http://www.marketwatch.com/news/sto...x?guid={1EBCD78C-CB1B-444B-A821-987EF69A841B} So now we get the acknowledgment that the weak dollar has caused inflation, no duh, you just had to watch gold the last 7 years), and the inflation is so bad it is hurting the US economy. To fix it, you could raise rates (short term impact - but no, we can't do that because the economy is so weak), or we could deal with the budget deficit (but wait, we'd probably have to raise taxes since we are not likely to reduce spending). So, ok, we'll just rattle the saber and HOPE the dollar goes up. This is not a long term fix, they'll watch his feet, not his lips. The big money boys are not that gullible. This is not a good place for the US economy to be in. I was thinking about going to Banff, Canada in Sept., now I'm thinking about Glacier Nat. Park in Montana instead, due to dollar weakness.
Link Despite inflation, I am not sure we'll see a wage spiral. Too much competition from Brazil, Russia, India, China (now referred to as the "BRIC"). If we don't get enough wage inflation to go along with price increases, say goodbye to your standard of living, it's going DOWN. It's looking ugly out there, as has been discussed in this thread. Pathetic performance by this administration. Handed a balanced budget, strong dollar, reasonable economy dealing with the dot.com bust and Enron/Worldcom/Adelphia busts. Bush blew it the last 8 years.
While I do think Bush blew it the last 8 years, I won't say Clinton didn't play a part and that this hasn't been in the works for a long time. US policy hasn't been sound in a long time, and I don't think it is only monetary policy that is the culprit.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/23/bcnalrosa123.xml You see this everywhere today. The USD IS THE PROBLEM. Too much DEBT. Consumers bought too much on credit and now can't service it, the govt. cut taxes and increased spending so the budget deficit got out of control under the liberal spending republicans, and we gave tax incentives to corporate america to offshore our jobs, hurting our ability to earn the money necessary to service our debt. It's a prescription for disaster, which we have on our hands. Hang on, the ride is getting bumpy. Of course the Ruskies are our enemies, and we have invested greatly in our army. It makes no sense to attack us militarily. But, we have neglected sound economic policies to finance the huge military buildup, and we are vulnerable. So, they attack our currency. The world is changing. All out war against standing armies in the field is sheer lunacy (my personal belief). The efficiency of our killing technology is just too good. I think that old style of warfare is obsolete. The only warfare that is feasible is economic and guerilla.
I wonder if we have been a nation of grasshoppers rather than a nation of ants. It seems like summer is winding to a close and winter is coming.
Economic warfare is fair. We defeated the Soviet Union with it. The Russians won't hesitate to return the favor if we let them get the leverage. The portion of the national debt amassed by this administration is unprecedented and shameful.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/26/ccchina126.xml Why doesn't the US press cover international economics more? I think they just want to keep everyone in the US in the dark, or maybe they just think we don't care (in the majority of cases, probably true). In currency exchange, you always have to look at both sides of the deal. Your currency can be strengthening or weakening, and the other side can be strengthening or weakening, at the same time. Its not always easy to figure out. Recent dollar strength is probably more a reflection that the global slowdown is perceived to be accelerating overseas faster currently, while the US slowdown has been going on for over a year. Relatively, their currency is becoming less attractive at a faster rate than the US. Its not something good we have done, their just getting bad faster than us right now. Plus a little Chinese intervention, on the QT.
http://bi-me.com/main.php?id=27014&t=1&c=35&cg=4&mset=1011 US potentially losing influence due to the weak dollar, and weak banking system. People not trusting us to manage our financial affairs properly. This is not saying Sarkozy will be successful immediately, but those with the real financial strength will win in the end, that truth cannot be ignored.
