The thing that is relevant is that its getting expensive for those of us who are paid in US dollars to go abroad for fun. Meaning that it will be harder to flee the clutches of the American female that many of us dread.
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The thing that is relevant is that its getting expensive for those of us who are paid in US dollars to go abroad for fun. Meaning that it will be harder to flee the clutches of the American female that many of us dread.
[QUOTE=CBGBConnisur]The thing that is relevant is that its getting expensive for those of us who are paid in US dollars to go abroad for fun. Meaning that it will be harder to flee the clutches of the American female that many of us dread.[/QUOTE]
Right. Like I said, if you think the dollar is going to continue to decline there are ways to hedge against it, there are mutual funds out there which increase in value based on decreases in the value of the Lehman US Dollar Index. Sometimes these are set up in such a way as to do a 2x increase for every point the dollar loses.
It sort of makes sense if you are sure you are going to travel overseas. To spell it out - if the dollar goes down, your vacation expenses are higher, but you've made money. On the other hand, if the dollar goes up, you lose money, but your vacation expenses are lower. It's a hedge of a kind for vacation planning, probably not the best idea for longer term investment plans. Depends on your situation.
At any rate, it's all risky and, since I'm not a financial advisor and I don't know your circumstances, it would be impossible for me to recommend anything more than looking into it.
Losing Iraq has much bigger consequences than Vietnam, first of all it has to with the "Petrodollar" trade, much of the reason we can borrow as much as we can and the reason the dollar has been strong up until recently has to do with the fact that oil is traded solely in dollars. If countries start to switch their oil trade in Euros, that means we are going to have to pay our debts, we have a lot of debt, and that will be a major catastrophe for the US economy.
Take the following example: Japan needs to import oil for domestic use. To do so it must first acquire dollars, as the dollar is the main currency in which oil is traded. To acquire these dollars, Japan must sell goods and services to the U.S. economy. The Japanese build a Honda to sell to the U.S. The U.S. federal reserve prints a certain amount of dollars and gives these to the Japanese in exchange for the Honda. The Japanese buy oil from Saudi Arabia using these dollars. The Saudis take the dollars and reinvest them in the Federal Reserve Bank of the U.S., and from then on they will only be used as a reserve currency. Therefore, all the U.S. had to do to acquire a Honda, was to print dollars. In essence, it has its very own money tree.
Knowing this its almost better to be paid in gold.
[QUOTE=CBGBConnisur]Losing Iraq has much bigger consequences than Vietnam, first of all it has to with the "Petrodollar" trade, much of the reason we can borrow as much as we can and the reason the dollar has been strong up until recently has to do with the fact that oil is traded solely in dollars. If countries start to switch their oil trade in Euros, that means we are going to have to pay our debts, we have a lot of debt, and that will be a major catastrophe for the US economy.[/QUOTE]
I don't think this is correct. Oil contracts may be denominated in dollars but that doesn't mean they have to be settled in dollars. They can be settled in whatever currency the buyer and seller agree.
Even if oil contracts are denominated in euros, we can still settled our contracts with Saudi Arabia, Mexico, etc in dollars. There is no need to immediately repay dollar denominated bonds.
[QUOTE=CBGBConnisur] The Japanese build a Honda to sell to the U.S. The U.S. federal reserve prints a certain amount of dollars and gives these to the Japanese in exchange for the Honda. The Japanese buy oil from Saudi Arabia using these dollars. The Saudis take the dollars and reinvest them in the Federal Reserve Bank of the U.S., and from then on they will only be used as a reserve currency. [/QUOTE]
CBGB,
Did you get this from an international finance book? Where did you get this information?
Yes, when we import goods from Japan or China, we pay them in dollars. But the dollars do not come from the federal reserve. They come from us, the consumers. Car dealerships pay Honda with dollars it got from selling cars to US consumers. Yes, China and Japan pay for oil in dollars, leaving Saudi Arabia with a shitload of dollars.
Here is where I disagree. If the Saudis (or Chinese) were permitted to by a boatload of expensive military aircraft or expensive military ships, then they would pay us back in the dollars we used to pay for imports. Ideally, our exports are supposed to pay for our imports.
Unfortunately, we have not been producing much of anything that the rest of the world wants to buys lots, or at least lots at the price we offer. That leaves the Saudis with a bunch of dollars and nothing to buy with them. So they invest them in dollar denominated assets.
Sometimes those assets are US firms. Most of the time those assets are bonds our federal government needs to issue in order to finance our huge budget deficits. The federal reserve has little to do with this. It is the Treasury Dept. that issues the bonds. The only role the Fed plays is that the bonds are sold at a trading desk in New York City that is controlled by the Fed.
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[size=-2][b][u]EDITOR'S NOTE[/u]:[/b] [blue]This report was deleted because the subject was not related to the purpose of this Forum, which is as follows:
The purpose of this Forum is to provide for the exchange if information between men on the subject of finding women for sex.[/blue][/size]
This system only works if all oil transactions are conducted in US Dollars, that was the real reason we went into Iraq, Iraq sold oil in Euros in 99', and that was the real reason for the invasion of Iraq. The government has been sabre rattling Venezuela, why? Venezuela is a Christian country, it has little to do with Islamic terrorism, but its a major oil producing nation. Russia and Iran are going to price their oil in Euros too. The Saudis and other oil producing nations reinvest their surplus dollars into US treasury bonds, then the Treasury prints money that could be used to purchase more goods. The Euro threatens this mechanism, the damage to the US economy would be catastrophic. European nations partly introduced the Euro to purchase oil without US Dollars thereby reducing their economies' dependence on exporting goods and services to the US.
