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Phydeaux -> RE: Do Racism, Conservatism, and Low I.Q. Go Hand in Hand? (1/9/2016 10:52:42 AM)
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ORIGINAL: MrRodgers
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ORIGINAL: Phydeaux
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ORIGINAL: MariaB
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ORIGINAL: MrRodgers
Actually in that I am not young anymore, I was thinking of Switzerland. The Swiss franc has been the best post WWII currency vs the US dollar of all currencies and enjoys a steady forex volume. (arbitrage) Plus the Swiss may do all they can to support the western banking cartel but do not rely upon the US dollar for foreign exchange reserves.
You are correct about the Chinese and their addiction to binding the yuan to the US dollar but the Russians are already fucked, only living off their oil. I think it still takes a 'dollar' to buy a 'pound' of rubles, as they saying goes. Maybe it's 1/2 pound now.
The Euro is finally reflecting a long delayed volatility in its reliance also upon an ever increasing debt-driven consumerism and their elite's continued desire for a free lunch, not being able to tax only the people to then hand out so much...to the people resulting in yet more austerity or more debt.
Some friends in that vain, years ago, formed an off-shore private investment trust in Swiss francs and lend in francs but only with a big bank guarantee, still saving borrowers at least 1 point.
Sometimes more, like with a guarantee from the Canadian Royal Bank. Example: I almost got $22 million (in Swiss francs) to re-finance a bldg in no. Va. but the tenant was Logicon (Northrop-Grumman) which does the software for the B1 and B2 bombers and the govt. wouldn't even allow a foreign mortgage holder, let alone buyer.
Bitches. That was going to be a real nice ticket. I mean what the fuck were the Swiss and the Canadians going to do and with such a AAA credit tenant ?
Europe and especially the U.K. have erred in terms of believing that a race for austerity in the short term, is the way to produce real growth. They’re wrong, it’s the quickest route to a recession. I’m not saying we shouldn’t attempt to pay back on the deficit, in fact we have no choice in that but if you suffocate a nation to get there, you strangle your economy too.
Remember 2010-11 and the credit crunch? A lot of people who had bought into the Swiss franc found themselves not only re-paying 50% more but found themselves with larger loans/mortgages. Don't get me wrong, I think FX trading is a great idea but trading in currency is a high risk game. An alternative currency in precious metal is more of a safe haven, especially for things like pension pots and long term investments. On the 16th December gold hit a fantastic low and that's when I bought our family Xmas presents! They didn't get a gold necklace but they did get gold bonds they can almost certainly watch grow.
We're already in a deflationary spiral. Every major industrialized nation has devalued currency - the Chinese stock mocket crash is due to people understanding the yuan is going to depreciate further and pulling their dollars out into perceived safe havens. Most people don't realize it - but about half of recent treasury sales have been to the fed.
Yep. We're selling bonds to ourselves. More or less this is continuous quantitave easing - essentially yet one more swapping deck chairs on the titanic.
We HAVE to stop the insane borrowing - to the tune of 400 billion a year. If we stopped now - we might be able to pay off the debt..
in 160 years.
You are correct and incorrect. The few nations with larger industrialized economies have seen their currencies devalued but as always, only with respect to (compared to) a very few, small, non-industrialized nation's currency and as I have been writing, the Swiss franc immediately comes to mind. This is first because the various currencies relative value to each other is the only way to assess such a financial phenomenon. Otherwise all currencies are judged first by how many US dollars or Euros they will buy.
Your terminology using 'deflationary' spiral is incorrect as we do not see prices falling. The use of that term with respect to the Euro most recently reflects the fall in the value of its purchasing power outside the EU, again it falling in value to the currencies of their trading partners, including the US. Otherwise the falling value of any given currency with respect to its domestic purchasing power...would be inflationary.
The slow economic activity in Europe and to a large extent in the US although not as nearly as much, simply reflects the ongoing 40 year economic regime and the newly established and future model, of buyers (consumers) being essentially broke. Buying and investment then becomes 90% derived by new private debt. That also reflects the importance of interest rates because most western economies are now cost-of-capital, sensitive. High interest rates, recession, low...some economic activity.
That's also why the fed now owns $2 trillion in US debt, also why since WWII the US alone has accumulated depending on who one reads, $60-$70 trillion in public and private debt. (also why unfunded liabilities are also many 10's of trillion$ and going up $7 million/MINUTE) The effort is and will forever be, keeping rates low, borrowing high for economic activity and only because few people and fewer and fewer people, will have any money at all 'to spend'...otherwise.
interesting debate. You are correct and incorrect.
A. I would submit to you that a lot of prices actually are declining, between technology, energy, & commodity prices.
B. Additionally, the world has an overcapacity issue, in that the global supply of steel, concrete, and many other products is over supplied, which also has deflationary pressure. The profit margin on steel is less than a quarter a tonne in some markets.
C. I agree, that with fiat currencies this really is a confidence game.
D. Depreciation of currency creates a huge issue with overhanging externally denominated foreign debts.
E. Europe with its historically high ratio of debts to GDP is particularly at risk - the US with its 400 billion dollar deficits under obama is rapidly driving into insanity.
F. There is no question that in the US - there is too much money in too few hands. I would advise breaking up mega corporations urgently. The longer this is put off the more explosive the correction when it occurs.
I use the term deflationary spiral outside the usual context; agreed. But it nonetheless reflects what I think will occur, that we are going to see race toward some indeterminate bottom. China, and most of its satellites are devaluing; Japan is; Europe is; Russia is, the US has - and is in a sneaky fashion.
The keynesians are reaching the limit of what deficit spending can accomplish; the fed has has the foot slammed on the accelerator for 9 years - Fed had a paper saying that in the beginning $1 of deficit spending had $2.2 in effect because of ripple through. That number is now less than 20 cents. Each dollar of stimulus has neglible effect - but to stop would be to invite recession. And so the deficits continue and the debts mounts.
With no alteration - I expect decades of misery paying off debts, once we get to the point that people will no longer accept each other's debt. We are much closer to that position than people realize. With Japan and China selling US treasuries - there is no significant market for US debt. No one is buying US treasuries (ie., more than 1/2 treasuries are bought by the Fed - and 1/4 by us banks). So the feds are in effect playing a confidence game - printing money, to buy us teasuries. Literally the whole word economy is riding on the back of the feds printing money.
Yep. Its an intersting world.
China is interesting - the juan depreciating because earnings are decreasing and china needs to prop up its capacity. This causes capital to fly - depreciating the juan. So the chinese sell dollars in an attempt to slow the fall. But really what china needs to do is put its 3 trillion in reserves into play - its money sitting gaining 2% when it could be in the hands of china's people enhancing/growing the economy.
China / India expansion is coming at the cost of over capacity in the world - so the developed economies are losing living standard, as they cannot compete on price.
The US appears to be a beacon of stability - it needs to capitalize on that while it can. Bring in as much money as it can via citizenship. Let millionaires bring their money - because we need to spread the per capita debt.
What is most amazing is that protectionism really hasn't reared its head.
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