The Great Dollar Crash of ‘07

[Pharaoh]

http://www.ichblog.eu:80/content/view/405/2/


02/06/07 "ICHBlog" -- - Every time a US Dollar is traded, a check is issued on an account that is overdrawn by $8.6 trillion. (That is the present size of the national debt) It is, without question, the biggest swindle in history. Flimsy sheets of faded-green scrip are eagerly exchanged for costly goods and services without any regard for the real value of the currency.

And, the real value of the currency is absolutely nothing!

How is it that this scam persists when people appear to be aware of the massive debt and deficits which underwrite the dollar? Do they still believe in that puerile fairy tale about “the full faith and credit” of the United States backing up every greenback? Or are they pacified by the wizened graybeards, like Alan Greenspan and Hank Paulson, who soothingly bray about the “strong dollar policy”?

What gibberish.

In truth, the dollar rests on the crumbling foundation of consumerism and oil. The American consumer’s gluttonous appetite for spending has kept the greenback flying high for decades. Economists marvel at America’s lust for electronic gadgetry, the latest fashions, and useless knick-knacks. They call our profligate spending “the engine for global growth”; and indeed it is. No other country in the world is nearly as addicted to binge-spending as the US consumer. As long as he can beg, borrow or steal his way into the shopping mall; the orgy of spending is bound to continue. (Consumer spending is 70% of GDP)

[NMDemDist2]

1. 70% of GDP???

holy crap!

[ProfessorGAC]

8. It's Been At Or Near That For 40 Years

Just as a 101 reminder:

GDP = Consumption + Gov't Spending + Transfer Payments (SS, Welfare, Disability, etc.) + Net Exports

Aside from net exports, which of those other factors would you think should be higher. For me, consumption as the lion's share is a good thing, since it means PEOPLE HAVE MONEY TO SPEND! In the USSR, that number was under 20%. That meant the gov't had all the money! Not a good thing.

This screed is a bit over the top. I have published papers in economics and econometric modeling for more than two decades. I don't know one economist who "marvels" at our interest in gadgets and fashion. And i know a few hundred!

This is exactly how a semi-regulated capitalistic system is supposed to work. Otherwise it trends toward statism.

The fueling of the economy with debt is a complete different, albeit extremely important topic. The idea that somehow it would be better if we had lower consumption, which is what is in this piece, both explicitly and implicitly, is falacious.

The Professor

[NMDemDist2]

9. thanks Prof! i always appreciate your explainations in this topic n/t

[bicentennial_baby]

10. You should give a weekly GD Econ lesson

This Econ undegrad would really appreciate it :)

[bling bling]

13. Seconded.

And I would add that I would greatly appreciate if ProfGAC or any other scholar in the economic/financial industry would ALWAYS add their .02 to any threads regarding financial matters. I have no training, skills, or experience on these topics and have on more than one occassion gone into a mini-panic-attack over alarming headlines such as "Stock market crash imminent, save yourselves: buy GOLD" or "Dollar losing all value, invest in the Euro NOW!"

Fortunately I don't look to this site for my financial advice, but its hard not to get a little freaked out when you see see frantic threads about the country's economic well-being. Not this one, necessarily, but I've needlessly lost sleep over plenty of them in the past.

[pretzel4gore]

2. we must keep junyer!

omg! think what's gonna happen after junyer is removed from the national stage? how many $trillions have the busheviks printed? how much has the Plunge Protection Team spent keeping the dow jones up, so junyer bush continue to look good (not to mention letting the gopigs rifle the till)?
they lied the usa into a war against a defenseless nation. that was because they seized power in 2k, illegally, and needed to distract from that achievement by a new perle harbour!...well, by sitting and watching 911 unfold. AND 911 necessitated the rest, esp. the iraq war....with all this in mind, imagine what the real state of affairs is!
dubia bush in '08! (screw the 'roosevelt inpired' ammendment!)

[Pharaoh]

3. Oh Yeah....

We're probably pretty fucked..............

But I'll bet you'll be able to get a good deal on a Hummer! :crazy:

[sodenoue]

4. actually

there is a tax incentive wherein you can write off 25k in one year for a vehicle that is over 6,000 lbs and used 50% or more for business.

The incentives for driving a hybrid is around $1000 until april, then only $500 until it ends at the end of '07.

But a used h2 can be free! USA #1

[Pharaoh]

5. actually quite amazing is'nt it?

:wow: :wow: :wow:

[newyawker99]

7. Hi sodenoue!!

Welcome to DU!! :toast:

[pretzel4gore]

6. i'm old and tired out, but

since reagan was crowned in 1980 it has been a steady fall....the usa has been massively subsidised by poor countries for a long long time, but today we still spend $1.6 billion every goddam day on 'defense' when we are clearly our own worst enemy...what i don't see is that family men, who are hostages to fortune just by having offspring, yet sat back and swallowed this 800 pound gorilla whole, as if it was a lozenge or something (i have no kids) yet i've seen this coming for 27 years!

[tritsofme]

11. How far do I have to read this

until the writer starts extolling the virtues of putting all your money in gold?

The goldbugs are getting stale.

[NewJeffCT]

12. A lot of countries have far worse debt to GDP ratios

Including Japan and several in western Europe...

[EstoniaKat]

14. I don't think many have noticed ...

that this site is out of the EU.

More continental anti-Americanism, I'm afraid from my "super-state" brethren.

If there's a currency that is going to collapse in the near-term, it will be the Euro.

[pretzel4gore]

15. but our economy is run by criminals

surely that counts for something? the EU simply isn't run by criminals