Our “Fiat” U.S. Currency is Backed by nothing more than the words “In God We Trust” and a sprinkle of Fairy Dust!
The world will soon demand that ALL currency be backed by Real assets!!!
Wow I think now I may just cut back all together on food and eat each night at the soup kitchen and maybe sleep there also.
Last monday a Federal Reserve Governor said it’s time to buy food, gas and ammo.
Look what Paulson just said :
Treasury Secretary Hank Paulson was pleased with the Senate vote.
“This sends a positive signal that we stand ready to rip off the American tax payer.” Paulson said in a statement after the vote.
The dollar will be worthless in a year’s time.
It’s only going up so the Wall Street bankers can cash in their bail out dollars into euros at a high rate then the dollar is going down to 10 dollars to buy a euro.
Just think George Washington rebelled against the British for a smaller tea tax than the Senate burdened us with the bail out of their rich Wall Street bankers. I am cutting out all my account in major banks Chase, Bank of America, Citi Group, Wells Fargo, Sun Trust and Met Life and moved the money to local banks so they can lend to local business. The majors just give our money to foreign people like Arabs which are according to the government our enemy as we are fighting them right now. So I say bankrupt the majors by taking your money out.
Also as my tax bill will increase $2,000 a year to pay for the Wall Street bail out I will be getting rid of cable, my phone and going to one of those pay as you go phones for 20 bucks I can keep it for 3 months by not calling people I do not need to that is a 7 dollar a month cell phone bill, I have cancelled my gym membership, I will not be buying coffee at Starbucks nor a new car for at least ten years, I will not be buying any new clothes for a while.
The only thing I will be paying is my house bills, taxes, water, electrical, gas. My food bills and my car gas bills. Forget buying anything else like taking a vacation, new computer, new wide screen TV.
Perhaps I will buy soap once every two months and try to take some from public restrooms I could use an old mustard jar I guess and pump the soap into it. Also get toilet paper from the restrooms.
Wow my life is kinda going to be very bad and boring and it will hurt to see $2,000 a year increase in my tax bill going to pay for some rich Wall Street banker’s hundredth house on the French Riviera.
It is obvious Wall Street bankers are black mailing Americans into paying them 850 billion dollars and more next year now that they know the black mail worked.
I am cutting back a lot perhaps I will eat at the local soup kitchen like they did in the Great Depression.
What was the logic behind this article? “Hmm. People still seem to be concerned about the dollar. I know, I’ll tell them the dollar gets STRONGER with the bailout. That’ll get them. Excellent.”
It is pretty sad when the main arguments for something that seems so counterproductive on the surface is “Well, we have to do something.” and “The dollar won’t necessarily tank.”
Instead of sending the same cow paddy through this time with tax cut sprinkles on top that might not tank the dollar, come up with something that is actually within the confines of what Congress is supposed to do, legislate a contingency plan for the workers and homeowners they represent in case the doomsday predictions we are hearing manifest, or a plan that directly addresses the strength of the dollar or job creation – or programs to help people who lose jobs in industries that suffer because of this slowdown transition to professions that are growing, and help those emerging industries that America can compete to become the epicenter of. This is the least creative and most potentially destructive option, and the American people see it for what it is and will not support it no matter how much the media continues to spin in favor of it or what scare tactics are launched. It would be such a beautiful thing is legislators would actually take advantage of this clarity and enthusiasm on the part of the American people to reform our financial system in ways that at another time might seem too drastic but would help us as a nation and individually be less dependent on credit and more automonous in our prosperity.
I seem to be drawn back over and over to President Bush’s Comments these last 7 years. He continued speaking of “The New World Order”. I believe he has ushered into our U.S. Financial Infrastructure the likes of Past Dictators from abroad, which will Gladly Come to our Rescue.
One can only take what is given in the form of publication or first hand knowledge, to make comments or judgmental calls on ones behavior.
However this being said, the Close Relationship of Prescott Bush and one certain Bank headquartered in N.Y. with direct ties to the Past Dictator of Germany, makes one think, “what is really going on here”?
Will the U.S.Dollar continue as it has, being the #1 form of payment in the world, for “All Debts Public and Private”? I don’t think so. I truly believe these “Double W” (Washington/Wall Street) problems have been Carefully Orchestrated for many years.
Now we have another perspective on the Current Problems.
How do we solve this MAJOR PROBLEM which the average Honest Hard Working TAX PAYING VOTING citizen, which BELIEVE his elected officials are “taking care of he and his family” can do to correct this?
YOU ALREADY HAVE! The good hard working people of this Great Nation have spoken. We have spoken with a LOUD VOICE!!!! The HOUSE of REPRESENTATIVES… In other words, Every Voting Person’s VOICE in Washington cried aloud! They did not pass the BAILOUT!!!! We did our Job and our Representatives did what WE ASKED them to do.
