quote:

ORIGINAL: MrRodgers

This is suppsed to be a real big deal and possibly cause panic in the financial world and maybe your world too.

I have several questions. First, SDR's are Special Development Rights.

1) Just what is a 'Special Development Right ?

2) How does the market have any idea of what they are getting ?

3) The world has had alternative currencies for decades, still...the US dollar is king.

4) If the world is supposed to be so hungry for an alternative so-called...reserve currency, why didn't [it] flock to the EURO ?

5) IF the first question is, how many $$ is it worth, then these SDR's are in trouble.

I personally don't see any concerns for the US dollar. The IMF doesn't have the power, wealth or the world's confidence in any 'new' currency.

Thus, even after this important announcement, the dollar will still remain king. Every time, the world has had any economic turmoil, central banks and investors flock to the US dollar.

Furthermore, yes America is the world's largest borrow but that borrowing has come down substantially and Billion$ still sells out in minutes and at historically very low interest rates.

What do you all of you economic experts think ? Are the International bankers up to something ? Can they succeed ? How will you know they did succeed ? Is the US dollar in trouble ?

HERE

All of the links I read...read the same. It's seems to be all about China and the Yuan. Another reason I say the dollar is safe. China has for decades, pegged the Yuan to the dollar.

If there is any belief these SDR's are the backed by the yuan, then China could just shoot themselves in the financial foot. I.e., having pegged the yuan to the dollar, means there will be no spread and without a spread, it's no sale.

How is it that the world should thus be expected to sell dollars for SDR'a or yuans ? I wouldn't advise any nation (sovereign fund) to do so.

quote:

ORIGINAL: tj444

quote:

ORIGINAL: MrRodgers

This is suppsed to be a real big deal and possibly cause panic in the financial world and maybe your world too.

I have several questions. First, SDR's are Special Development Rights.

1) Just what is a 'Special Development Right ?

2) How does the market have any idea of what they are getting ?

3) The world has had alternative currencies for decades, still...the US dollar is king.

4) If the world is supposed to be so hungry for an alternative so-called...reserve currency, why didn't [it] flock to the EURO ?

5) IF the first question is, how many $$ is it worth, then these SDR's are in trouble.

I personally don't see any concerns for the US dollar. The IMF doesn't have the power, wealth or the world's confidence in any 'new' currency.

Thus, even after this important announcement, the dollar will still remain king. Every time, the world has had any economic turmoil, central banks and investors flock to the US dollar.

Furthermore, yes America is the world's largest borrow but that borrowing has come down substantially and Billion$ still sells out in minutes and at historically very low interest rates.

What do you all of you economic experts think ? Are the International bankers up to something ? Can they succeed ? How will you know they did succeed ? Is the US dollar in trouble ?

HERE

All of the links I read...read the same. It's seems to be all about China and the Yuan. Another reason I say the dollar is safe. China has for decades, pegged the Yuan to the dollar.

If there is any belief these SDR's are the backed by the yuan, then China could just shoot themselves in the financial foot. I.e., having pegged the yuan to the dollar, means there will be no spread and without a spread, it's no sale.

How is it that the world should thus be expected to sell dollars for SDR'a or yuans ? I wouldn't advise any nation (sovereign fund) to do so.

I am all for other reserve currencies, the US govt is a fuck-up (cuz its still controlled by greedy wall street) and no matter if its a D or an R as President, it will continue to be a fuck-up for a long time. What I am especially opposed to is that the US uses the US dollar & banking system to dictate to and blackmail countries into doing what it wants & imo that is very wrong imo. As long as the US govt can do that, it will continue to strangle other countries of this world..

I dont know if the SDRs are going to be accepted or not.. It doesnt really matter to me either way, if it isnt accepted then the Euro and Yuan will still be competition for US dollars.. currencies will fluctuate against each other and will tend to go in trends.. if you are an investor or businessperson, you go with the trend (of one or more currencies) & hedge your assets or business, imo.. Imo, over time (meaning a decade or two or maybe longer), the US dollar will lose its position... the other developing countries will continue to grow as the US stagnates and declines.. Come on, almost 50% of America doesnt pay federal tax, this country will continue to have more and more poor people that cant buy anything anymore, the middle class will continue to dwindle & the coming Social security and medicare money pit will be a problem in the future, while China, India and other countries will have a growing middle class & growing economies.. as the US market becomes less relevant, so does its dollar.. That will take time, it wont happen overnight.. Imo, worrying about SDRs is the least of the US's problems right now..

