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Originally Posted by aceventura3
Host,
What are you going to do to celebrate $100 a barrel oil, when the moment hits?
All of your wishes may come true, the rich in America are getting poorer by the minute with the falling dollar. Petro China was the first company to hit a $1 trillion valuation, not a greedy US company. China has announced it is selling dollars for other currencies, even Jay-Z did not use US currency to flash to his video girls, in his latest video he used Euros.
But on the other hand:
Since August of 2003 the economy has created 8.3 million jobs and has had 50 months of uninterrupted growth.
Per capita income has grown about 13% since Bush took office.
Real wages are up 1.2% since Bush took office ( a rate higher than in the 90's).
There was a 7% rise in tax receipts in FY 2007 and a 12% increase in tax receipts in FY 2006.
The deficit is 1.2% of GDP well below the historical average and trending down.
All of this in spite of the real estate melt down and subsequent credit crunch. 
Please tell us why we should panic over the falling dollar, while on the other hand we needed to panic over the strength of the dollar when foreign investors where investing too heavily in our national debt and were going to cause our economic doom?
It is hard to keep up with what I should be panicking about, but I am betting you can help. I know I should have taken your advise about the sub-prime mortgage issue, you seem to have your finger on the pulse of what people are going to over-react to. |
Hey ace! Where you been?
I don't celebrate skyrocketing oil prices, they are a consequence of a falling dollar, and the dollar falling is a consequence of huge twin deficits that did not exist, seven years ago. Back then, the US struggled under a $425 billion annual trade deficit, and required only $18 billion in fiscal year 2000 borrowing to deal with US treasury debt increase that year. Compare recent deficits of $800 billion plus annual trade deficit....probably more than $3.5 trillion total for last four years, and $2.1 trillion total US treasury deficit increase in that four year span. So, $5.6 new debt owed to foreigners to finance that twin deficit, compared to say..... less than $1.75 trillion to finance those twin deficits as a four year total in '96 - '00....
...The jobs created siince, 2003...how many do you guess in real estate, construction, and finance....al related to a real estate boom caused by artifically low interest rates. It wasn't driven by technological innovation, so no continuing pay back, as the late 90's internet bubble did...and still is....no,
just a bunch of flippers and speculators, stimulating overbuilding catalyzed by artificially low interest rates:
Quote:
http://www.marketwatch.com/News/Stor...-0E54430C3A96}
By Rex Nutting, MarketWatch
Last Update: 1:56 PM ET Oct 31, 2007
WASHINGTON (MarketWatch) -- As odd as it sounds, <h2>the government reported that inflation was at a four-decade low in the third quarter, primarily because import oil prices rose so much.</h2>
If you don't understand that, welcome to the confusing world of national income accounting, where up sometimes is down, and where sometimes one plus one can equal zero......
Quote:
http://boards.prudentbear.com/bbs_re...snsa=A#M579508
<h3>The policies of the Fed and Bush administration are, in a very real way, acting to steal money out of the consumer and give it to Wall Street.
Why? One of the reasons oil is so expensive is that the U.S. dollar is so weak. The weakness in the USD is, in large measure, due to the fact that U.S. interest rates are artificially low. They are kept artificially low because the Fed is afraid to act responsibly, as such an action would upset the stock market and Wall Street. If Bernanke were suddenly to morph into Volcker and raise rates by 200bps the dollar would dramatically strengthen.
I'm sure that the fact that the Texas oilmen and the oil companies are reaping a windfall does not cause Bush to lose any sleep.
Of course, higher oil prices really don't hurt the consumer. After all energy, food and housing don't contribute to the CPI. As long as a person does not eat or live in a house or apartment or require heating in winter or gasoline for their cars, they won't notice any inflation.</h3>
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Quote:
http://news.yahoo.com/s/ap/20071101/...fed_markets_10
Fed pumps $41B into US financial system
By JEANNINE AVERSA, AP Economics Writer Thu Nov 1, 5:15 PM ET
WASHINGTON - The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, <h2>the largest cash infusion since September 2001</h2>, to help companies get through a credit crunch.
The action came one day after Fed Chairman Ben Bernanke and all but one of his central bank colleagues voted to slice a key interest rate. It was the second time in six weeks that policymakers acted to protect the economy from the effects of the housing downturn and credit troubles.
Wall Street took a nosedive with the Dow Jones industrials losing 362.14 points to close at 13,567.87.
The Fed on Wednesday ordered its key rate, called the federal funds rate, to be lowered by one-quarter of a percentage point to 4.5 percent. That followed up on a half-percentage point cut in September. Those two rate reductions might be sufficient to help the economy make its way safely through trouble spots, Fed policymakers indicated.
The funds rate affects many other interest rates charged to millions of individuals and businesses and is the Fed's most potent tool for influencing economic activity.
The Federal Reserve Bank of New York, which carries out the central bank's open market operations, moved Thursday to inject $41 billion in temporary reserves into the financial system.
A New York Fed spokesman said it was the largest single day of operations since $50.35 billion was pumped into the system on Sept. 19, 2001, following the terrorist attacks on New York and Washington. He declined further comment.
Fed policymakers at their meeting on Wednesday noted that the "strains from financial markets have eased somewhat on balance." In the past week, many Fed officials have described the state of financial markets as fragile.
Bernanke and other Fed officials have said it will take time for the markets to fully recover from the credit crisis.
Since August, the Fed has been pumping cash into the financial system to help ease strains from the credit crunch. It also has cut its lending rate to banks — a third such cut came on Wednesday.
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...and, there is no growth this year, ace. Read the above Marketwatch report carefully. Inflation due to dollar weakness and high oill has negagted the actual US stock market gains...no gain at all if measured in euros....look how small the rise in oil and gold actually are if those two were bought with euros in 2002....
It's much worse than you think, ace....and it isn't an overreaction to sub-prime. Mortgage bond tranches all the way up to AAA have been clobbered. All of the paper had toxic, high risk loans mixed into it, and Moody's S&P and Fitch failed to examine and actually skeptically rate the mortgage and corporate bonds. Investors did not make demand clauses when they bought the bonds, they simply look at how the above rating firms, rated the paper....