Tom Friedman frets about the dollar (NYT 02/24/2005)

[swag]

http://www.nytimes.com/2005/02/24/opinion/24friedman.html?hp

Excerpt:

Ever talk to someone who trades currencies? "Orderly" is not always in the playbook. I make no predictions, but this could start to get very "disorderly." As a former Clinton Commerce Department official, David Rothkopf, notes, despite all the talk about Social Security, many Americans are not really depending on it alone for their retirement. What many Americans are counting on is having their homes retain and increase their value. And what's been fueling the home-building boom and bubble has been low interest rates for a long time. If you see a continuing slide of the dollar - some analysts believe it needs to fall another 20 percent before it stabilizes - you could see a substantial, and painful, rise in interest rates.

"Given the number of people who have refinanced their homes with floating-rate mortgages, the falling dollar is a kind of sword of Damocles, getting closer and closer to their heads," Mr. Rothkopf said. "And with any kind of sudden market disruption - caused by anything from a terror attack to signs that a big country has gotten queasy about buying dollars - the bubble could burst in a very unpleasant way."

Why is that sword getting closer? Because global markets are realizing that we have two major vulnerabilities that this administration doesn't want to address: We are importing too much oil, so the dollar's strength is being sapped as oil prices continue to rise. And we are importing too much capital, because we are saving too little and spending too much, as both a society and a government.

"When people ask what we are doing about these twin vulnerabilities, they have a hard time coming up with an answer," noted Robert Hormats, the vice chairman of Goldman Sachs International. "There is no energy policy and no real effort to reduce our voracious demand of foreign capital. The U.S. pulled in 80 percent of total world savings last year ." That's a big reason why some "43 percent of all U.S. Treasury bills, notes and bonds are now held by foreigners," Mr. Hormats said.

And the foreign holders of all those bonds are listening to our debate. They are listening to a country that is refusing to raise taxes, and an administration talking about borrowing an additional $2 trillion so Americans can invest some of their Social Security money in stocks. If that happened, it would almost certainly weaken the dollar, further depreciating the U.S. Treasury bonds held by all those foreigners.

. . . more

[BrklynLiberal]

1. Has something finally come home to roost?

[Skink]

2. Sure that was Friedman...

Every time he piises me off he goes amd writes something that says come back I really do know what I am talking about.

[bpilgrim]

3. "importing too much capital" sugar coating for financing our debt...

guess it's getting too big a problem for the M$MH to hide... crash must be right around the corner and they need a modicum of credibility to distinguish themselves from faux.

peace

[Zeke]

4. The Repo Depot...

Keep this in mind: the USA owes China 161 Billion in trade deficit.

China thinks Taiwan belongs to them.

If the USA does not keep up it's trade deficit payments, and it won't, I can see China repossessing Taiwan to satify the debt owed them.

Hell, they'll call it "pre-emption."

[Blower]

6. Exactly--

Taiwan is a threat, they could "have WMD to threaten China"

[Blower]

5. A picture is worth a thousand words--and a few trillion dollars of debt...

"Goldilocks has Lead Balloons"
- Suckled by "Oil-Greased Piglet"



more

www.libertywhistle.us

[stopbush]

7. Tom, you're an asshole.

Even in an article written to serve as a splash of cold water in the face, you can't seem to find the spine to call a pig a pig. You insist on providing cover for bushco by writing things like "If that happened" and "it would almost certainly" and "if you see a continuing slide of the dollar...you could see a substantial, and painful, rise in interest rates."

I got news fer ya, Tommy Boy: It IS going to happen...it will certainly...and we will see a continued slide of the dollar. Here's more news fer ya: it's now beyond our control. Even if bushco had good intentions and were economic geniuses, it's too late.

See, Tom, what you either don't understand (or understand but fail to report) is that this is exactly what bushco wants. They are consolidating wealth into THEIR hands while sowing the economic seeds that will shortly bear the fruit of food riots and revolution. That fruit will hand bushco their ultimate goal: declaring martial law, scrapping the Constitution and turning us into a one-family-rule dictatorship for the foreseeable future.

Why don't you drop the incredulous act (you suck at it anyway) and admit that you and the other bush enablers were fine with this plan UNTIL you realized that it would impact you personally. That's right. Little Tommy Friedman is gonna get a big fuckin bush boo-boo right up his rectum.

Fuckin moran...

[The Zanti Regent]

8. Tommy loves living in his Lasseiz Fairyland

Tommy the pin is coming closer every day to popping your baloon. Between Peak Oil and the collapsing dollar, we're gonna have a depression that makes the 1930's look like a disco party.

[doodadem]

9. Buying Euros?

I've been corresponding with a friend of mine, who is a raging Repuglican, and very wealthy (yes--he does have some very good attributes otherwise). I told him about some of the things we've been talking about here, and the articles by PhD economics experts. I got this reply back:
"Just for the record I am not buying Euros or any foreign currency. Hindsight is always 20/20. I am not an alarmist, so I tend not to react to short term news, but remain committed to the longer term goals. I am not overinvested in any one market, spreading my investments in blue chip stock, bonds, and interest bearing accounts, nothing risky or volatile like oil futures or foreign currency. The last big crash before 9/11 was October 1986 and the market crashed from 3,900 to 3,300. The market is now over 10,000.
Don,t worry yourself over things that in all likelihood cannot or will not happen, Take a big deep breath and understand that the world changes and we will change with it."

I told him I'm glad I can raise my own vegetables on my farm, heat with wood, and on well water. Trying to get more self-sufficient all the time. Now if we could just get that ancient windmill to work.....