about Ohio. They are interested in votes and not facts. It is true that Ohio's maufacturing has taken a beating, but 90% of that loss was in Automobile plants, Steel foundries, and Auto Parts suppliers. (see a pattern?) Manufacturing still makes up 15.3% of Ohio's $461 billion GDP. And while you claim this "de-industrialization" is the doom of exporting potential, Ohio's exports have increased from 12.6 billion in 2003 to 42.4 billion in 2007.
Absolutely my point. I was not making any comment about Ohio, only illustrating my point that closing of factories gets the attention of politicians very quickly. - be that in Ohio, or in Brazil, which is what my post was speaking of. I only mentioned Ohio as many more know about the factories closed there than those closed in Brazil. The reason why these factories are closing is entirely different: In USA it is mainly the relatively high cost of labor compared to in Asian countries or Mexico etc. In Brazil labor cost are competitive, but Brazil suffers from the "Dutch disease." I.e. the combination of the world's highest real interest rates and every increasing earnings on exports of food stock and raw materials, especially iron ores (World's largest exporter, with China as main customer. China has agreed to a 73% increase in the price per ton for 2008!) Thus, the flood of dollars into Brazil just will not stop. It is making the Brazilian Real too strong. The Brazilian factories that once dominated many markets with high labor items, such as shoe, are closing or closed. They get paid in dollars, which are rapidly losing value and must pay their workers in Real which are rapidly increasing in value - The sales no longer cover the cost of production - negative profits. A couple of years ago, I sat in the ladies shoe department of NYC Macy, (the main store, near 34th st) while wife shopped. Bored, I began to pick up shoes and see where they were made. 3/4 came from Brazil, but bet next time I do this less than 10% will be "Made in Brazil." Brazil has world's largest cattle herds - lots of cheap leather and cheap labor, but now with the excessively strong Real, cannot sell its shoes externally at a profit. That is example of the "Dutch disease." - So called as when oil and gas were discovered in the North Sea, the sudden flux of dollars into Holland, put their manufactures out of business also as the Gilder rose rapidly in value. Now that the Dutch use the Euro, the rise in the currency is less rapid when something like that happens, but Germany is exporting a lot, earning dollars etc. so the Euro is rising in value as the dollar falls.
Falling Dominos department http://www.reuters.com/article/businessNews/idUSN0833823520080408?feedType=RSS&feedName=businessNews NEW YORK (Reuters) - Shares of First Marblehead Corp (FMD.N: Quote, Profile, Research), one of the largest securitizers of student loans, plummeted on Tuesday after a major client filed for bankruptcy protection. First Marblehead shares fell $3.20, or 41.6 percent, to $4.50 in premarket trading. The decline came after The Education Resources Institute Inc, which calls itself the largest not-for-profit guarantor of U.S. private education loans, filed Monday for Chapter 11 bankruptcy protection. It said rising borrower defaults and credit market problems damaged liquidity, and that its viability would be threatened absent a bankruptcy filing.
Also well worth reading is WSJ's report of Paul Volker's speach to NYC financial group: http://online.wsj.com/article/SB120769723589099695.html?mod=googlenews_wsj
"...``The turmoil in global financial markets remains entrenched and more protracted than we had anticipated,'' the officials said in their statement. ``Near-term global economic prospects have weakened.'' The G-7 pledged to implement further monetary and fiscal policies ``as appropriate'' without giving details. ..." Billy T translating the G7's above text into plain English: "Its serious, but we haven't got a clue about what to do." Quote above from: http://www.bloomberg.com/apps/news?pid=20601087&sid=a7Yh8jULL1W8&refer=home
The TV told me the "slow down" would be mild and not last much longer than early next year. Now, are you telling me the TV doesn't know something?!? That doesn't make sense...
If you believe everything TV tells you there is no hope for you. You should even question at least half of what TV shows you. Trust you logic operating on well established facts is a better rule.
I think Michael is being facetious, or maybe I just hope he is. Please Register or Log in to view the hidden image!
Meanwhile, the unelected leader of the US economic system, who will remain in power for the next 12 years, has publicly declared that his ongoing devaluation of the dollar is just groovy. Bernanke explained, under questioning from Ron Paul, that the eroding dollar is only a problem for Americans buying foreign goods!!!??? You mean like oil...Ben? :bugeye: Or everything at Walmart?
