November 20, 2007

US Dollar: "Ben Bernanke and George Bush, why do you hate me so?" Are we on the verge of a total US dollar collapse?


Never thought it'd happen so quick, but it appears the US dollar is going into crisis mode now.
* OPEC talking about moving out of the dollar.
* China talking about getting their reserves out of dollars.
* The Fed lowering interest rates in panic mode, intentionally destroying the dollar.
* Bush and Paulson doing absolutely nothing to protect the currency.
* Supermodels and rappers saying no more dollars.
* Countries with dollar-pegs experiencing hyper-inflation and about to pull the plug
* The dollar hitting record lows against other currencies on a daily basis.
* Americans clueless, some thinking this dollar destruction is a good thing

At what point HP'ers do people around the world throw in the towel and rush out of dollars like Phoenicians are rushing out of condos? At what point does this free-fall turn into a rout? And isn't it amazing that housing panic has led to dollar panic?

Nov. 20 (Bloomberg) -- The dollar fell to a record low against the euro and the Swiss franc on speculation a U.S. government report will show a deepening property slump, prompting the Federal Reserve to lower interest rates.

The dollar declined against 13 of the 16 most-active currencies as economists forecast Commerce Department data today will show U.S. housing starts dropped to a 14-year low in October. Losses in the dollar also accelerated on speculation Middle Eastern nations will consider changing their fixed exchange rates to the U.S. currency.

``The dollar is hard to buy,'' said Motonari Ogawa, vice president for interest-rate products and foreign exchange in Tokyo at Morgan Stanley, the world's second-biggest securities firm. ``The markets are fixated on today's U.S. housing data.''

41 comments:

Anonymous said...

Don't forget that the drug cartels in Colombia and Mexico are moving away from the dollar also. That's a huge hit.

Anonymous said...

The overseas market has been more volatile today than my drunk uncle Frank during Thanksgiving dinners.

Anonymous said...

Freddie Mac's quarterly loss much bigger than forecast due to $8 billion writedown, $1.2B credit loss provision. More soon.

Anonymous said...

The vast majority of our fellow countrymen/women are clueless to our government's monetary policies. I don't only blame Bush; I blame all the way back to Richard Nixon. I don't believe that we should have been taken off the gold standard. Now, all we have are a bunch of green-colored pieces of paper that are only PARTIALLY backed by gold. How much they are backed by gold is anyone's guess. But, you must admit that our government has put in some nice security features.

Anonymous said...

When Wal-Mart stops taking my money, then I know i'm sunk!

westwest888 said...

I've often thought that the collapse of Fannie Mae or Freddie Mac would be the critical mass, the chain reaction, the nuclear meltdown that would change things forever.

I've also thought that they are both so disorganized that they wouldn't know they were insolvent until 6 months after it happened. We're talking about a place that lets blue collar workers (groundskeepers) become accountants if they feel like it (while they're working there for life), a place that tries to get Georgetown MBA grads for $55,000 a year, a place that probably gets as much done in a pay period as Goldman Sachs gets done on a Monday before lunch in a snowstorm when no one can make it in on time. I have zero confidence in them even to add up the expenses of the office coffee club and divide it correctly.

And now the first ding in the armor:

http://tinyurl.com/37rxez

"Freddie Has 3rd-Quarter Loss, Seeks to Raise Capital"

So what if they can't get capital? Do they get it from Congress as an FY08 appropriation? The treasury? The Federal Reserve? Does every dollar holder in the world become an unwitting investor in the 1 in 5 home loans these agencies hold?

What about when Fannie needs capital?

Anonymous said...

It's interesting that Paul Krugman (NY Times columnist and economist) isn't too concerned about the dollar:

http://krugman.blogs.nytimes.com/

Anonymous said...

That's because Krugman is an idiot.

Malcolm said...

But it’s going to be OK. Don’t you see….. Buffet will buy countrywide, Buffet will buy Fannie and Citi, and WaMU.

Hold on, Buffet will save us all….!!!

Oh, who is John Galt!

Anonymous said...

A topic I expect to show up soon is what this means to US military involvement overseas.

The US military bases buy much of what they need to keep them running(food, water, energy) from the country they're placed in.

I imagine next year they'll ALL need greatly increased budgets to keep them up and running.

