Quote:
Originally Posted by pocketkangaroo
(Post 13164731)
I'm just speaking objectionally from what a lot of economic analysts have said. You are just saying whatever would make the US looks bad. It's not a difference in reality, just which one of us has an agenda behind us.
I think a 10 year fall is impossible to predict. There are a ton of variables in place and we have never seen these circumstances before in economic history. I'm not sure I agree with what Bernanke did by lowering interest rates as I felt some of those industries needed to pay a price for their mistakes and the most important factor is inflation. But he feels liquidity is more important, and that then he can raise interest rates and strengthen the dollar again. It'll be interesting to see if he's right, I think he is a bright man.
Nonetheless, the US Dollar was overpriced at the beginning of the decade. Imports kept expanding while exports were negative. We're seeing that finally correct itself as imports are down and exports are up. But the dollar will continue to fall for awhile and I foresee it at $1.50 to the Euro by the end of the year. A recession would suck for everyone on the board, but might be best for the long term. I'm not horribly opposed to it in my current situation. Still, it's just part of the game and all we can do is ride the ups and downs like everyone else.
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I am doing the same thing PK - looking at a series of financial data and trends over the years. This has nothing to do with "making the US look bad" - economically it is astoundingly bad and there is no point in glossing that under the carpet. If anything, I feel fucking angry that this situation was allowed to roll on in a credit card lala land with building debt and increasingly supported by other nations. Who pays the bill for this debt in the end??? Future generations - they will not be thanking anyone for their neglect. In addition, apart from US folks - this idiot behavior will cause ripples elsewhere and again, there will be no thanks for that.
Sure, a ten year fall in the dollar is kinda speculative and was a suggested possibility more based on a lack of ability to generate a sustainable economic future in the short term. This situation does not exist at this time and it takes a considerable volume of money and work over a series of years to begin to turn that around and it sure won't happen like magic in eg a five year term.
The US is in a situation not dissimiliar to most "western countries" in that there is a global economic shift away from these nations and rising economies elsewhere, particularly in Asia. That may be fine for western nations who currently operate balanced economies, where they have more chance of managing that change. If a western country is deep in debt and not productive to the level where it can not keep it's trade balance under control - it's going to be much harder to compete and be sustainable while economic global shifts are happening. These shifts are already happening now.
Totally agree on liquidity - even the largest corp can go bust without it. However, playing games with liquidity in a volatile and possibily unsustainable market can be like throwing good money into the air and watching it dribble down a drain. In effect, depending on whether there is control and where that liquidity is directed , - it's another unsustainable fantasy and short-lived. Unforunately that has been the past track record - not only sqaundering that actual injection, but shooting ahead and borrowing even more and using assets to support further borrowings. It's a totally unreal economic fantasy and no hope in hell of being sustainable.
Have you actually looked at the US balance sheet lately? Last time I took time out to read it all was 2005. This was fine on the summary first page - it showed a deficit, but nothing which would frighten anyone. However, there were extensive numbered commented notes on page one and that where the problem starts. When you looked at what had been swept under the carpet and not included in the main statement - it was a damned horror story and showed a nation deep in debt and in a totally unfit state to pay it's bills. I can't say, but would question even the ability to pay interest on these levels of debt and can see govt failing to even meet it's commitments to it's own citizens at some shortish future time.
Gotta say PK, I have no confidence that govt or whoever will, or even has the ability, to start on a viable path to a stable economy - it involves more than just govt. It is a massive task and is certainly in the league of decades as oppose to a few years. This lack of confidence is strengthen by the fact that govt elects to ignore it's own treasury findings and recommendations. In 2002 (or maybe 2003), the US Treasury finally published the most extensive report ever on the economy (took em 15 years). Within the week this was wiped under the carpet, a common habit, and followed up by fantasy policies of how the economy is wonderful blah. The content of the report was damning and simply showed the effects of a prolonged ineffective fiscal policy over decades and a tendency to borrow more than was prudent. Simplified examples - 94% of all homes and contents was actually debt (and sure is hell that is now well over 100%). Solutions were also recommended - but they were a horror story which no govt would like to deliver to it's electorate - so it was ignored.
It's hard to predict actual recession - that can happen thru even small external ripples, especially when around 46% of debt is in external control. If the dollar keeps declining, any action OPEC may take to cut their petro-dollar losses would have dramatic, and possibly permanent, effects on the dollar. Internally, there is a severe lack of an industrial base - this is probably one of the strongest areas as a shelter from recession - plus it obviously generates wealth internally and can help with international trading etc.
Believe me :winkwink: - it will be more than this board where there is a problem if the dollar continues to decline, forget any possible recession. This board will be less than a grain of sand in the overall scenario.
Na.. contrary to what you think - this is not crap about making countries look bad. It's about probably the biggest international debt problem on the planet and having mechanisms in place to begin to repay that debt and while currency remains under pressure - it's more serious than just country bullshit and can seriously affect millions of US people (who never played a role in this) and others elsewhere. OK, enough - I'm staying well clear :)