That's jmo..

quote:

ORIGINAL: MrRodgers
For example, your statement that 50% of the US workforce don't pat taxes is simply not true. Not only does every pay check have that they ALL pay fed. payroll taxes but also medicare taxes. In some cases the payroll tax is a higher withholding than FICA. There is also Billion$ in excise and gas taxes paid by everybody purchasing such taxed products.
The following illustrates how the extreme tax reduction due to recession has significantly exacerbated who does pay taxes and do not and reflect typical taxes paid when the economy is healthier.
"These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes -- especially the payroll tax -- that many of these households pay. As a result, these figures greatly overstate the share of households that do not pay federal taxes. Tax Policy Center data show that only about 17 percent of households did not pay any federal income tax or payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year. In 2007, a more typical year, the figure was 14 percent. This percentage would be even lower if it reflected other federal taxes that households pay, including excise taxes on gasoline and other items."
So you see, 50% is hyperbole.
HERE

quote:

Well I agree on your general opinion here but the dollar will be the world's reserve currency as long as those that insist on holding dollar reserve believe in the American workforce.
It is the confidence in the American economy as reflected in a similar confidence in the American workforce that has in fact made the dollar the widest held currency because it remains a store of wealth. As long as it does, the dollar will remain king.

• A Conservative interpretation of the US Constitution
  
• Personal Responsibility
  
• Help for the truly needy
  
• Limited Government
  
• Consumption Tax (non-profit charities and food exempt)
  

quote:

ORIGINAL: MrRodgers

Well I agree on your general opinion here but the dollar will be the world's reserve currency as long as those that insist on holding dollar reserve believe in the American workforce.

For example, your statement that 50% of the US workforce don't pat taxes is simply not true. Not only does every pay check have that they ALL pay fed. payroll taxes but also medicare taxes. In some cases the payroll tax is a higher withholding than FICA. There is also Billion$ in excise and gas taxes paid by everybody purchasing such taxed products.

The following illustrates how the extreme tax reduction due to recession has significantly exacerbated who does pay taxes and do not and reflect typical taxes paid when the economy is healthier.

"These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes -- especially the payroll tax -- that many of these households pay. As a result, these figures greatly overstate the share of households that do not pay federal taxes. Tax Policy Center data show that only about 17 percent of households did not pay any federal income tax or payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year. In 2007, a more typical year, the figure was 14 percent. This percentage would be even lower if it reflected other federal taxes that households pay, including excise taxes on gasoline and other items."

So you see, 50% is hyperbole.

HERE

It is the confidence in the American economy as reflected in a similar confidence in the American workforce that has in fact made the dollar the widest held currency because it remains a store of wealth. As long as it does, the dollar will remain king.

quote:

ORIGINAL: DesideriScuri

I'm changing the order of your comments for clarity...

quote:

ORIGINAL: MrRodgers
For example, your statement that 50% of the US workforce don't pat taxes is simply not true. Not only does every pay check have that they ALL pay fed. payroll taxes but also medicare taxes. In some cases the payroll tax is a higher withholding than FICA. There is also Billion$ in excise and gas taxes paid by everybody purchasing such taxed products.
The following illustrates how the extreme tax reduction due to recession has significantly exacerbated who does pay taxes and do not and reflect typical taxes paid when the economy is healthier.
"These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes -- especially the payroll tax -- that many of these households pay. As a result, these figures greatly overstate the share of households that do not pay federal taxes. Tax Policy Center data show that only about 17 percent of households did not pay any federal income tax or payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year. In 2007, a more typical year, the figure was 14 percent. This percentage would be even lower if it reflected other federal taxes that households pay, including excise taxes on gasoline and other items."
So you see, 50% is hyperbole.
HERE

Yes, everyone pays taxes. Many do not pay income taxes, which is what I think TJ was talking about. Doesn't change the validity of your post.

quote:

Well I agree on your general opinion here but the dollar will be the world's reserve currency as long as those that insist on holding dollar reserve believe in the American workforce.
It is the confidence in the American economy as reflected in a similar confidence in the American workforce that has in fact made the dollar the widest held currency because it remains a store of wealth. As long as it does, the dollar will remain king.

I am still amazed that other countries find the dollar to be a store of wealth, considering the way we've inflated our money over the years. The value of $1 is so little compared to what it was a century ago.



It would seem that holding dollars isn't a very good way to preserve wealth. I still believe the Federal Reserve and monetary policy is a bigger risk to the dollar remaining the reserve currency, though.

