Econ thinkers! I'm confused!

[cska80]

Can someone explain how the dollar is rising even after all of these bail outs and rate cuts? How is the dollar rising when we have 3 major banks free falling today? How is the dollar rising when the government just took over most of our mortgage market?

[xtravar]

Maybe because people think the market's safer in the government's hands. Ironic, isn't it?

[Paul.Bearer.of.Injustice]

look up foreign exchange intervention. It is within the authority of the Federal Reserve in extreme financial conditions.

Once the initial "boost" is provided by the central banks trading in their Euros and Yen for USD, the automated non-thinking traders(hedge funds) jump on the uptick, then everyone else covers their dollar shorts.

[Indy4Chng]

Unfortunately we are comparing our $ to other countries with poor fiscal policy (at least the Euro)

The bottom line, is China could bankrupt us at anytime they wanted to... you gotta love our "conservative" president and what he has done to us. :eek:

[Brian4Liberty]

It's all relative. People moving from one fiat currency to another. It doesn't mean that any of them are actually "rising".

[powerofreason]

Its all short term. They know (the Fed) that if they keep this up they will cause a dollar collapse. The crash is inevitable I think, too. Its really just a matter of when. We're in for bad times, one way or another. Once foreign banks start dumping dollars, its all over. Enjoy toasting your benjamins over a woodstove, cuz all they'll be good for is keeping warm.

[freelance]

The vehicle has a bunch of different names: Exchange Stabilization Fund, The Working Group on Financial Markets, or, if you prefer, the Plunge Protection Team. Their job is market manipulation. Look it up if you think it's nothing more than a wild conspiracy theory. It's not. It's a plain, in your face, "legal" conspiracy.

[RoyalShock]

Can someone explain how the dollar is rising even after all of these bail outs and rate cuts? How is the dollar rising when we have 3 major banks free falling today? How is the dollar rising when the government just took over most of our mortgage market?

I'm no economist, but what I've read is that the economies in many foreign nations are on a downturn. Investors who had sold their dollar holdings and bought the currencies of those nations are now selling them back in favor of US dollars.

I hope I paraphrased it correctly, but that's how I understand it.

[Truth Warrior]

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
Henry Ford

[PredatorOC]

Can someone explain how the dollar is rising even after all of these bail outs and rate cuts? How is the dollar rising when we have 3 major banks free falling today? How is the dollar rising when the government just took over most of our mortgage market?

The main method for the government to inflate the money supply is through banks. So if people become wary of banks and taking loans, the government's ability to inflate is decreased. There is actually a debate going on between Austrian economists whether the end result of all this will be inflation or deflation.

[idiom]

Europe and China are turfing out thier stakes in Fannie and Freddie and buying Treasuries.

Dollar goes up for a bit and Fannie get more and more toasted.

Eventually US Debt goes up by $5 Trill as Fannie gets funded entirely by treasuries.

Then Dollar goes down.


Also everybody else is in recession too. Dollar strength is a measure of who is falling the fastest.

[libertea]

This is meaningless. It is relative to many external factors. The dollar has lost 96% of it's value in 100 years. Do you want to go back to 1900 and taking a dump in an outhouse? If this meant anything, instead of having an outhouse per family, we would now have 1 outhouse for every 25 families to share(this is an analogy, I am not sure of the actual outhouse usage in 1900).

This is something that I think people talk about just for the purpose of confusing others.

[Chiznaddy]

because our markets have been built on a system of emotion and perception, not reality.

so long as those that control the system can make people think the dollar should be getting stronger, it will get stronger. This is why bubbles occur. If the market were rational (a free market being the only rational market), big bubbles would not occur.

[Rhys]

This is meaningless. It is relative to many external factors. The dollar has lost 96% of it's value in 100 years. Do you want to go back to 1900 and taking a dump in an outhouse? If this meant anything, instead of having an outhouse per family, we would now have 1 outhouse for every 25 families to share(this is an analogy, I am not sure of the actual outhouse usage in 1900).

This is something that I think people talk about just for the purpose of confusing others.

you're plain wrong.

