dollar is slated to start tanking tomorrow

[south ov da border]

By the end of next week we're screwed. That's what I've heard. We'll have to wait and see...

[russtafa]

Free trade sucks

[russtafa]

You don't trade with some one who is not your friend and expect to get away with a very prompt payment unless you want your arse on a hook.I would have thought this was common sense but maybe not in Australia or America where these nerds[governments] are not that street wise and put their countries into a world of shit.But we are stupid enough to elect these dickheads

[robertlouis]

By the end of next week we're screwed. That's what I've heard. We'll have to wait and see...

I used to spend a lot of time in China - electronics manufacturing.

Even ten years ago it was so damn obvious. The Chinese linked the yuan to the dollar, and started buying up America's debt on the open markets at the same time as allowing the US to build up a massive trade deficit with China by flooding the US market with cheap goods.

They understand how capitalism works far better than the west because they take the long view. In the west it's all about the next day's profit. This outcome was so predictable and yet totally ignored. The Chinese can squeeze Uncle Sam's economic balls any time they like - and the US lowered itself willingly into the trap.

I'm not complacent - this will affect every western economy that's in deficit.

Err. That's all of them except Germany. Oh, I forgot - in Germany they still MAKE things, so they can still compete....

[hippifried]

Well that's the magic 8 ball's opinion. The ouija board says it won't happen for another 3 months. It doesn't matter, because because the anglo-translation of the Mayan calendar says we're all doomed next year anyway.

Is it time to panic yet?

[robertlouis]

Well that's the magic 8 ball's opinion. The ouija board says it won't happen for another 3 months. It doesn't matter, because because the anglo-translation of the Mayan calendar says we're all doomed next year anyway.

Is it time to panic yet?

The time to panic was 10-15 years ago when there were still options. But that's not how capitalism thinks - "Oh good, we can make a short-term killing by selling our manufacturing capacity down the swanee and our own factories can go to hell."

It's almost laughable. Come back, Karl Marx, we forgive you.

[Stavros]

RobertLouis I have to disagree on some points. I think there is a lack of confidence in the strategies that the US govt and the Federal Reserve are deploying to encourage economic growth while reducing the deficit -none of which is helped by the political game-playing in Congress which is designed more to undermine the President's credibility as the manager than it is to deal with the core issues.

By the mid-1908s the richest oil-blessed Arab states had like the Chinese today used their 'petro-dollars' to buy up bonds and other US-based equity- basically they had so much money they didn't know what to do with it, even accounting for the billions they spent on the modernisation of their infrastructure, buying expensive weapons systems, and funding the Mujahideen in Afghanistan (peanuts compared to the overall booty). There was thus a theory that if the 'fundamentalists' took over in Saudi Arabia, they would withdraw all the Arab money from American banks and bring America to its knees. It never happened. Why? Because the Arabs became as dependent on the receipts from their investment as the US benefited from the capital flow into its banks and investment houses. And if the fundies had taken over and had trashed the US, its biggest market, Saudi Arabia and the rest would have gone too, although there is a 'year zero' logic for some extremists who take the Pol Pot line on history: trash everything and start again.

Thus, the Chinese need the US consumer as much as the US economy needs China: and surely Marx would have pointed out that this is how the circulation of capital keeps the money flowing -be it investment, wages, profits or interest. The Chinese must actually be as nervous as the US should be, they stand to lose from a collapse in the American market, which is still the one market where everyone wants to play.

The key issue is therefore re-booting the US economy: reduce taxes and you reduce the federal government's revenue: the cost of spending on federal projects thus races ahead of its ability to pay. Raise taxes and you reduce consumer spending. Reduce taxes and you force the govt to rationalise its expenditure; raise taxes and you force people to opt for savings over expenditure. Its the age-old dilemma of basic economics in search or equilibrium.

Maybe someone should lock the doors of Congress until they can agree to agree and then work for the common good....

[hippifried]

I'm not nervous. I've been hearing doom & gloom for as long as I can remember, & I've been around for 60 years. The sky hasn't fallen yet, & the prognosticated date of the end times keeps getting pushed back.

Just my opinion, but I believe we need a total rethink of all this memetic economic theology that everybody likes to spout.

[south ov da border]

RobertLouis I have to disagree on some points. I think there is a lack of confidence in the strategies that the US govt and the Federal Reserve are deploying to encourage economic growth while reducing the deficit -none of which is helped by the political game-playing in Congress which is designed more to undermine the President's credibility as the manager than it is to deal with the core issues.

By the mid-1908s the richest oil-blessed Arab states had like the Chinese today used their 'petro-dollars' to buy up bonds and other US-based equity- basically they had so much money they didn't know what to do with it, even accounting for the billions they spent on the modernisation of their infrastructure, buying expensive weapons systems, and funding the Mujahideen in Afghanistan (peanuts compared to the overall booty). There was thus a theory that if the 'fundamentalists' took over in Saudi Arabia, they would withdraw all the Arab money from American banks and bring America to its knees. It never happened. Why? Because the Arabs became as dependent on the receipts from their investment as the US benefited from the capital flow into its banks and investment houses. And if the fundies had taken over and had trashed the US, its biggest market, Saudi Arabia and the rest would have gone too, although there is a 'year zero' logic for some extremists who take the Pol Pot line on history: trash everything and start again.

Thus, the Chinese need the US consumer as much as the US economy needs China: and surely Marx would have pointed out that this is how the circulation of capital keeps the money flowing -be it investment, wages, profits or interest. The Chinese must actually be as nervous as the US should be, they stand to lose from a collapse in the American market, which is still the one market where everyone wants to play.

The key issue is therefore re-booting the US economy: reduce taxes and you reduce the federal government's revenue: the cost of spending on federal projects thus races ahead of its ability to pay. Raise taxes and you reduce consumer spending. Reduce taxes and you force the govt to rationalise its expenditure; raise taxes and you force people to opt for savings over expenditure. Its the age-old dilemma of basic economics in search or equilibrium.

Maybe someone should lock the doors of Congress until they can agree to agree and then work for the common good....

Kissinger made deals with the Arabs to buy our debt because they were promised USA would not produce it's own oil wells...

[Brandi Boots]

wait, i thought we were talking chinese....not arabs.