28 replies to this topic

[acidhead]

questionmark, on 01 January 2013 - 08:39 PM, said:

in fact many years of the last decades the GNP grew less than the total debt... they still call it growth...

of course they still call it growth.... just like they still reach their target of 2-3% inflation levels because fuel and food are no longer counted.... lol

we're living in an era of scams and schemes and it's the GOV doing it

[me-wonders]

Wow you guys are great.  We have a great comedy routine going here.

[me-wonders]

The liquidity trap involves the value of currency and so does the exchange rate.  Because oil is traded in dollars, the world wants dollars.  Because everyone wants dollars, this keeps the value of the dollar up.  Saddam began selling oil in Euros, which is great for Euros and devastating to dollars, and although no one said so, I think this was behind Europe's objection to the invasion of Iraq.  Iran has played with the idea of selling oil in Euro's and this most likely would result in military intervention.  At least that is who things look to me?

Like if the world is holding our dollars, don't we have to print enough for us to use?     If we print too many dollars we are in trouble, but how can we not print them if they are held in other countries.   And if a country is holding a lot of dollars, it surely doesn't want them to loose value.   I hope you all come up with more good lines to explain the exchange rate and value of the dollar.

http://en.wikipedia....d_exchange_rate

Quote

Maintenance

Typically, a government wanting to maintain a fixed exchange rate does so by either buying or selling its own currency on the open market. This is one reason governments maintain reserves of foreign currencies. If the exchange rate drifts too far below the desired rate, the government buys its own currency in the market using its reserves. This places greater demand on the market and pushes up the price of the currency. If the exchange rate drifts too far above the desired rate, the government sells its own currency, thus increasing its foreign reserves.
Another, less used means of maintaining a fixed exchange rate is by simply making it illegal to trade currency at any other rate. This is difficult to enforce and often leads to a black market in foreign currency. Nonetheless, some countries are highly successful at using this method due to government monopolies over all money conversion. This was the method employed by the Chinese government to maintain a currency peg or tightly banded float against the US dollar. Throughout the 1990s, China was highly successful at maintaining a currency peg using a government monopoly over all currency conversion between the yuan and other currencies.^[3][4]
On the 6 September 2011, the Swiss National Bank has imposed a franc ceiling, for first time in three decades, against the euro. In 1978 a franc ceiling was set versus the Deutsche Mark to stem currency gains.
Criticisms

The main criticism of a fixed exchange rate is that flexible exchange rates serve to adjust the balance of trade.^[5] When a trade deficit occurs, there will be increased demand for the foreign (rather than domestic) currency which will push up the price of the foreign currency in terms of the domestic currency. That in turn makes the price of foreign goods less attractive to the domestic market and thus pushes down the trade deficit. Under fixed exchange rates, this automatic rebalancing does not occur.
Governments also have to invest many resources in getting the foreign reserves to pile up in order to defend the pegged exchange rate. Moreover a government, when having a fixed rather than dynamic exchange rate, cannot use monetary or fiscal policies with a free hand. For instance, by using reflationary tools to set the economy rolling (by decreasing taxes and injecting more money in the market), the government risks running into a trade deficit. This might occur as the purchasing power of a common household increases along with inflation, thus making imports relatively cheaper.
Additionally, the stubbornness of a government in defending a fixed exchange rate when in a trade deficit will force it to use deflationary measures (increased taxation and reduced availability of money), which can lead to unemployment. Finally, other countries with a fixed exchange rate can also retaliate in response to a certain country using the currency of theirs in defending their exchange rate.

Edited by me-wonders, 02 January 2013 - 03:42 PM.

[DieChecker]

me-wonders, on 02 January 2013 - 03:39 PM, said:

The liquidity trap involves the value of currency and so does the exchange rate.  Because oil is traded in dollars, the world wants dollars.  Because everyone wants dollars, this keeps the value of the dollar up.  Saddam began selling oil in Euros, which is great for Euros and devastating to dollars, and although no one said so, I think this was behind Europe's objection to the invasion of Iraq.  Iran has played with the idea of selling oil in Euro's and this most likely would result in military intervention.  At least that is who things look to me?