The dollar is suffering from leverage. You can invest 100 times your amount of money. So if I were to purchase $100,000 dollars worth of EUROS, I only had to spend $1000 to do so. Understand this... to purchase a million dollars worth of EUR, I only had to spend ten thousand dollars.

When you have this kind of leverage, hedge funds and central banks and investors and traders can swing the market in huge directions.

If you look at the decline of the dollar over the last few years, what you would see the last couple months is a pullback to a Fibonacci number in the larger time frames.

What this tells me, traders are moving the market in the range of noise. Like... if you have a river flowing in a certain direction, sometimes the river will still bend and turn but it's also still going somewhere.

Also the market moves like this... up down up down. It never just goes to a single value and stays there forever or until it's next move.

Anyway... at a certain point this phony system will break and the dollar will fall off a cliff. It may take other fiat moneys with it, we can only hope, if their central banks follow us like lemmings.

What this means to what you said is, it does matter.... all the consumption is based on credit and leverage and it will end. Just because it hasn't yet does not mean that it will not. We all have outhouse, not because we produce enough in the economy and have a good currency, but because we've borrowed the money to buy it from someone who also didn't have the money. They got the money by using the full force and might of the American Empire's Military. When the game ends, it will matter very fast and it will be ugly and the 'rule by guns' will necessarily see blood shed. Because they defend the dollar with guns, we will have to get shot at if we don't keep using their money... which we wont keep using their money because it wont be worth anything.

[hotbrownsauce]

The dollar always rises like that when this happens. But its very short term and doesn't mean much.

[BarryDonegan]

IMO this has more to do with speculation and the fact that all of these million hurricanes are not as strong as the news makes them out to be.

when the hurricanes wind up being weaker, the oil production that was expected to stop doesn't stop and the dollar rallies.

[idiom]

Anyone who had stock in F&F or financials or other stuff, is dumping them and buying Treasury Bonds.

China and Europe and making big moves in this way. So the Dollar goes up.

Except Treasury Bonds are pretty much Finacial stocks and mortgages now which means treasuries will soon become the plauge bearers.

[Rhys]

Anyone who had stock in F&F or financials or other stuff, is dumping them and buying Treasury Bonds.

China and Europe and making big moves in this way. So the Dollar goes up.

Except Treasury Bonds are pretty much Finacial stocks and mortgages now which means treasuries will soon become the plauge bearers.

I remember hearing Peter Schiff say treasury bonds are "the last bubble".

[libertea]

you're plain wrong.

The dollar is suffering from leverage. You can invest 100 times your amount of money. So if I were to purchase $100,000 dollars worth of EUROS, I only had to spend $1000 to do so. Understand this... to purchase a million dollars worth of EUR, I only had to spend ten thousand dollars.

When you have this kind of leverage, hedge funds and central banks and investors and traders can swing the market in huge directions.

If you look at the decline of the dollar over the last few years, what you would see the last couple months is a pullback to a Fibonacci number in the larger time frames.

What this tells me, traders are moving the market in the range of noise. Like... if you have a river flowing in a certain direction, sometimes the river will still bend and turn but it's also still going somewhere.

Also the market moves like this... up down up down. It never just goes to a single value and stays there forever or until it's next move.

Anyway... at a certain point this phony system will break and the dollar will fall off a cliff. It may take other fiat moneys with it, we can only hope, if their central banks follow us like lemmings.

What this means to what you said is, it does matter.... all the consumption is based on credit and leverage and it will end. Just because it hasn't yet does not mean that it will not. We all have outhouse, not because we produce enough in the economy and have a good currency, but because we've borrowed the money to buy it from someone who also didn't have the money. They got the money by using the full force and might of the American Empire's Military. When the game ends, it will matter very fast and it will be ugly and the 'rule by guns' will necessarily see blood shed. Because they defend the dollar with guns, we will have to get shot at if we don't keep using their money... which we wont keep using their money because it wont be worth anything.

I agree with you. As I stated, the so called "value" or "purchasing power" is relative to many factors. You elaborated on this. The "value" means nothing. The factors determining the "value" are what matter.

