[dirty]

Thursday March 13, 3:04 pm ET
By Alan Clendenning, AP Business Writer From the Bowery to the Taj Mahal, Falling Greenback Loses Clout As King of Currencies SAO PAULO, Brazil (AP) -- Antique store owners in lower Manhattan, ticket vendors at India's Taj Mahal and Brazilian business executives heading to China all have one thing in common these days: They don't want U.S. dollars.Hit by a free fall with no end in sight, the once mighty U.S. dollar is no longer just crashing on currency markets and making life more expensive for American tourists and business people abroad; its clout is evaporating worldwide as foreign businesses and individuals turn to other currencies.
Experts say the bleak U.S. economic forecast means it will take years for the greenback to recover its value and prestige.
Negative dollar sentiment is growing in nations where the dollar was historically accepted as equal or better than local currency -- and dollar aversion is even extending to some quarters in the United States.
At the Taj Mahal, dollars were always legal tender, alongside rupees, for entry into the palace. But because of the falling value of the dollar, the government implemented a rupees-only policy a month ago. Indian merchants catering to tourists have also turned bearish on the dollar.
"Gone are the days when we used to run after dollars, holding onto them for rainy days," said Vijay Narain, a tour operator in the city of Agra where the Taj Mahal is located. "Now we prefer the euro. It gives us more riches."
In Bolivia, billboards feature George Washington's image on a $1 bill alongside a bright pink 500 euro note, encouraging savers to turn to the euro to tuck away money earned abroad or sent home in remittances.
"If the dollar's going down ... save it in Euros!!!" say the signs popping up around La Paz for Bolivia's Banco Bisa.
And in neighboring Brazil, the Confidence Cambio money-changing service was the first to start offering yuan so travelers to China no longer have to change the money into dollars first. The service is already a hit because Brazil does big business with China, and lots of Brazilians are heading to the Olympics this summer.
"Now we tell people not to take dollars when they go abroad, it's better to change it directly to the local currency," said Fabio Agostinho, one of the firm's managing partners. "If people leave here with dollars and go abroad, they lose when they exchange them. It's the same thing whether they're heading to China, Europe or even Argentina."
In Manhattan's Bowery district, Billy LeRoy, the owner of Billy's Antiques & Props, prefers payment in euros so he can stockpile the currency for his annual antique buying trip to Paris.
"Whip out dollars at the French flea market now, and they'll shoo you away," he said at his store near apartment buildings where Europeans are snapping up units because they've become dirt cheap. "Before it was like the second coming of Christ, but now they don't want it or if they do take dollars, they're going to take their pound of flesh."
The dollar has steadily eroded in value against the euro and other currencies since 2002 as U.S. budget and trade deficits ballooned, but fears of an American recession and credit crisis have sent the dollar to stunning lows amid predictions the slump will continue for a long time.
The euro traded for a record $1.5625 before declining to $1.5586 Thursday while the dollar dropped below 100 Japanese yen for the first time since November 1995. It traded as low as 99.75 yen before recovering some ground to 101.68 yen. The dollar also recently hit a 10-year low against the Chilean peso, and fell to its lowest level against Brazil's real since the nation floated its currency in 1999.
While low dollar cycles have come and gone for decades, experts caution that it's now much more difficult to predict when this one will end because the euro didn't exist as competition for the dollar before.
During previous U.S. economic downturns, big foreign funds typically snapped up U.S. treasuries, helping to shore up the dollar to a certain degree. But the euro and currencies from other nations are now seen as legitimate options, and interest rates are higher outside the United States -- meaning the funds can get better returns on investments elsewhere.
"You have the U.S. still holding this trade deficit, but now you have the possibility of a U.S. led recession, and you have a weakening currency. So it's a very dark outlook for the dollar," said Gareth Sylvester, senior currency strategist with the British firm HIFX Inc., which executed $40 billion in currency trades last year.
Nations that were once seen as incredibly risky for investments -- such as Brazil -- are now seen as good long-term bets. And countries such as China and Russia, with burgeoning coffers of money to invest abroad, are thought to be shifting some of their reserves or diversifying fresh income to destinations and currencies outside the United States.
It used to be important for most countries "to accumulate dollars as a precautionary element against rainy days, but the accumulation of reserves has become so large in most emerging market countries that the balance is way beyond what's needed for precautionary reasons," said Eliot Kalter, a fellow at Tufts University's Fletcher School of Law and Diplomacy and a former International Monetary Fund official.
While most experts believe the dollar will eventually regain strength, no one is willing to predict when that will happen.
"I think the factors that are affecting the weakness of the dollar will be reversed, but no time soon," Kalter said.
The problem right now, is that "people just don't want to be holding U.S dollars and U.S.-based equities," Sylvester added. "If you are an investor with a million dollars to invest, you look for the highest yield -- you're looking at South Africa, Australia, New Zealand."
And it's not only the big time investors that are looking for other options.
In Peru, where savings in U.S. dollars were long a popular hedge against inflation, many citizens are closing dollar accounts in favor of Peruvian soles.
At the same time, businesses like supermarkets, movie theaters and cable TV companies that used to accept dollars are now demanding soles.
Edwin Figueroa, a 29-year-old systems engineer, switched his checking account from dollars to soles seven months ago as the dollar's decline started worrying him. He doesn't think he'll be going back anytime soon.
The Peruvian sol "is stable now," he said. "And maybe in a year, the dollar will even go lower."
Associated Press Writers Biswajeet Banerjee and Leslie Josephs contributed from Lucknow, India, and Lima, Peru.






