GWB-My government has a strong dollar policy

[bitwhys]

have you seen the part about the $51T (trillion) fiscal gap? That's 5 times the US annual GDP. Its a social security thing.



First baby boomer comes of age in 4 years.



an interview with Larry Kotlikoff



a drooping dollar isn't going to help a domestic problem.

[Galmin]

Quote:

---

Bush Says He Supports Strong Dollar, Will Address U.S. Deficit.

---

Quote:

---

Nov. 21 (Bloomberg) -- U.S. President George W. Bush said he backed a "strong dollar'' and would work to cut the U.S. government budget deficit.



"My government has a strong dollar policy,'' Bush said following a meeting with a meeting with Chilean President Ricardo Lagos at the end of the Asia Pacific Economic Cooperation Forum in Santiago

---

What's wrong with this picture?

Euros to USD, 120 days



Dollar Stuck Near Record Low Vs Euro



Bush's government has a strong dollar policy? They would not have been any more successful in losing 50 points toward the Euro in four years with an "extremely weak dollar policy".

[Galmin]

Hi Bitwhys!



At 51T, closing down the entire country would probably be a good idea. A deficit of half a trillion is bad enough

I do not subscribe to the gloomy outlook that Kotlikoff suggests. Nevertheless, the US needs someone at the helm who can count.

[bitwhys]

one paper (a Canadian review of both countries for Finance Canada) I came across places a need get ahold of more just more than 4% of the US GDP through to 2075. that's no drop in the bucket.



lost the link, tho.

[russky joe]

This is from an Oxford professor with no political axe to grind:



"US debt levels have serious strategic implications with an administration intent on using military

means to reshape the world. US military spending has risen by 27% in real terms under Bush. A sudden

fiscal crisis might force an inopportune rethink of military strategy, just at the moment when the

strategy was getting more demanding and costly before (supposedly) easing off. This would be

tantamount to adding a “liquidity crisis” in global security, to the liquidity crises taking place on other

parts of the balance sheet. Military adventure at a time of fiscal imbalance is not without risk."



What it means in simple terms is that the 'world's richest nation' is biting off more than it can chew. If the dumb Bush govt. causes any more trouble it simply won't be able to afford to put it right, leaving vacuums all over Latin America and the Middle East into which terrorists and crooks can move. We might even have to cut back the support for Israel. This could be the frickin' wannabe empire that over-extended itself before it even got off the ground.

[Galmin]

The dollar has dropped 40% in two years. usually such a monetary change would lead to a tremendous boost for the exporting industry and had the value decline of the currency been a controlled one, the boost would have been there.

[russky joe]

Export? Export what?



We've hived off most of our frickin' manufacturing abroad.



These are our main exports: capital goods, automobiles, industrial supplies and raw materials, consumer goods, agricultural products.



There's not one damn commodity there that can't be manufactured cheaper in the Far East, no matter how low our dollar falls. The 'controlled fall' theory is bullshit, the only purpose of the 'control' would be to avoid panic in the markets.



The underlying domestic economy is really frickin' unhealthy, and the main problem is that our consumers are saturated.

[Galmin]

Quote:

---

Export? Export what?



We've hived off most of our frickin' manufacturing abroad.

---

True, however, the US was up until last year the #1 exporter in the world (Germany hold that position today) and is today #2.

Quote:

---

The 'controlled fall' theory is bullshit, the only purpose of the 'control' would be to avoid panic in the markets.

---

I do not agree. A controlled decline of value of any currency (and I mean a fall with full control on accelerator and break, not a free fall with a stampeeding deficit) can, when properly executed, be very effective in stimulating the domestic industry.



It is crucial that it works, because if it doesn't you'll have payed dearly in monetary value for nothing (not that I believe the decline of the dollar as we know it right now is in any way controlled).

[russky joe]

I'm not sure about this.



What are we exporting? Is that 12% in monetary terms? If so I can believe it, but in terms of the number of manufactured commodities we just can't be the world's #2 exporter. No way.



As for 'controlled' currency devaluation, there's been some successes (ie Britain) but a helluva lot of failures (ie Italy) in the 'control' stakes. The other thing is that Bush can only go so far with this coz American corporations want the dollar to be the preferred currency for third world countries to earn.

[Galmin]

Quote:

---

What are we exporting?

---

Weapons?

Quote:

---

Is that 12% in monetary terms?

---

Yup. Monetary terms. Goods and services. The World Bank cannot count with anything else.

Quote:

---

The other thing is that Bush can only go so far with this coz American corporations want the dollar to be the preferred currency for third world countries to earn.

---

Already Khaddafi is looking the Euro way, is it time to declare the Shell contract null and void and invade Libya?

[russky joe]

So lemme get this straight.