Now, are we going to let the U.S. Senate, which by the way, WORK FOR US TOO, get away with passing the BAILOUT, just because they, AS ALWAYS have found OPPORTUNITY in ATTACHING to this bill, MANY other ADDITIONS which have nothing to do with this BAILOUT!!! They passed it because they saw OPPORTUNITY to get other MORE PERSONAL AGENDAS passed….
Wake up Voters! You have WON the BATTLE, but the WAR IS FAR FROM OVER….. CONTINUE CALLING YOUR REPRESENTATIVES, Let them know you DO NOT SUPPORT ANY APPROVAL of a Bailout, REGARDLESS of how much FAT BACK they put into the SOUP!!!! It’s STILL NOT GOOD FOR US! Talk about Lipstick on a PIG! My Heavens….
AMERICAN PEOPLE, I’m so VERY PROUD of you……… In my travels in 14 other countries, We AMERICA have ALWAYS been looked up to with RESPECT, INTEGRITY and a PROSPEROUS Nation that Nearly Everyone I have met wanted to come HERE. TO AMERICA THE GREAT!!! The LAND of OPPORTUNITY.
Please! PLEASE! Do not give up the fight. Keep calling your House Members in Washington. Tell them NO, NO, and HELL NO to ANY BAILOUT OF WASHINGTON’S BED PARTNERS. The World or Sky will not Fall like they want you to believe! ONLY “THEIR” CREDIT RATING FOR A CHANGE!!!!!!
Thank Goodness, I live in a Country that Freedom of Speech is LEGAL! I have been to other Lands that are not FREE!
Good Luck AMERICA! KEEP CALLING and EMAILING YOUR ELECTED OFFICIALS!!!!!!!!
Pollyana Paul – I like that one.
The austrian schol of eceonomics has proven over and over again that the government cannot artifi9cally control prices, housing prices will continue to decline with associated mortgage defaults. And trhere isnt any government or person on the planet that can change that, there never has been and never will be.
So if something so fundamental is out of balance how is a bank bailout that is designed to prop up the value of the distressed assets (mortgages and all the stupid derivitves) going to fix anything? It will not work.
I dont care about revenge on wall street, all I care about is the idea that printing money and trying to artificially maintain pricing on something as nebulous as CDS contracts cannot work and will ulitamtely cause an extension of the coming recession, possibly pushing it into a depression CAUSED BY THE BAILOUT PLAN!
Young man I responded to your article a little to soon..I just finished watching you video..are you just plain NUTS ???? NO BAILOUT MEANS NO MORE GIVE AWAYS TO THOSE WHO CAUSED THIS PROBLEM !!!!!!! THE BANKERS BROKERS FUND MANAGERS ETC…THEY OWE THE HONEST AMERICAN PEOPLE….LET THEM DIG INTO THEIR DEEP POCKETS AND LET LOSE THE DOLLARS THAT THEY SWINDLED AND STOLE TO COVER THIS CRISIS…YOU YOUNG MAN NEED TO GO BACK TO REALITY SCHOOL.. AGAIN ARE YOU JUST PLAIN ”’ NUTS ”’
Ya know buddy, you are stil just writing stuff for the sake of stuff..what do you see when you open your eyes in the morning…you certainly don’t see reality !!! as the one person said… what about the money supply numbers that they, and we all know who they are don’t we,do not want us fairly educated people to know about anymore …maybe you are to early in years to know what that means..The money printing presses have be smoking for a long time now and about to burn out..The dollar soon to be worthless…the worst thing this country could have done is to get off the gold standard…Young man, do you know what that was ?? No bailout for those who were responsible for this crap and were well aware of what they were selling and no more overprinting of money.
It will be better for the dollar and the taxpayers if Congress can hold the line against the Wall Street bailout package. They are under tremendous pressure from Wall Street lobbyists, both inside and outside the government, right now.
All eyes are on the Senate tonight; if they fail to stop it, then we’re left with only the House to stop it on Friday. Bush is crazy; he’ll sign any bill except stem cells (which can help taxpayers).
There are much better ways to deploy $700 billie than on Wall Street, as we have found out this year (and this week, witness Monday). Close all of those “non-banks”.
Instead, we should be beefing up the commercial banks, broadening medicare to cover everyone, strengthening social security, and the list goes on. It’s our money; spend it on us.
It is important not to prove the market right on a macro trade.
I don’t think there is enough information yet to say — obviously inflation because injection of liquidity/”printing” or deflation because banks will not make loans.
My bet — we’ll be whipsawed by inflation/deflation cycling and volatility caused by these creative interventions.
M3 the total money supply has not been released to the public since 2006. The government is printing money as fast as possible inflating the money supply. Look at what the real experts that have been predicting about the dollar: Nouriel Roubini, Meredith Whitney, and Peter Schiff have to say about it. I think that the FED is out of control and the dollar will decline in value.