Dollar's Clout Sinks Worldwide: Financial News - Yahoo! Finance

[Rxx]

For the last week i have had 6 cycling pros from the Colavita/Sutter Home team staying with me while they train here. Three from Argentina, one from Italy, and one from Cuba, and one from NY. The Italian was telling me how tough it was these days getting paid in dollars rather than Euros.

One of my cars is a 2006 Toyota Rav4 for which i paid $25,000. He told me that in Italy it would cost him 32,000 euros. It is the "large" SUV in Europe.

Argentina is a little different. There, things tend to cost more than here and so they are doing ok. I can only imagine that the cuban guy is like in disneyland every day compared to the crap his countrymen face.

BTW- Dirty-

If they get invited to ride in the Tour of Georgia, i am probably coming down there April 27. I would like to take you out for a beer (or did you quit- i cant remember) or a coke.

[dirty]

I would love to go ... The Tour is coming thru Gainesville again this year. They Finished the race here a few years ago when Lance Armstrong rode in it...

[scrimmage]

Life and Death Dollar

Coincidence $20

images from:
jurytheclown.com/print%20store.htm
essay link:
Watching the Dollar Die

Watching the Dollar Die By Paul Craig Roberts 13/03/08 "ICH " -- - I’ve been watching the dollar die all my life. I sometimes think I will outlast it. When I was a young man, gold was $35 an ounce. Today one ounce gold bullion coins, such as the Canadian Maple Leaf, cost more than $1,000. Our coinage was silver. Our dimes, quarters, and half dollars had purchasing power. Even the nickel could purchase a candy bar, ice cream cone or soft drink, and a penny could purchase bubble gum or hard candy. If a kid could collect 5 discarded soft drink bottles from a construction site, the 2 cents deposit on the returnable bottles was enough for the Saturday afternoon movie. Gasoline was 32 cents a gallon. A dollar’s worth was enough for a Saturday night date. Our silver coinage was 90% silver. People sometimes melted coins in order to make silver spoons, known as coin silver, which can still be found in antique shops. Except for the reduced silver (40%) Kennedy half dollar which continued until 1970, 1964 was the last year of America’s silver coinage. The copper penny departed in 1982. As Assistant Secretary of the Treasury, I opposed the demise of America’s last commodity money, but I couldn’t prevent the copper penny’s death. During World War II (1941-1945), nickel was diverted from coinage to war, and the US mint issued a wartime silver (35%) nickel. It is not easy to find items to purchase with today’s US coins, but the silver coins of the same face value still have purchasing power. The 10 cent piece of my youth contains $1.42 worth of silver at today’s silver price. The quarter is worth $3.55, and the half dollar contains $7.10 of silver. The silver dollar is worth 15.2 times its face value. These are just the silver values of coins that might be worth far more depending on condition and rarity. The silver in the wartime nickel is worth $1.10, which is 22 times the coin’s face value. Even the copper penny is worth 2.5 cents. When I was a young man enjoying travels in Europe, the German mark or Swiss franc traded four to one US dollar. The euro, which is today’s equivalent to the mark or franc, costs $1.55. People who haven’t accumulated much age have little idea of the corrosive power of “acceptable” inflation. Unlike gold and silver, fiat money has no intrinsic value. When money is created faster than goods and services it drives up prices, thus driving down the value of the money. If freely traded currencies are excessively printed or if inflation, budget deficits, and trade deficits drive currencies off their fixed exchange rates, prices of imports rise as the foreign exchange value of the currency falls. Today the US, heavily dependent on imports, is subject to double-barrel inflation from both domestic money creation and decline in the dollar’s foreign exchange value. The US inflation rate is about twice as high as the government’s inflation measures report. In order to hold down Social Security payments, the government changed the way it measures inflation. In the old measure, inflation measured the nominal cost of a defined standard of living. If the price of steak rose, up went the inflation rate. Today if the price of steak rises, the government assumes that people switch to hamburger. Inflation doesn’t go up. Instead, the standard of living it measures goes down. This is just one of the many ways that the government pulls the wool over our eyes. With the dollar value of the euro rising through the roof, today a vacation in Europe is far more costly than in the past. Thanks to China, so far Americans have been sheltered from the greatest effects of the dollar’s declining value. Our greatest trade deficit is with China. The prices of the goods from China have not risen, because China keeps its currency pegged to the dollar. As the dollar goes down, China’s currency goes with it, thus holding down price rises. The resignation of Admiral William Fallon as US military commander in the Middle East probably signals a Bush Regime attack on Iran. Fallon said that there would be no US attack on Iran on his watch. As there was no reason for Fallon to resign, it is not farfetched to conclude that Bush has removed an obstacle to war with Iran. The US is already over stretched both militarily and economically. An attack on Iran is likely to be the straw that breaks the camel’s back. Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand.

