A weak currency is good if you owe in that currency. A strong currency is good, if you own in that currency. Weak currency is not good for the long run, but it can be useful for short periods of time. Over the long run a stable currency is best' although one expects a little fluctuation. The U.S. dollr hs been falling in value for decades; it is worth about a tenth of what it was worth fifty years ago. Unfortunately, not all prices have changed at tthe same rate, and there are prices that are oonly fuve times what they were fifty years ago, and other prices that are more like fifty times. There have been major winners and losers. If one is a gambler, then owning some asset is a good idea, but if you want a little security, then the U.S. dollar is not reliable; although it is more reliable than most. That just makes me feel sorry fo the people who hold assets in other currencies.
Originally Posted by PeterL So you don't disagree with me about the Fed. I think we do. Let me just distill what I said in my previous comment since I have had time to think about it. There are positive things that come from a strong dollar and also positive things from a weak dollar. The positives from a strong dollar are that Americans can buy more of foreign products for a given amount. The positives of a weak dollar are other countries can buy more of American products for a given amount and that our debt drops in real dollars. So if we have a huge debt, the weak dollar is a plus since we are paying back our creditors with cheaper money. The question is where is the right balance between strong and weak? I don't have a clue. To be up front, I am not an economist. I have taken a couple of college economics courses and have been reading the business section off and on for twenty something years. That makes me have enough knowledge to be dangerous or intelligent sounding but wrong.
It has all been said. Case closed.
Who gives a darn
Originally Posted by Virgil First off, let's put the issue of manufacturing leaving the country to bed quickly. All that means is that there are more prosperous prospects than manufacturing for Americans to do. 200 hundred years ago 80% of the population (I'm guessing to make a point) were in farming, and then the industrial revolution came around and people went into manufacturing. Today something like 2% of the population is in farming. Manufacturing leaving is a nice political point (especially by unions, surprise surprise) but Americans have higher paying jobs than manufacturing offers. (Caveat: as long as they are educated or skilled) If manufacturing should ever be needed in this country, we could easily re-industrialize in a matter of a few years. When you say cheap money historically, I assume you're referring to this chart: http://images.huffingtonpost.com/2010-06-21-usdgold.jpg As you can see the big drop occurred when we decoupled the dollar from gold back in 1970 I think. Decoupling probably saved us in this recent recession from a great depression. Decoupling allows the Fed to float the value and therefore giving it flexibility. If the dollar today was the price of gold we either couldn't afford anything or the value of all our assessts would drop in catastrophic deflation. Dropping the value of the dollar also helps our debt because our debt in real dollar value is less. Also the lower dollar makes our exports more competative. There are too many factors that go into this drop and it's not clear if it's for the best or not. That drop is also a function of the ever increasing world trade. Now I know Conservative economists (and you know I'm a Conservative) emphasize the need for a strong dollar, but I'm not clear what the advantage is. Everyone claims they want a strong dollar, but yet they allow it to drop. I've never quite understood it. I'm coming to the conclusion it's political posturing, even if it's from my side. So you don't disagree with me about the Fed.
Originally Posted by PeterL I understand what you wrote, but during those fifty years the dollar lost 90% of its value, and manufacturing left the U.S. in heaps and piles. With the loss of jobs was the loss of potential customers, and that's what will hurt over the long run. I few weeks I noticed that one mall has been reconfigured so that some stores gae up half their area without chaging theri appearances. While cheap currency doesn't mean much to people inside that country most of the time; it shows that an economy is hurting. I agree wioth you about the Fed. The Fed still is an excellent clearing bank, but it has done a horrible jobe managing the currency. First off, let's put the issue of manufacturing leaving the country to bed quickly. All that means is that there are more prosperous prospects than manufacturing for Americans to do. 200 hundred years ago 80% of the population (I'm guessing to make a point) were in farming, and then the industrial revolution came around and people went into manufacturing. Today something like 2% of the population is in farming. Manufacturing leaving is a nice political point (especially by unions, surprise surprise) but Americans have higher paying jobs than manufacturing offers. (Caveat: as long as they are educated or skilled) If manufacturing should ever be needed in this country, we could easily re-industrialize in a matter of a few years. When you say cheap money historically, I assume you're referring to this chart: http://images.huffingtonpost.com/2010-06-21-usdgold.jpg As you can see the big drop occurred when we decoupled the dollar from gold back in 1970 I think. Decoupling probably saved us in this recent recession from a great depression. Decoupling allows the Fed to float the value and therefore giving it flexibility. If the dollar today was the price of gold we either couldn't afford anything or the value of all our assessts would drop in catastrophic deflation. Dropping the value of the dollar also helps our debt because our debt in real dollar value is less. Also the lower dollar makes our exports more competative. There are too many factors that go into this drop and it's not clear if it's for the best or not. That drop is also a function of the ever increasing world trade. Now I know Conservative economists (and you know I'm a Conservative) emphasize the need for a strong dollar, but I'm not clear what the advantage is. Everyone claims they want a strong dollar, but yet they allow it to drop. I've never quite understood it. I'm coming to the conclusion it's political posturing, even if it's from my side.
