The free market and the dollar.

[pavman]

Wow... I've been missing out.

Two quick points:

First... we really should clarify that a free market still needs a basic governmental framework to regulate industries. If not, then there'd be monopolistic tendencies that would undermine the People. But framework is the key here. Just enough to provide for defense, some regulation, and protection from con-artists, even some minor entitlement programs I'd be willing to slide on. But what we have now, and what some are proposing is a bit like national financial suicide.

Second, the Economist has a really good article that brings up this sort of thing in its current issue. I've pasted the relevant information from the article (synopsis, and the main point) below.

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Why is government unable to reap the same benefits as business, which uses technology to lower costs, please customers and raise profits? The three main reasons are lack of competitive pressure, a tendency to reinvent the wheel and a focus on technology rather than organisation.
...
Governments have few direct rivals. Amazon.com must outdo other online booksellers to win readers' money. Google must beat Yahoo!. Unless every inch of such companies' websites offers stellar clarity and convenience, customers go elsewhere. But if your country's tax-collection online offering is slow, clunky or just plain dull, then tough. When Britain's Inland Revenue website crashed on January 31st—the busiest day of its year—the authorities grudgingly gave taxpayers one day's grace before imposing penalties. They did not offer the chance to pay tax in Sweden instead.

Clue: The same thing that causes governments to be inefficient is what would happen, and has happened, in a pure socialist government. Even minor shifts in the free-market can have adverse effects. Look at how de-regulation (Ie moving from state-owned to private-owned, competitive markets) of energy is having good effects across the board. Yeah yeah...blah blah blah Kalifornia. Blah blah blah .... electricity. But the failure there was the implementation, not the de-regulation.

Recommended Reading: Liberal Fascism (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

pavman added to this post, 4 minutes and 18 seconds later...

And Prometheus... Way to have the foresight... getting ready to go back and buy property in the resort town on the cheap now? Or are you worried that we're just beginning to slide down a slippery slope that you might be better off in Montana, with the self-sufficiency and the remoteness of it? :)

I've been checking out condo prices in Miami/The Keys/Marco Island. Guess they really messed up when they over-built....might be a nice time to pick one up on the cheap for a nice little winter get-away place...or an investment property...although not in Miami...far too over-developed to make any money right now down there...maybe in 10 years it might payoff.

Good news... the dollar is starting to work its way back up...how long is uncertain, but we've seen the GPB/USD go from $2.07 at the beginning of the year down to $1.95... nice little profit there for some of us capitalists. I'm wagering that eventually the Euro will overtake the pound, and, when it does, that's when Great Britain will join the EU.

[prometheus]

And Prometheus... Way to have the foresight... getting ready to go back and buy property in the resort town on the cheap now? Or are you worried that we're just beginning to slide down a slippery slope that you might be better off in Montana, with the self-sufficiency and the remoteness of it? :)

I'll be staying up here. We are making our own self-sufficient homestead, in an anarcho-capitalist gulch. Speaking of individualists and community, ours is based on Galt's Gulch.

I don't see the dollar recovering anytime soon. The index shows it plateaued out for the last couple months, but I see another huge dip soon, as OPEC starts switching sales to other currencies other than dollar. Also, even if the index is showing it as stable, the fact of higher cost energy especially transportation costs is causing real cost inflation to american consumers. I predict some serious banking failures in the near future also. Americans are finally starting to try to live within their means, and the current consumer economy can't exist under these circumstances.






I don't see the dollar recovering anytime soon. The index shows it plateaued out for the last couple months, but I see another huge dip soon, as OPEC starts switching sales to other currencies other than dollar. Also, even if the index is showing it as stable, the fact of higher cost energy especially transportation costs is causing real cost inflation to american consumers. I predict some serious banking failures in the near future also. Americans are finally starting to try to live within their means, and the current consumer economy can't exist under these circumstances.

The dollar index is pushing record lows again today, I bet it will be at a record low again in the next few days. Metals are soaring as well.

[Sylvanus]

The dollar index is pushing record lows again today, I bet it will be at a record low again in the next few days. Metals are soaring as well.

Hooray!

[prometheus]

Hooray!