The biggest factor in an economy is technology. Unfortunately, this has been used for aggression. Naval technology allowed the British to dominate. Military technology allows the US to dominate. This does not have to be the course for humanity. Buckminster Fuller wrote extensively on this. Regardless of the value of the dollar, we now have sanitation and production technology that allows us to have toilets in a heated room instead of freezing our butts in the outhouse. All with 4% of the "purchasing power".

Does this mean the outlook is rosy? No. Is there hope? Yes.

[Rhys]

I agree with you. As I stated, the so called "value" or "purchasing power" is relative to many factors. You elaborated on this. The "value" means nothing. The factors determining the "value" are what matter.

The biggest factor in an economy is technology. Unfortunately, this has been used for aggression. Naval technology allowed the British to dominate. Military technology allows the US to dominate. This does not have to be the course for humanity. Buckminster Fuller wrote extensively on this. Regardless of the value of the dollar, we now have sanitation and production technology that allows us to have toilets in a heated room instead of freezing our butts in the outhouse. All with 4% of the "purchasing power".

Does this mean the outlook is rosy? No. Is there hope? Yes.

you're ignoring the billions of people who have nothing so that we in the G8 could have technology.

I say, if those billions of people could have participated in the market, we'd have more wealth and technology. You're notion holds us back because it only allows for some ships to rise with tide. A real market economy rises all ships at tide.

[misericordia]

The collusion of countries central banks heavily tied to the dollar is keeping it up until they've had time to secure their profits, then........

buy rice and beans and seeds and warm clothes, you're going to need them.

[gaazn]

Oh, this is an easy one. It's supply and demand of money. The credit crunch has taken a lot of supply of dollars out, making the value go up. That's why the prices of everything is going down, especially non-necessities. The Great Depression that is on our doorsteps will make the people more willing to accept Fascism.

[idiom]

Does this mean the outlook is rosy? No. Is there hope? Yes.

Watch this (http://www.charlierose.com/shows/2008/09/08/1/a-discussion-about-the-acquisition-of-fanny-mae-and-freddie-mac) before telling everyone there is hope :)

This is why RP was talking about a depression Early *last* year.

[libertea]

you're ignoring the billions of people who have nothing so that we in the G8 could have technology.

I say, if those billions of people could have participated in the market, we'd have more wealth and technology. You're notion holds us back because it only allows for some ships to rise with tide. A real market economy rises all ships at tide.

I implied this? I agree with you 100% and I don't no where you are coming from with "Your notion". I am not ignoring anybody, history has. Read what Fuller says. He says(paraphrasing), with the technology of 1970, by shifting our focus in our use and development of technology, THE ENTIRE WORLD POPULATION could live at billionaire levels using 1% of our resources. That was back when a billion was a billion.

[Rhys]

I implied this? I agree with you 100% and I don't no where you are coming from with "Your notion". I am not ignoring anybody, history has. Read what Fuller says. He says(paraphrasing), with the technology of 1970, by shifting our focus in our use and development of technology, THE ENTIRE WORLD POPULATION could live at billionaire levels using 1% of our resources. That was back when a billion was a billion.

you mean, like via socialism? who is "our"? sure aint me. I don't have the technology to make everyone live like billionaires. We'd have to form a collective and decide who gets what and who has to do what.

The whole notion of Adam Smith's invisible hand is that, everyone working individually for their own best interest will create a better situation for everyone.

That means, once you've formed your collective.... humanity is done progressing. No one is working for their best interest so no innovation occurs. Competition is the result of innovation and vice versa. If you remove one, you remove the other as well.

ps... yes, you did imply that the billions should starve. We wouldn't all have your outhouses unless we took them from the starving people, in our current system. You said the current system doesn't hurt us... but you ignored who it does hurt.

[RonPaulGeorge&Ringo]

The Chinese agreed to buy up a bunch of dollars in exchange for Bush letting them cheat to victory at the Olympics.

[libertea]

you mean, like via socialism? who is "our"? sure aint me. I don't have the technology to make everyone live like billionaires. We'd have to form a collective and decide who gets what and who has to do what.

The whole notion of Adam Smith's invisible hand is that, everyone working individually for their own best interest will create a better situation for everyone.