I don't buy that you know what you are talking about, PeterL. The government of USA is not telling people what to do, but on the contrary, it is the people that tells government what to do. The people owns the government. It is the government of the people, by the people and for the people. It's a good thing that we have a good electoral college and that the vote is secret and that the goons cannot win. This is the age of girls rising in statue due to that. You might be better straightening bananas at the dock.
Originally Posted by Buh4Bee Peter L, I actually enjoyed reading your history of the Fed and the following conversations. I agree that you want to keep people working and taxes low, but keeping government small can have its downfalls too. But this is a minor complaint, I'm not really saying much. I read this last night before I went to sleep and I was surprised. I understand what you mean, but history has shown that government will try to bite off more than it can chew, and I regard personal conduct of individuals (not social activity) as something that government will never manage to chew. It's nice to have enough government to take care of trouble in times of natural catastrophe, but no one needs a government that tries to impose its will on people around the world, government that tries to regulate personal relationships, government that tries to tell people how to live their own lives; eventually such a government will collapse under the weight of itself, but it will be trouble until it does collapse. As a student of history, I have considered government in various periods and of various types; I think that the best government that Earth has seen (at least for several millennia) was the U.S.A. in the early 1800's. Other times and places have had better government in some waus, but I would put that time and place against any of those.
Instead of mongering and babbling so much, you people should show me specifics about other countries that have a better economy and better resources put to practice than The United States of America. Show me moneys around the globe that are more expensive. Show me power, not diarrhea talking about power.
Peter L, I actually enjoyed reading your history of the Fed and the following conversations. I agree that you want to keep people working and taxes low, but keeping government small can have its downfalls too. But this is a minor complaint, I'm not really saying much. I read this last night before I went to sleep and I was surprised.
Originally Posted by hannah_arendt So, what do you propose? What would you do if you were a president? I think that the social policy is very harmfull. There shouldn`t be any unemployment benefits. The rule is simple: if you don`t work, you don`t eat. Then people would probably start doing something. I would make government much smaller. When people are out of work because of bad government policy, then the government owes those people something. I would much prefer to correct the programs that led to there not being jobs, but until then those people need to get something.
Originally Posted by hannah_arendt Why do you think that? But you have the right to have your own opinion. I had to workj very hard to have what I have now and I don`t want to share it with anyone but thanks to paying hight taxes I have to. Don't pay attention to Cafolini. I put him on my ignore list months ago to avoid seeing his posts.