If resource-rich third world countries move away from the dollar as their trading currency Bush and his goons will strongarm them back into the fold?



Why does Europe sit back and allow itself to be frozen out and pushed around like this?

[RonOnGuitar]

Most Europeans really just aren't familar enough with free market economics - or economics in general, other than in the unworkable "dream world" theories (as termed by Czech President Vaclav Klaus) - to understand why a weak dollar is good for America.



The EU's working assumption is that if you take 10 or so bad economies and put them together you'll get one good big dictorial economy.



Americans have learned experientially, over the course of centuries, to not get too excited or too woeful. It's not a new ballgame to the US. But that's not to say all Europeans are naive or are easily misled by temporal economic ebbs and tides:



Italy's Berlusconi says euro strangling economy



ROME, Nov 22 (Reuters) - Italian Prime Minister Silvio Berlusconi has launched a savage attack on the European Union's budget rules, saying the Stability and Growth Pact had to be reformed if the eurozone wanted to see strong growth.



In a hard-hitting column to appear in Tuesday's edition of Il Foglio newspaper, Berlusconi repeated his threat to bring down his government if recalcitrant coalition allies refused to back his plans for income tax cuts in 2005.



Berlusconi said the cuts were needed to revive a lethargic economy, but stressed the strength of the euro currency was also weighing heavily and called on his EU partners to revise the Maastricht Treaty on which the stability pact is based.



"The blessed introduction of the single European currency has thus far produced the exact opposite result of what the euro was created for -- an asphyxiated economy and hobbled growth under the burden of 'stupid' ties," Berlusconi wrote.



"In Europe there is an extremely strong drive to review aspects of the rigid ties of the Maastricht Treaty, those perverse factors that have increased the value of our currency above what is necessary and artificially penalised the competitiveness of our industries and our services," he added.



Berlusconi has often railed against the stability pact, but the Il Foglio comments were one of his most virulent attacks to date.



Working on two fronts simultaneously, the Italian prime minister is determined to relax EU restraints on state spending and also introduce his long-promised tax cuts.



Berlusconi's supporters believe the twin move will kick-start the economy and win back voters disillusioned by three years of sluggish growth.



But some of his coalition allies are reluctant to back the tax plan, worried proposed cuts of some 6 billion euros ($7.82 billion) will push Italy's budget deficit beyond EU limits, or else will involve unpopular cuts to state spending.



Berlusconi insisted in his Il Foglio column that he had found the necessary cover for the fiscal reform and said he would not accept any more delays.



"If taxes are reduced in a consistent and visible fashion, then our journey continues. If not, then the Italians should be called on again so that they can decide their own destiny," he said, making clear he would call elections if necessary.



The prime minister warned last week that without an accord, he would head into early elections only alongside those allies who had backed his tax plan.



Such a split would severely damage those parties that were left outside Berlusconi's umbrella grouping.



The main obstacle to Berlusconi's tax drive is the centrist UDC party, which would prefer to see any spare cash spent on investments and eduction rather than tax cuts.

[russky joe]

"Most Europeans really just aren't familar enough with free market economics - or economics in general, other than in the unworkable "dream world" theories"



Oh, jeeez, just when we got an intelligent thing going here and I was learning things frickin' Hi-Hoe Silver turns up and drags us back into the sandpit.



I ain't no professor, but even I know that the frickin' Europeans frickin' invented frickin' free market economics.



Here, kemosabe, take a peek at Adam Smith, one of the European guys who invented free market economics when our stupid ancestors were chasing around after witches. www.adamsmith.org



Now just disconnect yourself and go back to sleep, will ya, while we get this straightened out!?



Frickin' ada.

[bitwhys]

ah yes.



Adam Smith



the Wealth of Nations



for free trade

against mercantilism



the difference? simple. in his scheme of things everyone gets a pair of shoes before you start exporting them. guess what's not happening.



btw, a dwindling dollar will be no big deal until you experience a trade deficit, then it just accelerates losses. (pay more for less, get less for more)



oh wait



the US already HAS a trade deficit.

[Galmin]

I wish you'd stop being so paranoid about the Euro, Ron. It's a currency just like any else.

Quote:

---

Most Europeans really just aren't familar enough with free market economics - or economics in general, other than in the unworkable "dream world" theories (as termed by Czech President Vaclav Klaus) - to understand why a weak dollar is good for America.

---

How is it that you try to turn a discussion about GWB's "strong dollar policy" (hahahaha) into something about the Euro haphazardly backed up by something Silvio Berlusconi said (I am surprised he has time for stuff like this inbetween court hearings in his bribery trial)? No aswer needed (not that you ever give any. It's "hit and run"-discussion with you).

Edited by: Galmin  at: 11/27/04 13:07