[Flamingo kid]

I guess its time to trade in all your american dollars for euro dollars or some other country that isn't tanking?

[mr merlin]

I saw a report that the dollar is at its lowest point in 12 years, hmmm,I wonder why it was so low during the clinton administration? Was it because he trashed the economy and ruined america? Or maybe its because these things run in cycles?

[scrimmage]

Originally Posted by mr merlin

I saw a report that the dollar is at its lowest point in 12 years, hmmm,I wonder why it was so low during the clinton administration? Was it because he trashed the economy and ruined america? Or maybe its because these things run in cycles?

mr merlin,
That report must be a figment of your imagination,since the Euro was only introduced in 1999,the last year of the Clinton presidency:

The euro was introduced to world financial markets as an accounting currency in 1999 and launched as physical coins and banknotes on 1 January 2002. It replaced the former European Currency Unit (ECU) at a ratio of 1:1.
source:
Euro - Wikipedia, the free encyclopedia


Meanwhile here's an artist's conception of new US currency that might be needed in the near future to buy a loaf of bread:

[mr merlin]

Check the dollar vs. the yen and other major currencies mboy.

[scrimmage]

Originally Posted by mr merlin

I saw a report that the dollar is at its lowest point in 12 years, hmmm,I wonder why it was so low during the clinton administration? Was it because he trashed the economy and ruined america? Or maybe its because these things run in cycles?

Originally Posted by mr merlin

Check the dollar vs. the yen and other major currencies mboy.

When did the Clinton administration trash the economy and ruin America;are you projecting the Bush admisitration's pushing America into the abyss on Clinton?
You answer your own question with speculation not facts.

There's a reason the dollar was low vs the yen 12 years ago,and it had to do with interest rate differentials which effected the "carry trade"[borrowing at low rates in Japan to invest in higher interest vehicles in the US].
The current 2008 dollar devaluation is different,than what happened in 1996,and much more ominous.

Here's the back story,originally published June 29th,1998
source:
http://www.geocities.com/Eureka/Conc...b/epn-ib01.htm

The U.S. real interest rate and the real yen-dollar exchange rate are closely correlated (see figure).2 As the figure shows, the dollar tends to rise when real U.S. interest rates are high and fall when real interest rates are low. This relationship results because high interest rates attract speculative capital into the U.S. from Japan and elsewhere, while low interest rates reduce or eliminate these capital inflows.

Thus, a reduction in the U.S. interest rate should lead to a decline in the value of the dollar relative to other currencies, including the yen. An increase in the yen, relative to the dollar, will help Japan stabilize its economy and restore confidence in its financial system. A higher yen and lower dollar will also help the United States reduce the job losses likely to result from increased trade deficits in the next 12 to 18 months.