The only ace is the fact that China keeps buying US treasuries to artificially reduce the value of their currency to the US dollar, so they can pour cheap goods into the US, but its only a matter of time before they stop financing our debt. So in effect China has been holding up the US economy.
The US has kept the petrodollar system intact with a powerful military force, the will to use that force is waning, with a Democratic Congress and a high chance of a Democratic President, you will see a softening of US foreign policy, so more oil producing countries will not be intimidated, and will start pricing their oil in Euros. Its not going to happen overnight, but within two decades at maximum, the US dollar will not be the world's dominant reserve currency. Even the Euro will be threatened once China becomes transforms from an export economy to a consumer based one in the next 20 years.
[QUOTE=CBGBConnisur]This system only works if all oil transactions are conducted in US Dollars, that was the real reason we went into Iraq, Iraq sold oil in Euros in 99', and that was the real reason for the invasion of Iraq. The government has been sabre rattling Venezuela, why? Venezuela is a Christian country, it has little to do with Islamic terrorism, but its a major oil producing nation. Russia and Iran are going to price their oil in Euros too. The Saudis and other oil producing nations reinvest their surplus dollars into US treasury bonds, then the Treasury prints money that could be used to purchase more goods. The Euro threatens this mechanism, the damage to the US economy would be catastrophic. European nations partly introduced the Euro to purchase oil without US Dollars thereby reducing their economies' dependence on exporting goods and services to the US.
The only ace is the fact that China keeps buying US treasuries to artificially reduce the value of their currency to the US dollar, so they can pour cheap goods into the US, but its only a matter of time before they stop financing our debt. So in effect China has been holding up the US economy.
The US has kept the petrodollar system intact with a powerful military force, the will to use that force is waning, with a Democratic Congress and a high chance of a Democratic President, you will see a softening of US foreign policy, so more oil producing countries will not be intimidated, and will start pricing their oil in Euros. Its not going to happen overnight, but within two decades at maximum, the US dollar will not be the world's dominant reserve currency. Even the Euro will be threatened once China becomes transforms from an export economy to a consumer based one in the next 20 years.[/QUOTE]Again, where are you getting your information? Can you cite a source, or better yet sources, that supports your version of how international finance / international payment system operates?
Here's one link:
[url]http://www.energybulletin.net/7707.html[/url]
Here's a book written about the Petrodollar:
The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets, the author is David E Spiro.
There's a politics thread. Please use it, gentlemen.
Yes, I'm sure you can conceivably connect anything to AW, but this is becoming a stretch.
How about we discuss the price of eggs in S. Africa?
Thank you.
Well once again the relevance is that most of us use US Dollars to finance our escapes from the American female, so of if something happens to that we lose our escape hatch.
Just because things change in the financial world it doesn't necessarily mean you "lose your escape hatch".
Things might get more expensive. But that's nothing new is it? The only way things will change significantly is if there is a total financial collapse of some sort. This may very well happen some day considering the 10 trillion dollar cumulative trade imbalance the US has with the rest of the world.
However, I seriously doubt that, all of a sudden you're gonna wake up poor, and the rest of the world is rich. Anytime things change, some people come out losers and some come out winners. The best thing to do is do what you should be doing anyways. Save up some of your $$$ each time you get paid and don't keep all your eggs in one basket.
The UK used to be called Great Britain.... they're not so great anymore. Not relative to the other world powers. But, from what I've seen, the average Brit still does OK for themselves. I seriously doubt there will ever be a time that most Americans will be poor compared to people in other countries.
That means, for a guy who works hard and makes something of himself, there will always be good-looking foreign women out there ready to be claimed.
Rock
[QUOTE=Rock Dog]That means, for a guy who works hard and makes something of himself, there will always be good-looking foreign women out there ready to be claimed.[/QUOTE]
This is not accurate, Rock. People don't 'make something' of themselves, rather, society makes them what they are. The lower classes work harder than anyone, Rock, and, in the US, can never afford foreign travel or prostitutes. No, Rock, in our capitalist society one's economic condition is determined by forces outside one's control - namely economic class, rigidly enforced by State power.
Hi All,
Quote from Rock Dog: "The UK used to be called Great Britain.... they're not so great anymore."
Great Britain is in fact a geographical term and nothing to do with empire or the people or government of Britain thinking they are great! It is made up of England , Scotland and Wales ( not Ireland )
The "British isles" are all the islands in the region including the island of Ireland
NB The "United Kingdom" is a political term refering to the "United Kingdom or Great Britain and Northern Ireland"
Check out the link
[url]http://en.wikipedia.org/wiki/Great_britain[/url]
cheers
Munchie
[QUOTE=Rock Dog]Just because things change in the financial world it doesn't necessarily mean you "lose your escape hatch".
Things might get more expensive. But that's nothing new is it? The only way things will change significantly is if there is a total financial collapse of some sort. This may very well happen some day considering the 10 trillion dollar cumulative trade imbalance the US has with the rest of the world.[/QUOTE]
When things get too expensive, one DOES lose one's escape hatch! And people DO wake up poor(er) one day!
Tens of thousands of middle-income homeowners took out second mortages in 2002, 2003, and 2004. Now those same homeowners are facing falling home values, rising interest rates, higher mortgage payments, and stagnant income.
Mongering is not a low cost hobby. Preparing to retire abroad is not a low cost proposition. When costs rise and US incomes fall due to poor management of the economy, we do end up fewer options for escaping from AWs.
My caveat is that if you are rich enough, none of what I said applies to you.