I agree with most of the people here. The dollar is toast. The Federal Government will have no choice but to monetize the increasing debt. This bill will not solve the center of the crisis just put a bandage on it. The housing crisis will continue to get worse as now people with good credit and capable of making their house payments walk away from their houses because they are upside down. They don’t care if credit is available, they are not refinancing because of the loss of value in their house and are not going to take the loss. Those are the people that we should be helping. They played by the rules and still got screwed.
Strong or Weak is only in comparison to another currency. The Euro was been over inflated so it is not unexpected to see a “correction”. However, there are too many factors we the people have zero control over (both U.S. and foreign country factors) for 99.9978% of the population to produce and educated long term response.
Regarding the Yuan; the yuan is currently overvalued by probably 50% against most more “stable” currencies. However this will not be corrected anytime in the foreseeable future, imo. The reasons are fairly simply:
1) China is one of the fastest growing economies, yet still has a favorable exchange rate to most “Western” countries. Devaluation of the currency would halt the growth immediately.
2) China is major importer of goods, and many of these are higher end goods. Devaluation of the currency by 50% would eliminate much of these imports (and needed exports for many western countries).
3) The global financial markets have too much invested in China (and needed continued growth) to absorb such a market valuation change.
What is going to happen to the Dollar compared to other currencies is less predictable than forecasting how many hurricanes are going to form in 2018.
Absolutely not! Not only will the US be further in debt (but well endowed with toxic paper!) but precedent will be set for bailing. When the credit default swap market goes kaboom, the dollar will tank, regardless of what we do.
The Euro is weakening faster than the USD. The ECB has supplied as much or more liquidity to banks but this is returned to the ECB. hence banks don’t trust the Euro. The Euro may even break off into national currencies. The diversity of culture, industrial traditions and so on is much higher than in USA . One currency, one interest rate does not cover this if economy faces headwinds.
If you only measure the dollar against the Euro, I may hold steady or even gain.
But guess what? The Euro is not the whole world. The Euro and the Dollar combined aren’t the entire world.
Against world money as a whole, we have a long ways down to go.
The system was we have known it is imploding. As many others have said here today, even a trillion $ pumped into the system is not going to stop it.
The New World Order is about to get a new Order. I hope it is a good one.
Karen, glad to hear another person thrown into frenzy by the media. Overall people are scared like crazy due to media fear mongering and losses in 401k’s and the like. Mark my words: ALL MARKETS ARE CYCLICAL. Take for example 1999, all people could talk about is the new economy, all the money they were making, and the US is the greatest country ever. Then the 2000’s hit where people thought the US was dead they were losing 60% of their money etc. When the media arms people with just enough information about credit markets, default swaps, and mortgages to be dangerous, they tend to say and do crazy things. If it is all doom and gloom why do we have the greatest investor in American history, Warren Buffet BUYING. According to everyone he should be running down Wall St with his hair on fire. Everything will be fine, now is the best buying opportunity in 6 yrs to roll around.
Banks and Investors are pulling money out of other world markets to save themselves from being insolvent. Paying more than when they invested in those markets losing over 10% in trasaction. since it is a free market “Suppy and Demand” works in favor of the foreign govt’s. It is a good time to send money to other countries. $ is gonna take a dive more than 15% sooner after bailout. coz mortgauge securities are owned by foreign investors!!! so most countries get their pie in $700 Billon Bailout.
I just can’t see how it is possible for our dollar to continue to strengthen if we inject 700 billion of them into banks. Adding $700 billion from nowhere is going to negatively effect the vallue of the dollar. There is no way in can’t. Which means we are going to hear all those republicans and their “Drill baby Drill” chants because oil is going to go through the roof on the weak purchasing power of the dollar.
It depends on how much damage we have done to the world economy….. My guess is that all the currecies will be down but dollar will be down less. So you might feel dollar goes up, but don’t let it fool you.
We should all have a moment of silence while we mark the total end of western captialism and the dollar and mark the beginning of comunnist captialism and the rise of the yuan.
Thank you
Basically the dollar is history right now. It is going to take about two years for the chinese yuan to become the world currrency.
The US economic model is death and even 15 trillion dollars from tax payers can not even begin to wipe the 53 trillion dollar public debt yet alone wipe the 84 trillion private debt we owe in America.
Basically the US economy has collasped and even 700 billion from the taxpayers of America is merely going to let the super rich escape with their money while everyone else falls.
Just how did the Wall Street bankers think that with American wages going from $40 to $52 an hour for a good paying blue collar job to $12 an hour that their ponzi scheme could keep going?
The super rich Wall Street guys are running from the mess they made and want Main Street to bail out their personal bank accounts.
Give me a break and at least have the government send us back to school to learn mandarin which in two years so at least we will be able to understand what our masters are telling us what to do.