It is entirely possible that the Euro thing was a factor in Iraq and might be in Iran also. It would be naive to believe that top politicians are not considering those things.

[acidhead]

me-wonders, on 02 January 2013 - 03:39 PM, said:

The liquidity trap involves the value of currency and so does the exchange rate.  Because oil is traded in dollars, the world wants dollars.  Because everyone wants dollars, this keeps the value of the dollar up.  Saddam began selling oil in Euros, which is great for Euros and devastating to dollars, and although no one said so, I think this was behind Europe's objection to the invasion of Iraq.  Iran has played with the idea of selling oil in Euro's and this most likely would result in military intervention.  At least that is who things look to me?

Like if the world is holding our dollars, don't we have to print enough for us to use?     If we print too many dollars we are in trouble, but how can we not print them if they are held in other countries.   And if a country is holding a lot of dollars, it surely doesn't want them to loose value.   I hope you all come up with more good lines to explain the exchange rate and value of the dollar.

http://en.wikipedia....d_exchange_rate

What keeps the US$ the world's reserve currency is the Military Industrial Complex and of course the Federal Reserve Corporation.  For the time being it really doesn't matter how much US$ are in world circulation because it's still considered the worlds reserve currency therefore the dollars are being used to trade petroleum.  It's liquidity is what gives the dollar it's confidence.    In essence, Petroleum = the US$.  American military intervention into foreign nations is what keeps this charade of global currency domination, also the fact that the USA consumes a majority of the markets petroleum.  Without these two factors the game ends.  This is why the Fed is important to the scam.  The Fed is Dr. Feelgood.

I also believe Iraq was invaded to stop Saddam from trading in competing currencies.  It could have been anything... the Euro, the British Pound or it could have been something devastation to western Central banks.... gold and silver..... look what happened to Libya for example.  Gaddafi was trying to encourage African leaders to support his petrol for gold plan.

What was the price of fuel at the gas station 10 years ago?... and how much is gasoline today?  Yes, there is rampant inflation happening.... the oil market is demanding more US$ in trade.  Factor in globalization and it's the big corporations who benefit from higher petrol prices whereas competition is decreasing.  It's a balance beam.  The larger the corporation the better leverage.  Also remember that the inflation statistics no longer include fuel and food and it's easy to see how politicians can falsely claim that inflation levels are at 'normal' levels.

[AsteroidX]

Unemployment is a skewed number as well. They use this arbitrary number not considering that weve been in this non job growth since 2008 and many people just dont show up in the unemployment numbers anymore.

Many people just survive on less nowadays and that hurts our consumerist based economy.

[me-wonders]

acidhead, on 03 January 2013 - 04:06 AM, said:

What keeps the US$ the world's reserve currency is the Military Industrial Complex and of course the Federal Reserve Corporation.  For the time being it really doesn't matter how much US$ are in world circulation because it's still considered the worlds reserve currency therefore the dollars are being used to trade petroleum.  It's liquidity is what gives the dollar it's confidence. In essence, Petroleum = the US$.  American military intervention into foreign nations is what keeps this charade of global currency domination, also the fact that the USA consumes a majority of the markets petroleum.  Without these two factors the game ends.  This is why the Fed is important to the scam.  The Fed is Dr. Feelgood.

I also believe Iraq was invaded to stop Saddam from trading in competing currencies.  It could have been anything... the Euro, the British Pound or it could have been something devastation to western Central banks.... gold and silver..... look what happened to Libya for example.  Gaddafi was trying to encourage African leaders to support his petrol for gold plan.