The correlation between exchange rates and interest rates is not perfect, since many other factors influence exchange rates. In particular, the yen-dollar exchange rate tends to "overshoot," and it also responds to changes in real interest rates with a lag of up to two years. The turning points have often been marked by intervention, most recently in 1995 when the U.S. and Japan intervened to prop up the dollar after it failed to respond to a sharp rise in U.S. interest rates in 1994. One important aspect of this successful intervention is that it occurred after a fundamental change in economic policies (interest rates were increased). Thus, successful intervention complemented a shift in monetary policy.

The rise in the real U.S. interest rate since 1996 has been caused by falling inflation rates, not by any explicit change in Fed policy. The nominal federal funds rate has essentially been held constant, but the rate of inflation has fallen from 3.0% in 1996 to 1.7% in May 1998 (on an annual basis). As a result, real short-term interest rates have increased by almost 1.5 percentage points. This increase has contributed to the yen’s slide by making U.S. financial assets more attractive to investors from Japan and other countries and stimulating demand for the dollar. Thus, the U.S. must share part of the blame for the decline of the yen.

[mr merlin]

I agree with you scrimmage, clinton wasnt to blame for the dollar 12 years ago and bush is not to blame now - dont you get it man? The fed can do two things, they can cut rates to stimulate the economy internally, or they can not cut(or raise) rates and help the dollar - for the time being they have chosen to cut interest rates, its not bush, Iraq, the deficit, or any of the rest of the nonsense that is usually spewed. good day to you.

[gopherbob]

what date do you think the dollar will trade one to one with the mexican peso ?

[diggin'4gold]

Originally Posted by mr merlin

I agree with you scrimmage, clinton wasnt to blame for the dollar 12 years ago and bush is not to blame now - dont you get it man? The fed can do two things, they can cut rates to stimulate the economy internally, or they can not cut(or raise) rates and help the dollar - for the time being they have chosen to cut interest rates, its not bush, Iraq, the deficit, or any of the rest of the nonsense that is usually spewed. good day to you.

So let me get this straight, you don't think bush, Iraq, the deficit, or any of the rest of the nonsense that is usually spewed has any influence on the decisions made by the FED?

[WildBill]

Originally Posted by gopherbob

what date do you think the dollar will trade one to one with the mexican peso ?

Uh never. How's that?

[WildBill]

People in China are convinced the dollar will eventually recover and are sending out money as fast as they are allowed to buy up assets while they can at cheap prices. Now compare that to the economists in the US who say China's currency is wildly out of whack. I heard a lot of these comments in a week of meetings in HK and Macau where they are pegged to the dollar. They said Chinese people, if they really believed the dollar was going to collapse, wouldn't be buying shit up in their SARs like crazy now would they? I mean if you just knew the yuan would be say 5 to 1 instead of the current 7.1 to 1, why not just wait for it to happen before snapping up HK and Macau real estate and businesses??? Seems to me we are all getting into a bit of a frenzy over this because the media just loves to spin tales. People in China realize the sky isn't falling and that currencies go in cycles. That is the reason why Chinese money is flowing into pegged US dollar currency assets and why those under the pegs aren't really considering changing the pegged rates.

[mr merlin]

Originally Posted by diggin'4gold

So let me get this straight, you don't think bush, Iraq, the deficit, or any of the rest of the nonsense that is usually spewed has any influence on the decisions made by the FED?

pretty much - bush has very little influence, Iraq has nothing to do with either the current recession or the dollar, The deficit will only grow as the current economic difficulties continue.

[scrimmage]

Originally Posted by WildBill

People in China are convinced the dollar will eventually recover and are sending out money as fast as they are allowed to buy up assets while they can at cheap prices. Now compare that to the economists in the US who say China's currency is wildly out of whack. I heard a lot of these comments in a week of meetings in HK and Macau where they are pegged to the dollar. They said Chinese people, if they really believed the dollar was going to collapse, wouldn't be buying shit up in their SARs like crazy now would they? I mean if you just knew the yuan would be say 5 to 1 instead of the current 7.1 to 1, why not just wait for it to happen before snapping up HK and Macau real estate and businesses??? Seems to me we are all getting into a bit of a frenzy over this because the media just loves to spin tales. People in China realize the sky isn't falling and that currencies go in cycles. That is the reason why Chinese money is flowing into pegged US dollar currency assets and why those under the pegs aren't really considering changing the pegged rates.

