House of Paine

dollar slide ---run coming?

this is the temp site 
for 

alias paine and abel 

so important bulletins 
get POSTED up
 in a timely fashion 


HERE'S A "DO DO"
SCARE-PUZZLE -MUZZLE 
    PIECE FROM THE "RESPECTED"
                       NYT 


" WASHINGTON, Nov. 15 -
 It sounds eerily like 
the worst economic nightmare 
for President Bush's second term.

Bogged down in a costly war 
that shows no sign of ending,
 the United States faces 
a gaping budget deficit
 and ballooning foreign indebtedness. 
The dollar plunges against 
other major currencies, 
while turmoil in the Middle East
 sends oil prices soaring. 
The rest of the decade 
is plagued by rising inflation,
 increased joblessness 
and sky-high interest rates.

 
 
 
But the president under fire 
was Richard M. Nixon 
- not George W. Bush.
 The war was in Vietnam,
 not Iraq. 
And the dollar crash
 was in 1973 rather than 2005.

Could it happen again? 

----- NO 
BECAUSE THE PARALLEL
 SUCKS --------

   


With the dollar down 
more than 40 percent
 against the euro since 2002, 
and hitting new lows
since Mr. Bush's re-election,

 economists are debating
 whether America's foreign indebtedness 
could lead to a collapse in the dollar 
and a global financial crisis.
------- LOVE THE SCARE PREMISE ------------

The United States 
is spending nearly $600 billion 
more a year than it produces
almost 6 percent 
of its annual
     gross domestic product.


 Much of that spending 
has been financed 
by Asian governments, 
which bought 
more than $1 trillion 
in Treasury securities 
and other dollar assets 
in the last two years 
to help keep the dollar strong 
against Asian currencies. 

Many analysts expect 
the financing gap to widen 
and the dollar to decline further. 

But there are at least 
three schools of thought 
on whether a dollar collapse 
is likely 
and, if it happens,
               what it would mean.

One group,
 which includes 
the Federal Reserve chairman,
 Alan Greenspan,
 contends that global financial markets 
are awash in so much money 
that the United States 
can borrow much more
 than seemed possible 20 years ago



The dollar may well decline
(FURTHER)  in value,
 according to this view
 but the decline would be gradual
 and would help reduce 
American trade imbalances 
by making exports cheaper
 and imports more expensive

--- ie plaza accords II
THIS IS THE GREEN MAN
 KOOLIN THE WATERS
 OF MAIN STREET BOOBOVIA 
FOR BUSH INC  -----------------

The Bush administration 
goes one step further, 
arguing that America's
 huge foreign debt 
simply reflects the eagerness 
of others to invest here.
------ NON SENSE IF SO 
THE STOCK MARKET WOULD REFLECT IT ---------

"Productivity has been remarkably high
 in the last few years," John Taylor
 deputy secretary of the Treasury
 said at a recent conference 

------ TRUE AND BEST PROFITS 
HAVE GRABBED ALMOST
 THE WHOLE OF IT 
BUT LATE 90'S STOCK PRICE
RUN UPS
LEFT PRICES
SO POST BURST BUBBLE BRIGHT
 HIGH EARNINGS  
HAVE  ONLY ALLOWED 
A BENIGN STAGNATION IN ASSET VALUES
 WHERE WORSE YIELDS
 MIGHT HAVE MEANT CHRONIC SLUMPING -------
 
"Foreigners want to invest 
in the United States. 
That's what that gap illustrates"

------- THIS IS A GARBLE BY AN IDIOT
OF PROPAGANDA BY A SHARP GUY 
THE FACT IZ THE CENTRAL BANKS 
ARE DOING THE HEAVY LIFTING HERE-----------

A second school of thought
 holds that foreign governments 
like China and Japan 
will continue to finance
 American borrowing
 and keep the dollar strong
 because they are determined 
to sustain their exports and create jobs.
--- VOILA HEAVY LIFTING
US PRODUCTIVITY IE PROFIT RATE SPIKES 
BUT ASSET PRICE FLATNESS ARE IRRELEVANT
TO THE BANKS USING CITZEN TAX PAYERS CREDIT 
TO BUY UP DOLLARS AND TURN EM INTO US TREASURY BONDS AND NOTES -------