If you live elsewhere.

:suspicious:

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[prometheus]

Anyone else notice gold is still rising, even after the IMF has announced it will be selling 400 tonnes of it's gold reserves.

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[pavman]

Yes yes, don't remind me. I mentioned buying it around '01 to a friend. He talked me out of it. It steams my tomato! or whatever. I mean, $250 an ounce... what was I thinking?!

Even a small 10k investment would have panned out w/ 350% returns... between that, Apple @ $24 (before their splits), Google's IPO (smack smack smack), and Sun Microsystems ($20 -> $60 almost overnight).... I kick myself. But hey, it could be worse. I could have taken the risk and lost ;)

The dollar will rebound if the feds let it. They're just trying to put off inflation, but its an inevitable price we pay for a solid bull run. Every point we lose w/ regards to interest decreases the FVM for the dollar.

When did I start this thread?! Wasn't this in a different thread...the socialist thread?

[headrush]

Tomorrow I will answer you, but heres a good dissection of the lame book Liberal Fascsim
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[prometheus]

Silver topped $20 during trading in the Hong Kong market a few hours ago.

[thod]

The dollar will rebound if the feds let it.

The fed announced today another $300 billion auction. They are not going to let the dollar rise. They are worried about financial institutions going broke. They are flooding the market with so much cheap money that any that is has problems can borrow it from the fed. The result is the market is even more flooded with dollars. The best thing to invest in would be the printing press makers for all the dollars they are printing.

The gulf states have vast amount of dollars for the oil, the Chinese have vast amount of dollars for all their manufactured goods, everyone and his dog is sitting on mounds of dollars. Nobody wants to dump all their dollars on the market since that would devalue the stash of dollars they have left. They all want to get rid of them though and diversify their holdings. They will trickle feed dollars onto the market for years to come preventing any appreciation of the dollar.

The foreigners are buying up American industry and land as fast as they can. They have no choice with all those dollars. When you a boatload of Chinese goods arrives and you give them dollars they have to do something with them. They use them to buy your industry, they have nothing else to do with them. Its not a free ride for America, you cant just print paper and expect others to take it unless it can be used to buy stuff.

All this crap about oil prices is only to America. Prices have doubled in the US, they have gone up 17% in Europe. The dollar is worth less, not oil more. Forget looking at prices of gold and silver in dollars. Look at it in Euros to see if its really moving. The US is going to have hyper inflation. The government will manipulate the inflation figure to tell you its not happening. World food prices are up 15% on the year but you wont see it in the inflation figures. They will remove corn which has risen in price and substitute ipods which have fallen. The result is no inflation, even though i need food but can live without an ipod.

They wont tell you real inflation because then the fed will have to raise interest rates which is against its policy of supporting inefficient and stupid lenders. The government will have to pay its worker more due to inflation. The whole system is designed to understate inflation. The only exception is the foreigners. They will take a look at what they think real US inflation is. They wont buy dollars at 5% if inflation is at 10%.

I just don't see dollars as attractive. If the oil states start accepting Euros then its game over for the dollar. It will plummet. If countries move more of their reserves to Euros it will plummet. The whole thing is supported by such artificial structures. The simple fact is the US does not produce much that other people want and its is so badly in debt to them. Everyone must be worried that the US is not going to be able to pay its debts. They know they will go for the inflation option in order to remove those debts. In so doing they will rip off the foreigners who are holding that dollar debt. There is no reason to go near dollars and every reason to stay well clear.

[thod]

An interesting read from the Chinese perspective on the dollar.

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I can see soon that Mexicans will be importing American maids. You wont be able to stop at traffic lights in Mexico city without some damn yankee trying to clean the bugs off your windshield.


Bear Stearns went down today. We are not done yet. Trader in Londons comments.

"You can safely assume that Bear is not alone here," said an interest rate strategist at one European investment bank in London, who declined to be identified.

"We have been setting prices in swaps markets in recent days that were designed to say 'no deal' and at least one other U.S. investment bank -- not Bear -- dealt. That is very worrying if they needed the cash that badly. We have been forced to review our counterparty limits ever since."


So which will be next? Anyone still holding their savings in dollar accounts?