I am voting for the yuan to become very strong in the next two years. The US is history if we give into the super rich Wall Street bankers.
Why not just create a new bank with the 700 billion and loan to real people who can pay it back? Crisis solved. Let the Wall Street banks fail. Why throw good money after bad?
OH I forget any US dollars are bad dollars now that captialism in the west has failed. So it’s let’s not throw bad money after bad money.
The Dollar is strengthening because the speculators have pulled out a ton of money from Oil Futures — which explains why oil has fallen a whopping $50+ in the last 8 weeks — and have turned that to buying Dollars! It has nothing to do with the strength of the US economy, but the clout of the speculators to control the global economic scenario! Scary… when we realize that the so called ‘era of globalization’ has made commodities, currencies & even economies, a pawn at the hands of these speculators!!!
The trade deficit has decreased, mostly because of the dropping price of oil and the relatively weak dollar we saw earlier this year. If the dollar continues to rally, the trade deficit will begin to increase again.
It is hard to look long term, especially if what helps in the long term causes pain today, but America and Americans would be better off in th long run with a weaker dollar. That would bring more manufacturing jobs back from overseas and keep more of our money here. The idea of a service based economy is phoney. Worse a stronger dollar will only contribute to even more service sector jobs being sent overseas.
Section 128 of the Senate’s housing bill called Acceleration of the Effective Date will effectively allow for the Fed to increase the money supply without pushing the federal funds rate below the target rate. The effect that the federal funds rate has is a limiter on the Fed to keep from pumping money into the market at will. Section 128 will allow for the Fed to pay interest on bank acoounts held by the Fed. This will remove the incentive from banks to lend surplus cash to each other. The result is the federal funds rate will not fall below the target in response to the Fed’s inflating of the money supply.
Remember Say’s law: too much money chasing after too few goods will cause inflation. Bottom line is that the dollar will deflate once (unfotunately) this bill passes. Along with that delfation, oil will rise as a response, we will see prices on the rise again in the US.
But remember, we, The People, are ignorant of the “complexities” of this bill and the economy. Just ask the media and the spinmeisters in the goernment.
I’m also inclined to disagree with the article, and agree with Marcus. It’s always hard to tell which are the first-order effects and which are the opposing second-order effects, in the short term. That’s why it’s really hard to time the market in the short term.
But in the long term, I don’t see America’s overconsumption problem changing, until the dollar declines, and so after more than a year of being blissfully in money markets, I’ve just fully reinvested in non-dollar denominated funds and expect to stay there for a few years.
And heck, I partly hope I’m wrong and years from now my investments stink, but I’m still buying very reasonably priced imported Walmart merchandise, but I doubt it.
No. This guy likes to report noise. Two months up or down are not long term trends. The annual US money supply growth has been in double digits since 2006. Inflation is ~12% using pre-1980 mythologies. Long term the dollar will weaken.
The dollar isn’t rallying or getting stronger… the euro is weakening so the dollar is relatively gaining strength.
If this bailout passes, it will weaken the dollar. As most third graders can tell you, if the government “prints more money” it devalues the money that’s already there.
Yes. The dollar will continue to rally as the trade deficit decreases, which reduces the supply of dollars in circulation overseas.
Bond issuance is a second-order and bailout is a third-order cause.
To marcus; hogwash. The dollar may be devalued, but at least it’s reaching the end of the cycle. The Euro burst that has been building ofr the past 12 months will be even more dramatic. And this will be teh EU’s first real roadblock, meaning there will be a lot of chaos and false starts in dealing with it as the different member countries try to pull their own way.
The US$ is strengthening relative to other currencies, especially the Yen and Euro, because their economies are facing a severe economic slowdown as well. But, I think the US debt is what will determine the value of the US$ over the longer term and I see that debt increasing dramatically given the multitude of bailout packages, both current and future. The Federal budget debt currently stands at $9.7Trillion with the debt ceiling recently being raised to $11.3Trillion to account for the potential $700Billion bailout package under consideration. There will be many more such bailouts as corporations are already lining up for government handouts. As the US and global economies go deeper into recession, the federal budget deficits will increase even more due to the increased expenditures and decreased revenues. I fully expect the Federal debt to be $15Trillion within the next 4 years. You also need to consider that the total US trade debt is between $3 and $4Trillion. As the economy slows and the supply of treasuries increases, foreigners will cease to buy our debt, putting upward pressure on interest rates. I fully expect the Fed and Treasury to resort to massive printing of US$ which will cause the value of the US$ to plummet. We are digging a hole that we will not be able to get out of.
It is my understanding that the Chinese, Saudis, Japanese and other world economic powers were told they will be guaranteed their contracted rate of interest (7-10%) for our National Debt. A worse case scenario situation the Government will confiscate the Assets of the U.S. Treasury especially T-Bills that the Wealth have taken comfort with.