But a third school,
 which includes officials 
at the International Monetary Fund, 
worries about a collapse
 in the dollar
 that would send shock waves 
through the global economy.
-----------  COLLAPSE --------------

That group argues 
that the dollar needs 
to depreciate another 20 percent

------- ALL AGREE HERE -------------

 against the other major currencies 


but warns about a run on the dollar 
that could reduce its value 
by 40 percent

----I.E .
A  DOUBLING 
OF THE DOLLARS 40% DECLINE PATH 
JUST COVERED 
IN THE LAST 
130 WEEKS OF TRADING

ONLY 
THIS TIME  
COVERING THE SAME DISTANCE 
IN SAY  2 WEEKS OF TRADING 

YAOOOOOWEEEE 
---------------------

A collapse of that size 
would severely affect Europe and Asia, 
which have relied heavily on exports 
to the United States
 for their growth.

----- FALL FAST AND FAR ENOUGH 
AND " HOUSTON WE GOT A PROBLEM "-------- 

A steep drop in the dollar 
could lead to higher interest rates
 for the federal government 
and American private borrowers
----- READ HERE MORTGAGE RATES -----------------

 as foreign investors 
demanded higher returns 
to compensate for higher risk.

------ NONSENSE THE EURO-NIP-CHINK 
       CENTRAL BANKERS 
WOULD HAVE TO WANT THIS TO HAPPEN----------

 And it could expose hidden weaknesses
 among financial institutions 
and hedge funds caught unprepared.
------ALL TOO TRUE
  UNDER THIS SEA OF DOLLARS
 LIES A WONDERLAND OF  BURRIED SKELETONS -----------------

"There is a school of thought 
that the U.S. can keep borrowing forever," 
said Kenneth S. Rogoff,
 professor of economics at Harvard University 
and a former chief economist at the I.M.F. 

---- THIS ASS IS RIGHT UP THERE WITH GREENY
 A SUPER ASS WIPER
UNDER  EXCLUSIVE CONTRACT
TO  WALL STREET  QUEENS ---------

"But if you add up 
all the excess saving 
being thrown out by the surplus countries,
 from China to Germany, 
the United States is soaking up
 three-quarters of it right now."
------- 


SHIT THERE'S ANOTHER 200 BILLION OUT THERE
GRAB IT UNC GRAB IT 

GLOBAL EXCESS SAVING 
ARE JUST 
 THE HOB GOBLIN REFLECTION-PROJECTION 
OF UNDER-UTILIZED PRODUCTIVE CAPACITY

WHEN UNCLE BORROWS IT TO COVER HIS PURCHASES

               HE'S JUST  KEYNES-ING A GLOBAL
ECONOMY THAT NEEDS KEYNES-ING 
SO  
IN FACT BY ALL EVIDENCE 
OF SLACK NEARLY EVERYWHERE BUT CHINA
AND PROLLY THERE TOO

600 BILLS AINT NEAR ENOUGH
TAKE IT ALL UNCLE 
TAKE 800 NO TAKE A TRILLION
THATS WHAT ITS FOR

PASS ON IT 
AND THAT UNUSED CAPACITY IS WASTED
LIKE ALL TIME
PRODUCTION
 OPPORTUNITY TIME LOST 
IS GONE 
CAN'T MAKE IT UP 
 NEXT YEAR 

SO 
WHY NOT TRY 
STARTING THE  FINANCING 
OF LITTLE GEORGE'S 
 INDIVIDUAL RETIREMENT ACCOUNTS ---------


For Mr. Rogoff 
and several other economists,
 the question is not 
whether the dollar declines 
- but how fast and how far 
the fall turns out to be.

-----YOU WROTE THIS ALREADY
 POMPOUS NONSENSE REPEAT REPEAT REPEAT ------------

The United States current account deficit,
 which encompasses annual trade
 as well as the balance of financial flows, 
has gone from zero in 1990
 to nearly $600 billion this year.
 