That means, once you've formed your collective.... humanity is done progressing. No one is working for their best interest so no innovation occurs. Competition is the result of innovation and vice versa. If you remove one, you remove the other as well.

ps... yes, you did imply that the billions should starve. We wouldn't all have your outhouses unless we took them from the starving people, in our current system. You said the current system doesn't hurt us... but you ignored who it does hurt.

You obviously never read Fuller. You read way to much into things. Are you my wife? She gives different meanings to most things I say too.

[Rhys]

You obviously never read Fuller. You read way to much into things. Are you my wife? She gives different meanings to most things I say too.

I don't want to get into a debate about Fuller. The point is this, we don't need fiat money to do better in life. Fiat money both takes from the people and gives to the bankers, and slows down growth and prosperity. Without the system that you see no problem with, there would be no problem to solve. There would be no need for revolution.

I also forgot to mention that, we've substituted purchasing power for credit cards. However, the credit cards were "promise to have purchasing power later, at interest" which we wont and never will because the dollar will be destroyed. So yes, the devaluation of currency is extremely important. We've substituted real value for no value and people have gone along with it. When they demand the "bills of credit" to be redeemed for real value, that's when you're going to see why a 4 cent dollar nearly destroys your family and nation in the same way it's already destroyed so many.

People are not poor because we don't allocate resources well. Well, yes they are.... but we don't allocate resources well BECAUSE we have a socialist system which takes an inflation tax AND an income tax at the same time to pay the interest on the inflation tax. It's really messed up in the head, and crazy to think it's not bad.

[freelance]

I remember hearing Peter Schiff say treasury bonds are "the last bubble".

For a "fun" explanation of how this works, there's a great novel based on fact, called Full Faith and Credit. It's about a two-hour read, but you'll get a ring-side seat at watching the horror of what's going to happen when the bond market goes south for the last time. And you'll just LOVE how the main character gets through the ups and downs of the precious metals market.

REQUIRED READING!!!

http://www.amazon.com/Full-Faith-Credit-Financial-Collapse/dp/1886768498/ref=sr_1_1?ie=UTF8&s=books&qid=1221177072&sr=1-1

[libertea]

Without the system that you see no problem with, there would be no problem to solve. There would be no need for revolution.



I see no problem with? I see a lot of problem with the current system Baby(now I'm sure it's my wife). When did I say this honey?

Tony Robbins says the quality of the communication is the response you get. I have proven myself a lousy communicator based on the responses from Rhys. I have never had someone argue with me so much when I agree with them 100% on everything they say, except their interpretations of what I say.

[Rhys]

I see no problem with? I see a lot of problem with the current system Baby(now I'm sure it's my wife). When did I say this honey?

Tony Robbins says the quality of the communication is the response you get. I have proven myself a lousy communicator based on the responses from Rhys. I have never had someone argue with me so much when I agree with them 100% on everything they say, except their interpretations of what I say.

I don't get how you say the devaluation isn't a problem i guess. that's like the crux of the Fed.

[libertea]

I don't get how you say the devaluation isn't a problem i guess. that's like the crux of the Fed.

I did not say that it isn't a problem. Excessive taxation is a problem, especially when it is hidden. I said the value of the dollar was a meaningless statistic because it is relative. Comparing a 1900 dollar to a 2008 dollar, or the dollar with the Euro, is not the proverbial apples with apples comparison.

ps, I agree with Adam Smith, but to me it is not so mysterious. I prefer Zig Ziglar's more optimistic phrasing "You can get anything you want, as long as you help enough other people get what they want". The "anything you want" being the acting in your own self interest. The "what they want" being the better situation for everyone.

[Zolah]

Can someone explain how the dollar is rising even after all of these bail outs and rate cuts? How is the dollar rising when we have 3 major banks free falling today? How is the dollar rising when the government just took over most of our mortgage market?

Europe has been plunged into recession (prematurely) to save the greenback for a few more months :) Well not all of Europe, but UK has 0% growth I know, and France and Spain are expected by all to be in recession (have to wait for 2 quarters of negative growth for technical recession, as if technicalities matter when food costs 200% more than it did 5 years ago..)

[libertea]

oops, double posted.