What was the price of fuel at the gas station 10 years ago?... and how much is gasoline today?  Yes, there is rampant inflation happening.... the oil market is demanding more US$ in trade.  Factor in globalization and it's the big corporations who benefit from higher petrol prices whereas competition is decreasing.  It's a balance beam.  The larger the corporation the better leverage.  Also remember that the inflation statistics no longer include fuel and food and it's easy to see how politicians can falsely claim that inflation levels are at 'normal' levels.

I did not know  "Gaddafi was trying to encourage African leaders to support his petrol for gold plan."  Darn, now I feel sick to my stomach.

Remember when airlines were regulated and we had many large airlines?  I wish we would return to this and also regulate the oil trade as well.  It was genius to create anti monopoly laws, and perhaps we have created a monster by negating concern for the small guy and no longer protecting the small guy in favor of the big guy?

Edited by me-wonders, 03 January 2013 - 05:15 PM.

[me-wonders]

Sutemi posted this link in the economic crisis and civilization thread
http://www.guardian.co.uk/commentisfree/2012/dec/29/fbi-coordinated-crackdown-occupy   

It is another explanation of  how the FBI and Bankers were involved with crushing Occupy.  It can be a very hard read, because of police brutality.

[Corp]

Well around these parts the view of the economy is DDDDDDDDOOOOOOOOOOMMMMMMMM!!!!!!!!!!!

[Yamato]

acidhead, on 03 January 2013 - 04:06 AM, said:

What keeps the US$ the world's reserve currency is the Military Industrial Complex and of course the Federal Reserve Corporation.  For the time being it really doesn't matter how much US$ are in world circulation because it's still considered the worlds reserve currency therefore the dollars are being used to trade petroleum.  It's liquidity is what gives the dollar it's confidence. In essence, Petroleum = the US$.  American military intervention into foreign nations is what keeps this charade of global currency domination, also the fact that the USA consumes a majority of the markets petroleum.  Without these two factors the game ends.  This is why the Fed is important to the scam.  The Fed is Dr. Feelgood.

I also believe Iraq was invaded to stop Saddam from trading in competing currencies.  It could have been anything... the Euro, the British Pound or it could have been something devastation to western Central banks.... gold and silver..... look what happened to Libya for example.  Gaddafi was trying to encourage African leaders to support his petrol for gold plan.

What was the price of fuel at the gas station 10 years ago?... and how much is gasoline today?  Yes, there is rampant inflation happening.... the oil market is demanding more US$ in trade.  Factor in globalization and it's the big corporations who benefit from higher petrol prices whereas competition is decreasing.  It's a balance beam.  The larger the corporation the better leverage.  Also remember that the inflation statistics no longer include fuel and food and it's easy to see how politicians can falsely claim that inflation levels are at 'normal' levels.

Amen brother.  

Those are certainly financial motives for these wars acidhead.   Unfortunately they need not win the tacit approval of all of government to wind up in our policies.  Too many massive grand policy decisions are made by too few people in too tight of quarters.   The Executive Branch is off the chain in this country and it's surprising how asleep we are about it.   We just have way too much faith in the bomb blasts of bureaucrats when the bombs aren't going off over our own heads.

The OP is a great topic of discussion our media won't ask questions about, and that our policymakers don't want us to think about.  Thanks, me-wonders!

[Yamato]

me-wonders, on 03 January 2013 - 04:45 PM, said:

Remember when airlines were regulated and we had many large airlines?  I wish we would return to this and also regulate the oil trade as well.  It was genius to create anti monopoly laws, and perhaps we have created a monster by negating concern for the small guy and no longer protecting the small guy in favor of the big guy?