Anonymous said...

Yes, most Princeton professors are idiots, I understand.

borkafatty said...

Question of the day...will the dollar touch the 74 mark today...

I am going to break out my frank Sinatra 8 tracks....!!!!!

Anonymous said...

Actually, Krugman said:
"There’s always the possibility that I’m missing something big, but right now that’s where my thinking is."

So Mr anon 2:42 smart guy, what is it that the 'idiot' Dr. Krugman has missed? Please tell us.

anonojew said...

How can my hose be deflating at the same time the dollar is in collapse?

anonojew said...

For an idiot, Krugman has a fairly plyable prediction.

So there’s a story that runs something like this: a plunging dollar will eventually be very expansionary, and will force the Fed to raise rates to cool off the economy — not now, but a year or two from now. But the expectation of this future rise in short-term rates will push up long-term rates now, causing a recession even if the Fed does nothing

Anonymous said...

If Krugman had been in charge of the Fed we wouldn't be in this mess in the first place (assuming he could withstand the pressure from GW Douche and gang).

about_to_puke said...

Maybe America is doomed afterall,

In this single thread, we've got people praising the very same Georgetown MBAs and Princeton professors (Krugman) who told us to decimate our workforce and send the jobs to India to increase shareholder value (AKA the elite investor class wealth).

(BTW - You are not part of the 'investor' class unless you can live indefinitely and provide for your children's future from investment returns alone; that is, you don't need to ever work again.)

...and 20 years of massive trade decifits latter....our country hangs on a thread of it's own. We are in the 2nd inning of our massive slide to the global mean.

And you fools still bow to the elites that got us here!

I agree with a previous poster - we need Ron Paul in the oval office. Otherwise, a violent revolution (overthrow of the elites) is the only solution that remains. It's not Democrat vs Repulican anymore, it's populists vs elitists folks. You decide.

You still believe education is the answer? Go ask GW about that...I mean the guy was groomed from birth for governance and middle east policy....

Andrew Hac said...

We need to invade Vietnam one more time to make this economy go right.

Heeeee, heeeee, heeeee.

And don't forget to cut the interest rate by a whole god-damn point to prop up the economy.

Remember people: Purchasing and owning a house is a privilege, a highly selective privilege, not a right. Joe Bob + Jane Bettycrock do not have the privilege to own or purchase a house if they are poor. Being poor in the land of Americano is like being a gazelle in the Africa Sahara desert. Gazelle gets eaten by lion, leopard, cheetah, not the other way around.

Anonymous said...

India is no longer accepting dollars for entry fees to their historical sites.

lifeconsultnt@gmail.com said...

Freddie Mac & Fannie has also the big parking garage for known politico buddies and obvious quotas who they wanted to give the big bucks! Also, crooked the vehicles.

I want to see all the scoundrels who were key decision makers & operatives in this latest financial debacle they have caused to this country put in jail, hefty percentage of their assets taken as resitution, and their citizenship taken away and/or......

Anonymous said...

Supermodels and rappers saying no more dollars.
------

Boy when the dumbest rungs of society know what is going on how can the PTB keep lying....?

alex said...

You are so over dramatic keith...PLEASE, do you really think there is anything BB or GWB can do?

This was set in motion before them and there is nothing they can do. Just like Clinton, he didn't peak the economy it was set in motion before him too....

Charles said...

Looking for anybody's opinion...

While I believe at some point the Fed is gonna go Volcker (they'll have to at some point) I don't feel like riding the dollar on the way down. So if i go silver in the mean time should i go for an ETF or the real thing?

Anonymous said...

"Now, all we have are a bunch of green-colored pieces of paper that are only PARTIALLY backed by gold."

Gawd, YOU are the product of the dumbing down of America...

The US dollar isnt backed by ANYTHING but the full faith and (dis)credit of the US government.

Most Americans are dumber than dirt, only when they wake up BROKE will they then realize the error of their stupidity.


Good riddence...

Anonymous said...


How can my hose be deflating at the same time the dollar is in collapse?


That's easy. RE prices are collapsing faster than the dollar. Enjoy the ride down!

Anonymous said...


A topic I expect to show up soon is what this means to US military involvement overseas.

The US military bases buy much of what they need to keep them running(food, water, energy) from the country they're placed in.