Why wouldn't the Chinese buy assets since they have so many US dollars on hand,it's better to have something tangible than as George Bush might say a "goddamn piece of paper".
Spend em while there's still some value,there'll be plenty more where they came from.Here's some countries moving away from the dollar peg:


Gulf States Creep Away From Plunging Dollar
Gulf States are set to follow former Fed chairman Alan Greenspan's advice and dump their dollar peg following a benchmark meeting tomorrow[3/19/2008], with analysts predicting a slow but deliberate creep away from the greenback rather than an imminent decoupling, a move that could have devastating consequences for the American economy.
full article:
Gulf States Creep Away From Plunging Dollar



And what're you gonna do with dollars if nobody wants them,like in this European city:

Dollars tough to sell on streets of Amsterdam Mon Mar 17, 2008
AMSTERDAM (Reuters) - The U.S. dollar's value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local money while on vacation in the Netherlands.
"Our dollar is worth maybe zero over here," said Mary Kelly, an American tourist from Indianapolis, Indiana, in front of the Anne Frank house. "It's hard to find a place to exchange. We have to go downtown, to the central station or post office."
That's because the smaller currency exchanges -- despite buy/sell spreads that make it easier for them to make money by exchanging small amounts of currency -- don't want to be caught holding dollars that could be worth less by the time they can sell them.
The dollar hovered near record lows on Monday, with one euro worth around $1.58 versus $1.47 a month ago.
(Reporting by Svebor Kranjc, writing by Reed Stevenson)
link:
Dollars tough to sell on streets of Amsterdam | Reuters



Let's hope this isn't the dollars ultimate fate:

[WildBill]

"Small currency exchangers" don't constitute "nobody" you know? Every major bank has millions of dollars coming in and out every day in Amsterdam.

Are the dollar changers going to be howling if the ECB suddenly starts intervening in the market and pushes down the value of their Euro holdings relative to dollars?

[scrimmage]

Originally Posted by WildBill

"Small currency exchangers" don't constitute "nobody" you know? Every major bank has millions of dollars coming in and out every day in Amsterdam.

Are the dollar changers going to be howling if the ECB suddenly starts intervening in the market and pushes down the value of their Euro holdings relative to dollars?

The ECB[European Central Bank]can only do so much intervening as the dollars decline is a structural problem,not a brief anomaly.Intervention would be as effective long term as using an umbrella to hold back a tidal wave.

For 2008 assuming a growth rate of 2,7% in GDP[not going to happen],the official budget deficit will be approx.410 billion[that doesn't include supplemental items like appropriations for the wars in Iraq and Afghanistan],where's the money to run US government operations going to come from?Add in trade deficits, inflation from Fed added liquidity,and an enormous accrued liability of 53 trillion,and the dollar becomes an unattractive holding.
Ex Assistant Treasury Secretary Paul Craig Roberts says in his essay below "the fact of the matter is that the US is bankrupt",if that's so then the
dollar will essentially be worth peanuts.

March 18, 2008

A Bankrupt Superpower

The Collapse of American Power

By PAUL CRAIG ROBERTS
In his famous book, The Collapse of British Power (1972), Correlli Barnett reports that in the opening days of World War II Great Britain only had enough gold and foreign exchange to finance war expenditures for a few months. The British turned to the Americans to finance their ability to wage war. Barnett writes that this dependency signaled the end of British power.

From their inception, America's 21st century wars against Afghanistan and Iraq have been red ink wars financed by foreigners, principally the Chinese and Japanese, who purchase the US Treasury bonds that the US government issues to finance its red ink budgets.

The Bush administration forecasts a $410 billion federal budget deficit for this year, an indication that, as the US saving rate is approximately zero, the US is not only dependent on foreigners to finance its wars but also dependent on foreigners to finance part of the US government's domestic expenditures. Foreign borrowing is paying US government salaries--perhaps that of the President himself--or funding the expenditures of the various cabinet departments. Financially, the US is not an independent country.

The Bush administration's $410 billion deficit forecast is based on the unrealistic assumption of 2.7% GDP growth in 2008, whereas in actual fact the US economy has fallen into a recession that could be severe. There will be no 2.7% growth, and the actual
deficit will be substantially larger than $410 billion.

Just as the government's budget is in disarray, so is the US dollar which continues to decline in value in relation to other currencies. The dollar is under pressure not only from budget deficits, but also from very large trade deficits and from inflation expectations resulting from the Federal Reserve's effort to stabilize the very troubled financial system with large injections of liquidity.

