china to dump 1 trillion in us dollars!

If I am an alarmist I am certainly not the only one. China, Russia, Italy, Iran, Venezuela, UAE have all expressed their desire to begin diversifying their foreign reserves out of US dollars. And it is likely many more countries with more friendly ties to the US are doing the same but choosing not to make it publicly known. Yes, Bush is not responsible for the current situation with Social Security and I was not assigning blame to him. However, as a so called conservative president he has presided over the largest increase in deficit spending than all three previous administrations combined. Does that not set off alarm bells among our foreign creditors? You are naive if you don't think it does. Is it a coincidence the dollar peaked in 2000 and has been on a steady decent thereafter? Conversely, gold has bottomed in 2000 and has been rising steadily since. Political policies determine economic realities whether you believe it or not.

Of course the dollar peaked in 2000 - the next year our financial heart and soul were hit with th terrorist attacks on 9/11 then we went to war two months later - you think the value of our currency will go up after such events? Of course not - only a fool would think as much.

Italy converted to British sterling a long time ago. Bottom line, less than 20% of our debt is held by other countries - the rest is internal. I myself could careless if they all sold it off - sure recession - thats it. But the thing is no one wants a recession. We are the world's largest consumer - if we go into recession the whole world does. Do you know what would happen if we payed all the debt tomorrow? Currency would flood the market and guess what - recession AND inflation - as that is no longer currency other countries have tied up.

Do you think China wants that? Russia? The EU? No - they don't - not because they love us - but because whats good for the American Economy is good for the world. This is true.

Of course our debt has sky-rocketed, its a thing called war and it always happens during such times. History shows this if you even bothered to look at the graph I presented.

The facts are there - from credible sources; forgive me if I find them more accurate than your predictions and accusations.

DENIED.

The facts are there - yes they are so why are these countries dumping the dollar? Actions speak lounder than words do. Our foreign creditors are very much concerned and they are not the only ones. Legendary investor Warren Buffet has made a huge bet against the US dollar last year. Listen to his comments here:

"Our country’s net worth so to speak, is now being transferred abroad at an alarming rate," he said. "In effect," he warned, "our country has been behaving like an extraordinary rich family that possesses an immense farm. In order to consume 4% more than we produce – that’s the trade deficit – we have day by day, been both selling pieces of the farm and increase the mortgage on what we still own."


And this extraordinary statement came from one of the Fed governors:

The head of the Dallas Federal Reserve, Robert McTeer, shares this position. In a speech on October 7, he said that there were only two ways to address the unsustainable current account deficit. Either US incomes would have to shrink so that consumers will buy less foreign imports or else the dollar would have to weaken. "Over time, there is only one direction for the dollar to go – lower," he said.

Warren Buffet is not the only one putting his money where his mouth is. Legendary fund manager John Templeton agrees and has also predicted a massive currency crisis will unfold in the next 5 years along with a serious crisis in real estate which we are seeing unfold now. Other big money players like Bill Gates and George Soros have also made big investments in Gold and Silver in recent years.

So the question you have to ask yourself is who ya going to believe?

Originally posted by crisko
Social Security is not an unfunded liability - every worker in America aside from a few groups are required to pay taxes into it. - it has made money year after year; it's the soon to be (retired) baby boomer's that hurt the system.

In each year since 1982, OASDI tax receipts, interest payments and other income have exceeded benefit payments and other expenditures, most recently (in 2004) by more than $150 billion. [26] As the "baby boomers" move out of the work force and into retirement, however, it is anticipated that expenses will come to exceed Social Security tax revenues if there are no changes in current law concerning taxes, benefits, and the retirement age.

So what happens as they retire?

According to most projections, the Social Security trust fund will begin drawing on its Treasury Notes toward the end of the next decade (around 2018 or 2019), at which time the repayment of these notes will have to be financed from the general fund. At some time thereafter, variously estimated as 2041 (by the Social Security Administration) or 2052 (by the Congressional Budget Office), the Social Security Trust Fund will have exhausted the claim on general revenues that had been built up during the years of surplus. At that point, current Social Security tax receipts would be sufficient to fund 74 or 78% of the promised benefits, according to the two respective projections.

There are two views to this; lets start with the "ZOMG THE SKY IS FALLING" side of the coin.

Now this is a very big problem indeed - how do we fix it? Can we fix it? Yes we can - and it would hurt - a lot. There are multiple solutions - all of thing would leave working class America zinged - they economy would slow but not crash. Basically - we would become more like Europe.

• All federal taxes would have to double immediately and permanently. A household earning $100,000 a year would see its federal taxes double from an average of about $20,000 to $40,000 a year. All state taxes would have to increase 20% immediately and permanently.