I imagine next year they'll ALL need greatly increased budgets to keep them up and running.



There's a very simple solution to that problem. Bring them home. We don't need to protect Germany anymore. The USSR no longer exists. We don't need to protect Japanand and S Korea anymore. They can protect themselves. We don't need bases in 43 different countries. The Cold War is over. WWII is over. The Korean War is over. It's time to rein in our empire before we collapse.

Budvar said...

"The US military bases buy much of what they need to keep them running(food, water, energy) from the country they're placed in."


Things have changed then, because USAF bases here in UK (with the exception of fresh milk) shipped in everything and I mean everything from stateside.

Anonymous said...

Krugman predicted a recession every year from 2002 to 2007. He's not an idiot but a very poor economist.

Anonymous said...

Most Americans are dumber than dirt, only when they wake up BROKE will they then realize the error of their stupidity.


Good riddence...

November 20, 2007 6:38 PM


==============

You mean riddAnce Prof. Moron?

Budvar said...

"So if i go silver in the mean time should i go for an ETF or the real thing?"

OK, perhaps this analogy may help.
You can either buy real 10oz bars of silver from me, or you can pay me for 10oz silver bars that you never see, have no record of any serial numbers and can never collect at a later date (unless you buy 5million oz, then you can) I just give you a note that says "I promise (no no I really do honest) to pay at some date in the future the value of 10oz of silver in $US. You also have no idea as to whether I bought silver with your money to back the note up with or used it to go out on the piss with the lads.

Which example would you feel most comfortable investing your money in?

Andrew from Russia said...

What's the news exactly? Isn't it a bit late to wake up after a 5-year decline? In the process I even managed to enrich my vocabulary by following the press on USD - at first they described it as "sliding" from its 2002 highs. Then it "tanked", "tumbled" as the FRS cut rates, then "plummeted" and, more recently, "nose-dived". When there are no more synonyms left for this word game other than "mayday, mayday", this will mean we are finally at the bottom!

As a side-note, even the Moscow real estate bubble has been revalued in Euros. At 2800 EUR per square meter it LOOKS stable! Bubbles are about psychology, right?

Anonymous said...

.


American products look pretty good to foreign markets right about now!

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Nimesh Patel said...

Financial alarmists (i.e. the Doom and Gloom Crowd) keep saying that the Dollar is declining. So what? What other credible world currency is there in the marketplace? NONE. The Dollar will once again reign supreme and people from around the world will continue to directly invest in the U.S.A. because it has the world's most highly developed economy.

Anonymous said...

Budvar said...
"The US military bases buy much of what they need to keep them running(food, water, energy) from the country they're placed in."


Things have changed then, because USAF bases here in UK (with the exception of fresh milk) shipped in everything and I mean everything from stateside.

November 20, 2007 8:12 PM
-------
Thats due to the mad cow scare & terrorits targeting of bases in covert ways. Overseas bases still generate revenue for the countries they reside in, but we do need to bring all the troops home and I means ALL of the troops.

Anonymous said...

AMERICA ANARCHY!!!

Get your AMMO, FOOD, AND GOLD CHIPS SUPPLIES ready folks. Its going to be one hell of a ride down to third world class status.

borkafatty said...

Good riddence...

November 20, 2007 6:38 PM


==============

You mean riddAnce Prof. Moron?

-----------------

Prof. Moron. .... Classic!! :)

Anonymous said...

buy as much silver as you can

Anonymous said...

"Yes, most Princeton professors are idiots, I understand."

- No, you don't.

lifeconsultnt said...

postscript

Please excuse a few editing errors
as am ticked off at what these scoundrels have done and think there must be harsh consequences for them.

Anonymous said...

the fed is now destroying our currency, first the dot.com bubble, then housing bubble, now massive bank losses and the fed cuts rates to save the banks from all their bad debt, cut rates and kill the dollar...it is just time and there will be a dollar rout! and, the fed will be the cause!

Anonymous said...

.


Gold confiscation???


Just how in the Hell do they know I have any?

No paperwork was involved, under 10K

One time I signed a reciept, with no verification of identity, so I signed some random B.S. name.

And even if they know I bought it, how do they know that I still have it, and didn't pay a gambling debt with it?


F'em


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