China has begun dumping the dollar, inspite of teh effects on inflation and growth. Rice prices are going up in India, so I anticipate that middle men will start hoarding to artificially raise prices. Which could mean more inflation, inspite of the rice export ban. Hmm time for the Asian policy makers to think quick on their feet. More dollars or less?
Walmart, also known as "ChinaMart," has been increasing the prices. They had to as Yuan was more than 8 to the dollar and is now less than 7/$. – I.e. about 15% more valuable. This is making it doubly hard on Joe American: The purchasing power of his salary has been dropping, even for US made items, and prices at ChinaMart are up about 15%. For years, the US has been wishing the Yuan were allowed to rise in value rather than try to understand and fix the Balance of Payments problem by US actions.* As they say: "Be careful what you wish for - you might get it." In this case, more inflation, which makes the dollar less desirable to hold, forces interest rates to rise, this slows domestic production, making more dollars chasing less domestic goods, more inflation... Etc. - I.e. a positive feed- back loop which ends in dollar collapse, I think, that rapidly converts to the worst depression ever in US and EU. As Joe goes, so goes the US – down the tube. Why cannot the Neocons understand this? Henry Ford did years ago. --------------- *Blame someone else is always easier for politicians. GWB's policies have often been exactly the wrong thing to do. Starting a needless expensive war is obviously one, but his corn to alcohol program has made less of the mid west's fertile land available for export of food stocks. Really the main natural advantage the US has in global commerce is this agricultural potential of the mid west. Many countries, can design and manufacture things better and at less expense than the US can now. Financial services jobs etc. are also leaving the country. Even many medical jobs, such as reading X-rays**, getting a "tummy tuck" are being exported. Soon the only jobs not exported will be cutting someone hair, delivering a pizza, or trying to sell one of the growing surplus of unsold homes. etc. **While emergency X-rays are still "read" in the US, many routine ones taken at major clinics, go thru the internet to a doctor in India who reads them and writes the report in English of course, while the US sleeps. That report, at 1/3 the cost, is back at the clinic the next AM, waiting for the local doctor to return to the clinic. Ironically, the creation of the internet was a military projects intended to make the US more secure; but in fact is helping to destroy the US economically. (The military mind, seldom gets things correctly.)
SAM, "Dumping the dollar" is a misnomer began by Billy T. China is using its foreign currency reserves (mostly dollars) to invest in corporations and financial stocks rather than 'stuffing them in a mattress'(holding them). Only a few years ago, China did not have adequate foreign reserves to invest, in fact China borrowed $800 million from The IMF, the maximum amount they could get. They have since became a large exporter of manufactured goods, much of which is sold to the US. China has an imbalance of trade with the US, exporting much more than they import. That is where the excessive US dollar reserves comes from. Much of those foreign reserves are invested in the US and Europe. The second part of your statement "inspite of the effects on inflation and growth" is unconnected to diversifing their foreign currency reserves. Growth comes from a healthy export economy, inflation is a direct by-product of that growth. It is not the only reason for inflation, as an increase in the cost of imported goods also contributes to inflation, as well as a higher standard of living for the working class (increase in wages). Yes, rice and all grains are going up worldwide. The middlemen can contribute to price increases by hoarding, causing a shortfall of supply to consumers. Speculators in the commodities market will also drive up prices. The consumers themselves can also contribute to price increases by 'hoarding' (buying and keeping on hand a larger than normal supply). They do that, of course, because they want to make sure their families have rice to eat in case of a severe shortage and because they know rice will only increase in price in the future. 'Buy it before it gets too expensive', which causes a short term shortage guaranteed to increase the price. The rice export ban is good for the Indian poor of course, but it shits on the people of other countries that depend on imported rice to feed their families. There is always this give and take, what is good for one country's health can have devastating effects on other nations. In the US, our achilles heel is oil. SAM, you do realize oil will be India's achilles heel in a very few years, don't you? As your country's economy and standard of living improves, rice and food will take a back seat to energy, energy to power your industry, fuel your greater and greater number of cars and mechanize your farming for greater productivity. Mechanizing your farming will mean increased numbers of ex farm workers getting jobs in factories, for which they will need transportation and fuel to get to work and back home. Sound familiar?
2inquisitive: I was basing my "China is dumping the dollar" not on Billy T (although I believe he is correct), but this: The rice export ban is not good for anyone currently, rice prices are through the roof and its the middle man who benefits, not the poor farmer or the consumer. We need to tackle this ridiculous system. As for energy, yeah, we are going to have serious problems if we don't catch up on the infrastructure. SOON.