China has brought up the idea that the yuan should replace the USD as the reserve currency. Does China not have enough credibility/trust and/or confidence in their economy/workforce?

quote:

ORIGINAL: MrRodgers

Has the fed precipitated inflation ? Yes. Much less than others that are not a store of wealth ? Yes. The only exception is the Swiss Franc.

In fact even after the devaluation and subsequent rise and fall of the Canadian dollar or the Euro, it has been the Swiss Franc exclusively that has maintained a store of wealth like the dollar, since WWII

quote:

ORIGINAL: tj444

quote:

ORIGINAL: MrRodgers

Has the fed precipitated inflation ? Yes. Much less than others that are not a store of wealth ? Yes. The only exception is the Swiss Franc.

In fact even after the devaluation and subsequent rise and fall of the Canadian dollar or the Euro, it has been the Swiss Franc exclusively that has maintained a store of wealth like the dollar, since WWII

yes.. imo the swiss franc is a lot safer than the US dollar too.. with Cypress and Greece we have seen govts restrict peoples access to their own money and/or confiscate their money and who is to say when some future bad recession/depression hits the US that the govt wont do that or some form of that here too?

quote:

ORIGINAL: MrRodgers

quote:

ORIGINAL: tj444

quote:

ORIGINAL: MrRodgers

Has the fed precipitated inflation ? Yes. Much less than others that are not a store of wealth ? Yes. The only exception is the Swiss Franc.

In fact even after the devaluation and subsequent rise and fall of the Canadian dollar or the Euro, it has been the Swiss Franc exclusively that has maintained a store of wealth like the dollar, since WWII

yes.. imo the swiss franc is a lot safer than the US dollar too.. with Cypress and Greece we have seen govts restrict peoples access to their own money and/or confiscate their money and who is to say when some future bad recession/depression hits the US that the govt wont do that or some form of that here too?

Maybe that will be THE enemy of all time...US Scipt. Martial law can't be too far around that corner.

Still, while we all share many of the same concerns, it will be sometime before the dollar is dumped.

quote:

ORIGINAL: DesideriScuri

I'm changing the order of your comments for clarity...

quote:

ORIGINAL: MrRodgers
For example, your statement that 50% of the US workforce don't pat taxes is simply not true. Not only does every pay check have that they ALL pay fed. payroll taxes but also medicare taxes. In some cases the payroll tax is a higher withholding than FICA. There is also Billion$ in excise and gas taxes paid by everybody purchasing such taxed products.
The following illustrates how the extreme tax reduction due to recession has significantly exacerbated who does pay taxes and do not and reflect typical taxes paid when the economy is healthier.
"These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes -- especially the payroll tax -- that many of these households pay. As a result, these figures greatly overstate the share of households that do not pay federal taxes. Tax Policy Center data show that only about 17 percent of households did not pay any federal income tax or payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year. In 2007, a more typical year, the figure was 14 percent. This percentage would be even lower if it reflected other federal taxes that households pay, including excise taxes on gasoline and other items."
So you see, 50% is hyperbole.
HERE

Yes, everyone pays taxes. Many do not pay income taxes, which is what I think TJ was talking about. Doesn't change the validity of your post.

quote:

Well I agree on your general opinion here but the dollar will be the world's reserve currency as long as those that insist on holding dollar reserve believe in the American workforce.
It is the confidence in the American economy as reflected in a similar confidence in the American workforce that has in fact made the dollar the widest held currency because it remains a store of wealth. As long as it does, the dollar will remain king.

I am still amazed that other countries find the dollar to be a store of wealth, considering the way we've inflated our money over the years. The value of $1 is so little compared to what it was a century ago.



It would seem that holding dollars isn't a very good way to preserve wealth. I still believe the Federal Reserve and monetary policy is a bigger risk to the dollar remaining the reserve currency, though.

China has brought up the idea that the yuan should replace the USD as the reserve currency. Does China not have enough credibility/trust and/or confidence in their economy/workforce?

quote:

ORIGINAL: MrRodgers

This is suppsed to be a real big deal and possibly cause panic in the financial world and maybe your world too.

quote:

ORIGINAL: Real0ne

quote:

ORIGINAL: MrRodgers

This is suppsed to be a real big deal and possibly cause panic in the financial world and maybe your world too.

I dont see how, they are dumping precious metals which is accelerating pulling the prices back down. (deflation)

our top-o-the-food-chain pals can pay the bills with cheap dollars, after the public paid with expensive dollars