The United States' accumulated debt
 to foreign investors
 is $2.6 trillion,
 or 23 percent 
of the annual output of the economy.

--- CRITICAL LEAVE OUT
WHAT PART IS HELD 
BY FOREIGN CENTRAL BANKS-------


But where foreign investors 
in the 1990's poured trillions of dollars 
into American stocks and corporate acquisitions, 
investment from abroad 


-----SEE YOU KNOW THE BULL 
ABOUT INVESTING
 BECAUSE OF PRODUCTIVITY 
OF OUR ECONOMY WAS BULL
SO WHY DID YOU QUOTE THAT SHARP LIAR TAYLOR---------

now comes mostly from foreign central banks
 and goes heavily to buying
 Treasury securities 
that finance the federal deficit.
--- HERE YOU NEED TO SAY WHAT THE LIMITS OF CB BORROWING ARE
WHICH YOU DON'T KNOW TO ASK EVEN ----------

Catherine Mann, 
a senior economist
 at the Institute for International Economics 
in Washington,
 said today's financing gap 
could be expected to widen. 

Part of the problem 
lies with Europe and Japan, 
which grow more slowly 
than the United States
 and import less than they export.
------ IF WE GROW FASTER
 THERE'S A TENDENCY TO IMPORT DEFICITS
OF COURSE A PURE MARKET
 IN CURRENCIES
 COULD  AUTOMATICALLY ADJUST
 EXCHANGE RATIOS
AND  CUT THIS DEFICIT OUT QUICK
BUT WITH THE OFFICIAL  CB-CARTEL'S
 SYSTEM OF   MANAGED RATES ....----------
  
        
  
 
"You have a dynamic 
that links government deficits 
to current accounts deficits 
more than has been the case before,"
 Ms. Mann said.

-------- WHAT THIS MEANS IS THE CB CARTEL 
IS LETTING OUR TRADE DEFICIT DECLINE ----------

WHERE  Mr. Rogoff predicts
 that the dollar will slide sharply 
over the next two years, 
Ms. Mann predicts 
that Asian countries will continue 
to subsidize American imbalances 
to keep their economies growing. 
A decline in the dollar 
may be likely, 
but not a 
panicky
 flight by foreign investors.

-------- ROGOFF AND MANN
     PERFECT OFF SETS
 LETS 
   MUTT AND JEFF THE PUBLIC 
INTO AN ANXIOUS PARALYSIS ------------

The American dollar 
has been through several 
ups and downs in recent decades.

 In 1973, it fell sharply
 against Japanese and European currencies

--- SETTING OFF A WILD BOUT OF INFLATION-------
 
- the major industrialized countries 
had already abandoned 
the system of fixed exchange rates 
adopted at Bretton Woods after World War II.

- WE WERE EXITING ONE REGIME
AND AS WE ENETERED THE NEW REGIME
TURBULENCE INSUED --------


The dollar rebounded strongly 
in the early and mid-1980's 
in response to 
higher American interest rates,

----- YES AKA 
   THE VOLKER TURKEY ROPE 
AKA THE REGAN REVOLUTION PART ONE ------------

 but then plunged 40 percent
 after leaders from the United States,
 Japan and Europe 
reached the so-called Plaza Accord in 1986 
to nudge the dollar back down.


------- HERES WHAT'S NOT SO OVERT TODAY ---------

 The plunge after the Plaza Accord 
caused few disruptions for Americans,
 and foreign investors
 did not demand
 higher interest rates on securities.

------ JAPAN WAS CROAKED 
BY THE BLOW BACK 
OF A YEN THAT WENT THRU THE ROOF
CAUSING ASSET PRICES ON THE HOME ISLANDS TO GO AMOK
THE NIPS IZ STILL NOT BACK IN ONE PIECE-------------

"One theory is that investors
 were simply irrational," 
said J. Bradford DeLong,
 a professor of economics
 at the University of California, Berkeley.


--- IE THEY SHOULD HAVE 
WHICH SHOWS THIS SMUG ASS 
HASN'T A FUCKING CLUE ----------
 
"Others said it was 
the result of what Charles DeGaulle called 
the 'exorbitant privilege' 
of being able to repay your debts 
in your own currency."