We've got executive departments specifically devoted to energy and transportation, me-wonders.   Thousands of air-conditioned overpaid "deciders" sitting in their leather chairs in their marble halls clicking their mouses and making the big wheel turn and the big money get spent.  The monopoly that plays by a 2nd set of rules, that runs over markets with impunity, that violently takes our money by force, is the federal government.   The Keynesians have taken over our policy making in Washington and are pretty much guaranteeing our great prosperity is coming to an end.   We will never stay a superpower if we can't let go of this "too big to fail" economic plan.  Saving market losers riddled with impossible debt like GM and its pensioners, and at the same time creating ridiculously many barriers to entry for the small businessman's start-up, often lovingly referred to as "regulations".   Democrats and "liberals" just love to proclaim that there's not enough regulations when the problem with regulations is one of quality, not quantity.   We need better regulations where better regulations come from - the free market.   Paying bills and bankruptcy are two examples.

[me-wonders]

I think there are things about monopolies and oil that we need to know.

Quote

http://www.usesc.org...fEnergy0312.pdf

We now borrow about a billion dollars a day to import oil. If we pump more in this country, from
the Gulf of Mexico, Alaska, wherever, and thus move from importing slightly more than half our
oil to importing slightly less, it helps our balance of payments a bit, but that's it. OPEC just raises
the price so we still borrow about a billion a day. If we could use this $350-$400 billion annually to
buy domestically-produced fuel (other than oil) it would be a huge economic stimulus to the
country instead of being what it is now, a massive economic drain and increase in our
indebtedness. Once vehicles allow fuel competition, production of non-petroleum fuels will
increase substantially. Competition at the pump will drag down the price of oil, and a large share
of these competing fuels will be produced domestically. Those factors together would add up to a
savings in transportation costs of about $2,000 per family annually. Thus producing our own nonoil
transportation-based fuel would be like giving each American family a substantial tax cut – paid
for by the oil producers: the Saudis, the Iranians, the Venezuelans, and others at whose
predictable pleas of economic distress we should smile sympathetically.

However, I totally disagree about smiling about the economic distress of the oil countries.   These country's leaders are struggling to stay in power, and if they can not sell oil, things will be real nasty!  Oil has given these people an affluence they never had before, and their populations have come to expect a higher standard of living.  These countries will not return to poverty peacefully, and they are now more armed they ever were.   In away, our situation is like the family that thought it would be fun to own an wild animal, and feed it until got so big, it became a threat.  Now the family has to dump the pet, but there is no good way of doing this.  I am not sure how well these countries have invested in the industry they must have if they are going to transition away from an oil based economy to an industrial economy, and industrial economies are no longer the labor intense economies of the past.   I think we are headed for one heck of a mess.

Edited by me-wonders, 06 January 2013 - 10:23 AM.

[libstaK]

I've always liked Peter Schiff's take on current economic issues, you might enjoy his blog here:

His latest commentary is on the "underreporting of inflation".

http://peterschiffbl...-inflation.html

[DieChecker]

me-wonders, on 06 January 2013 - 10:01 AM, said:

However, I totally disagree about smiling about the economic distress of the oil countries.   These country's leaders are struggling to stay in power, and if they can not sell oil, things will be real nasty!  Oil has given these people an affluence they never had before, and their populations have come to expect a higher standard of living.  These countries will not return to poverty peacefully, and they are now more armed they ever were.   In away, our situation is like the family that thought it would be fun to own an wild animal, and feed it until got so big, it became a threat.  Now the family has to dump the pet, but there is no good way of doing this.  I am not sure how well these countries have invested in the industry they must have if they are going to transition away from an oil based economy to an industrial economy, and industrial economies are no longer the labor intense economies of the past.   I think we are headed for one heck of a mess.

Well if Kuwait is any hint, these nations will be dangerous for about 3 to 5 years after the oil runs out, because by then lack of maintenance and lack of supplies will make all their American bought war machines into yard debris. The Kuwaitis could not protect themselves from Iraq (Iraq War 1) because they could not keep any of their US tanks running for more then a couple days.

It is only the citizens with connections to the rules who are doing well there, you know. Thousands, or millions of tribesmen are forced to live in abject poverty, or live as nomads, with no home at all.