Originally Posted by Virgil Not sure what exactly you mean by the fifty years. The years 1982 to 2007 were the best block of a 25 year period in the economic history of the country, and that includes the roaring twenties and the gilded age. People don't realize how up and down, boom and bust the economy was prior the 1980s. Yes we had great years but we also had sharp down years as well. (I don't want to exaggerate it, though. Overall the US has enjoyed the best economy worldwide since the start of the country.) But since 1982 there were two only mild recessions (1991 &2001), nothing like a bust period. Second, your recent history is also suspect. I can't remember the exact year (2005 or 2006?) was one of the best year in over all economic indicators in the country's history. The unemployment rate was an astounding below 5%. Yes, the 2008 recession has been a hard time, and despite the politicians we may be finally coming out of it. It's been one of the worst recoveries in the country's history, and when people say it was a deep recession, well yes. But history shows the deeper the recession, the stronger the recovery. Something strange has been going on, and in my opinion it's the obamacare medical overhaul. It has created a disincentive to hire. But we're going to come out of this. All this economy needs is a few adjustments (lowering corporate taxes and scraping obamacare for a more market based system) and this economy will take off. It may not happen with this president (or maybe it will if he sees the light--we can keep parts of obamacare if his ego requires it) but come these tweaks and the US economy will be roaring. I know where you're coming from with the Fed. There is a debate on whether the Fed helps or hurts. The people who advocate your position emphasize the years where the Fed hurt the economy. But they skip over the periods where it helped the economy. I'm not an economist but I would say (my gut sense) the Fed has use but does need some sort of limitations to what it is free to do. I understand what you wrote, but during those fifty years the dollar lost 90% of its value, and manufacturing left the U.S. in heaps and piles. With the loss of jobs was the loss of potential customers, and that's what will hurt over the long run. I few weeks I noticed that one mall has been reconfigured so that some stores gae up half their area without chaging theri appearances. While cheap currency doesn't mean much to people inside that country most of the time; it shows that an economy is hurting. I agree wioth you about the Fed. The Fed still is an excellent clearing bank, but it has done a horrible jobe managing the currency.
Originally Posted by cafolini hannah. That is one of the most insane statements you ever made. Why do you think that? But you have the right to have your own opinion. I had to workj very hard to have what I have now and I don`t want to share it with anyone but thanks to paying hight taxes I have to.
Nice hook, Virgil, at the beginning. Purpose? PeterL says he has me in the ignore list, but he is so deperate that he managed to edit this comment of mine. LOL
Not sure what exactly you mean by the fifty years. The years 1982 to 2007 were the best block of a 25 year period in the economic history of the country, and that includes the roaring twenties and the gilded age. People don't realize how up and down, boom and bust the economy was prior the 1980s. Yes we had great years but we also had sharp down years as well. (I don't want to exaggerate it, though. Overall the US has enjoyed the best economy worldwide since the start of the country.) But since 1982 there were two only mild recessions (1991 &2001), nothing like a bust period. Second, your recent history is also suspect. I can't remember the exact year (2005 or 2006?) was one of the best year in over all economic indicators in the country's history. The unemployment rate was an astounding below 5%. Yes, the 2008 recession has been a hard time, and despite the politicians we may be finally coming out of it. It's been one of the worst recoveries in the country's history, and when people say it was a deep recession, well yes. But history shows the deeper the recession, the stronger the recovery. Something strange has been going on, and in my opinion it's the obamacare medical overhaul. It has created a disincentive to hire. But we're going to come out of this. All this economy needs is a few adjustments (lowering corporate taxes and scraping obamacare for a more market based system) and this economy will take off. It may not happen with this president (or maybe it will if he sees the light--we can keep parts of obamacare if his ego requires it) but come these tweaks and the US economy will be roaring. I know where you're coming from with the Fed. There is a debate on whether the Fed helps or hurts. The people who advocate your position emphasize the years where the Fed hurt the economy. But they skip over the periods where it helped the economy. I'm not an economist but I would say (my gut sense) the Fed has use but does need some sort of limitations to what it is free to do.
hannah. That is one of the most insane statements you ever made.
So, what do you propose? What would you do if you were a president? I think that the social policy is very harmfull. There shouldn`t be any unemployment benefits. The rule is simple: if you don`t work, you don`t eat. Then people would probably start doing something.
LOL. What's the point of me discussing resources. In my view, the US economy is stronger than ever. What a terrible assigment you have PeterL, having to talk to madmen and mongers all over. At least you could have said without risk that there is not even a fraction on earth of the gold necessary to back the money of today. That one was easy. You must have aspirations and perspirations in alchemy. ROFLMAO
Yesterday I mentioned this in a bar, and the bartender said that they had recently removed the self-serv checkoutss from one supermarket in the area. One of the known problems wih those thing sis that they require more repairs than do humans.
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