---- NO I GUESS HE DOESHAVE A CLUE
 BUT PREFERS TO BE SPHYNX LIKEAND LEAVE DECOYS TOO
 
IMPERIAL CURRENCY  THEORY
IS AT THE HEART OF THE MATTER
  IF THE DOLLAR BE SUCH
AND IT SUELY IS
THEN 
 NORMAL INTEREST RATE ACTIVITY
 AROUND THE DOLLA'RS MOVES
 WILL BE
SCOTCHED BY THE DEGAULLE EFFECT
WHICH ITSELF IS THE BC CARTELS 
ACCOMADATIONS OUT OF SELF INTEREST 
TO THE GLOBAL  EMPIRE'S LEGAL TENDER'S 
"FREE RIDE"    --------------------


Some economists contend 
that the United States 
can postpone its day of reckoning for years.

 Richard N. Cooper,
 a professor of economics at Harvard, 
said the global pool of savings
 was about 10 times 
the United States' appetite 
for foreign capital

------- IE 5 TRILLION IN HOT 
       READY TO FLY ANYWHERE
                     FUNDS ----------------
  
and growing fast enough 
to easily finance $500 billion a year.
------ IE AT MORE THEN 10% PER ANNUM -----------

The wild card 
is that most of the money 
is coming not from private investors 
but from foreign governments, 
led by Japan and China.

------ NO NOT A WILD CARD AT ALL
QUITE THE OPPOSITE  A CARTEL 
PLAYNIG MORE AND MORE OF THE HANDS ----------

 Rather than profits,
 their goal has been 
to stabilize exchange rates 
and keep their exports 
from becoming more expensive

------- RIGHT 
 NOW THINK THIS THRU CHAPPY --------------

Many economists contend 
that the Asian central banks 
have created an informal version 
of the Bretton Woods system
 of fixed exchange rates 
that lasted 
from shortly after World War II
 until the early 1970's.

- WOW NOT UNCLE
BUT UNCLE'S PATSY BOYZ --------

The system collapsed 
after the imbalances 
between Europe and the United States
 became impossible to reconcile. 
------ NO WE PULLED OUT THE GOLD PEG FIRST
IN 71
AND WAITED FOR THE ZIP OFF --------

Rapid growth is putting similar pressure 
on China, 
which has kept its currency, 
the yuan, 
pegged at a fixed rate 
to the dollar.

- IE CHINA AND JAPAN OF 04 
ARE THE WESTERN EUROPE AND JAPAN OF 73 ------

The growing imbalances,
 in both China and the United States,
 is one reason Mr. Rogoff 
is bracing for a jolt to the dollar 
and the American economy similar 
to the one that occurred 
in the early 1970's.
------
STILL NO REASON WHY A JOLT
OTHER THEN ITS MORE EXCITING -----------

Then, as now, the United States 
was running large budget and trade deficits.

----- ACTUALLY WAY SMALLER -------------

 Then, as now, 
the United States 
was bogged down in a war
 costing billions of dollars a year.

------ TRUE ----------
 And in 1974,
 a few months after the dollar plunged 
against the German mark and Japanese yen,
 oil prices soared.

------ OK BUT THE DOLLAR 
    WAS UNHINGED FROM GOLD WAY FIRST  -------------

"It's striking how many parallels 
there are between today and the early 1970's," 
Mr. Rogoff said. 

"The loss of the anchor 
of the dollar and fixed exchange rates
 contributed to the inflation 
we saw in the 70's. 
It was the worst period in growth 
we have had since World War II."

------- BUT ROG WE AIN'T IN A GOLD REGIME AFTER MATH
       HERE
  ITS BEEN THE SAME SYSTEM FOR 30 PLUS YEAR
THE TIME PATHS OF ADJUSTMENT
AS LONG AS THE CB CARTEL HOLDS TOGETHER
IS  DISCRETIONAL 
ARE U TELLING UZ 
 MAYBE THE CARTEL IS TOYING 
WITH  A PLANNED STAGED DOLLAR CRASH ?--------------------

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