A troubled currency and financial system and large budget and trade deficits do not present an attractive face to creditors. Yet Washington in its hubris seems to believe that the US can forever rely on the Chinese, Japanese and Saudis to finance America's life beyond its means. Imagine the shock when the day arrives that a US Treasury auction of new debt instruments is not fully subscribed.

The US has squandered $500 billion dollars on a war that serves no American purpose. Moreover, the $500 billion is only the out-of-pocket costs. It does not include the replacement cost of the destroyed equipment, the future costs of care for veterans, the cost of the interests on the loans that have financed the war, or the lost US GDP from diverting scarce resources to war. Experts who are not part of the government's spin machine estimate the cost of the Iraq war to be as much as $3 trillion.

The Republican candidate for President said he would be content to continue the war for 100 years. With what resources? When America's creditors consider our behavior they see total fiscal irresponsibility. They see a deluded country that acts as if it is a privilege for foreigners to lend to it, and a deluded country that believes that foreigners will continue to accumulate US debt until the end of time.

The fact of the matter is that the US is bankrupt. David M. Walker, Comptroller General of the US and head of the Government Accountability Office, in his December 17, 2007, report to the US Congress on the financial statements of the US government noted that "the federal government did not maintain effective internal control over financial reporting (including safeguarding assets) and compliance with significant laws and regulations as of September 30, 2007." In everyday language, the US government cannot pass an audit.

Moreover, the GAO report pointed out that the accrued liabilities of the federal government "totaled approximately $53 trillion as of September 30, 2007." No funds have been set aside against this mind boggling liability.
Just so the reader understands, $53 trillion is $53,000 billion.
Frustrated by speaking to deaf ears, Walker recently resigned as head of the Government Accountability Office.

As of March 17, 2008, one Swiss franc is worth more than $1 dollar. In 1970, the exchange rate was 4.2 Swiss francs to the dollar. In 1970, $1 purchased 360 Japanese yen. Today $1 dollar purchases less than 100 yen.

If you were a creditor, would you want to hold debt in a currency that has such a poor record against the currency of a small island country that was nuked and defeated in WW II, or against a small landlocked European country that clings to its independence and is not a member of the EU?

Would you want to hold the debt of a country whose imports exceed its industrial production? According to the latest US statistics as reported in the February 28 issue of Manufacturing and Technology News, in 2007 imports were 14 percent of US GDP and US manufacturing comprised 12% of US GDP. A country whose imports exceed its industrial production cannot close its trade deficit by exporting more.

The dollar has even collapsed in value against the euro, the currency of a make-believe country that does not exist: the European Union. France, Germany, Italy, England and the other members of the EU still exist as sovereign nations. England even retains its own currency. Yet the euro hits new highs daily against the dollar.

Noam Chomsky recently wrote that America thinks that it owns the world. That is definitely the view of the neoconized Bush administration. But the fact of the matter is that the US owes the world. The US "superpower" cannot even finance its own domestic operations, much less its gratuitous wars except via the kindness of foreigners to lend it money that cannot be repaid.

The US will never repay the loans. The American economy has been devastated by offshoring, by foreign competition, and by the importation of foreigners on work visas, while it holds to a free trade ideology that benefits corporate fat cats and shareholders at the expense of American labor. The dollar is failing in its role as reserve currency and will soon be abandoned.
When the dollar ceases to be the reserve currency, the US will no longer be able to pay its bills by borrowing more from foreigners.

I sometimes wonder if the bankrupt "superpower" will be able to scrape together the resources to bring home the troops stationed in its hundreds of bases overseas, or whether they will just be abandoned.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com
link:
Paul Craig Roberts: The Collapse of American Power

[WildBill]

Whatever, the US has a smaller deficit as a % of GDP than most of the major EU powers. So tell me how we are "bankrupt"? This is total bullshit, but hey everyone is entitled to an opinion. My opinion is that currencies and commodities are the crack cocaine of choice for speculators right now and never has it been better in terms of leverage opportunities. Credit has dried up for all sorts of normal sources like business and home lending, but the spigot is wide open for the speculators in commodities. It too will crash painfully, but most of us will benefit from it so we won't be crying over cheaper oil or metals and at first it will seem great to have a stronger dollar.

[gopherbob]

Originally Posted by WildBill

Uh never. How's that?

thats what i thought about the canadian dollar a few years ago.