• Or, benefits for Social Security, Medicare and government pensions would have to be slashed in half immediately and permanently. Social Security checks would be cut from an average of $1,500 per month for couples to $750. Military pensions would drop from an average of $1,782 per month to $891. Medicare spending would fall from $7,500 to $3,750 annually per senior. The Medicare prescription-drug benefit enacted last year would be canceled.

•Or, a combination of tax hikes and benefit cuts — such as a 50% increase in taxes and a 25% reduction in benefits — would avoid the extremes but still require painful changes that are outside the scope of today's political debate. Savings also could come in the form of price controls on prescription drugs, raising retirement ages and limiting benefits to the affluent.

Now lets look at the views of one optimist:

Economist James Galbraith of the University of Texas in Austin is a rare optimist in this debate. "I'm not at all concerned about Medicare or Social Security," Galbraith says. "Unless the government goes broke, Medicare isn't going to go broke, and the U.S. government isn't going to go broke because it can print money."

Galbraith says the country can handle higher tax rates, as Europeans do, and can save money by cutting spending elsewhere, such as on defense, and by implementing a Canadian-style health care system that uses private doctors and hospitals but has the government set prices and pay the bills.

Your tone is to alarmist, and you make it sound as if Bush created the social security system. He didn't - he is a War Time President - you can bash him for that - but you cannot blame (or give credit) him for Social Security.

[edit on 25-12-2006 by crisko]

So lets get this straight, you want a Canadian styled Health Care System where the majority of your Doctors come from third world countries cause the Canadian Doctors went to the U.s. for more money, you want a system where the province pays 75% and the Feds pay 25% of the cost, you want to use out dated broken equipment and get put on a waiting list in which you'll probably die before you get treatment in a system where Health Canada takes bribes from Big Pharma to push pills that cause the need for more pills.

Then you want to turn your economy into that of Frances, oh yeah nothing like all out & out socialism where you rob people who work to pay leeches & welfare recepients hand outs to get votes. Nothing like cars burning in the streets for months at a time, or 20% unemployment.

Last week Bush sent his entire economic A-team to China for strategic and economic talks. Was it just about the Dollar/Yuan exchange rate that has been a source of contention for so long? NO, my sources tell me that it was to AVERT a dollar crisis which is looming in the new year. You see, Congress has threatened to slap a tariff on all Chinese imports of 27% this year but has so far failed to get the support to ram this through. With a new Democratic controlled Congress in office next year this ISSUE is front and center and will now pass unless China relents and allows the Yuan to rise.

However, China has repeatedly told the US that the exchange rate is a sovereign issue for them and they will not move on it one iota - despite what you will hear in the media. If this tariff now passes which it is now sure to do, China has said it will be dumping the US dollar in retaliation. What reason does China need to buy US treasuries other than to support the dollar and their exports anyway? Without that reason China has no reason to hold US dollars which has been losing purchasing power for them the last 5 years. So we may yet see the dollar begin to sink in 2007 and long term interest rates and mortgage rates rise much higher than they are now. My advice to anyone reading this - prepare now.

The problem here is people really have a lack iof understanding on how things are on a global basis.

I will try to simplfy it.

Take all the nations in the EU and average out the debt:

67% GDP

United States:

64% GDP

End of discussion.

Why is this thread even around?

I have already debunked the OP and his title with facts.

*sigh*

Bloomberg: Dollar Slides; U.A.E. Says Selling U.S. Currency, Buying Euros

Euro's for Dollars. Yes but only in a limited way. Don't know if this is good for the euro zone.


[edit on 29-12-2006 by looofo]

One thing is for sure, whatever detremental news should emerge for the US dollar, the last people the US government wants to hear about it is the US investors.

Imagine if Microsoft were to convert it's entire reserves to the euro to save the company's worth. Is that legal by the way? I dunno. Some lawyer would make it a crime most likely.

So, is anyone here buying USD/EUR right now? Or are ya sellin against?
If I hadn't gotten out of the game a while back, I would be favoring the euro right now for the long term, but I used to day trade and watch for spikes... but then again, thats probably why I got scared out of the trading game.

If you're in it, NEVER go against the trend. Watch for a trend, then look at the frequency of any spike patterns you can find. If you have a formula you like to use, that would be the time to use it. If any of your information shows a chance your prediction is wrong DONT MAKE THE TRADE! Better to be out of the game than losing to it.

Update :
I just took a good look at EUR/USD, the trend since the news article was released seems to indicate an overall steady movement in favor of the EUR.
Typical spikes in favor of the USD occur after 9AM, after those spikes, they then return higher for the EUR.

As of 1:45 PM today, there is still ample room for selling before a reversal.

... why did I ever get out of forex trades? I really did love it so... okay, as of now I have decided to get back into it... I just need to steady my financial situation first.

Oh, yes, any and all information from me about forex should only be taken as oppinion and is never to be used as advice... essentially, don't sue me, you're the moron that didn't make his own decisions.