Fears of dollar collapse as Saudis take fright

This is major news for obvious reasons.

The Fed demonstrated total desperation this week confirming that they will sacrifice the dollar to try and save an impossible domestic economic situation.

The Saudis saw that and figured that if the US Fed won't back it's own dollar why should they? Add that to the fact that China and others are quietly selling USD assets and you have a clear picture of where your economic future is headed.

Here's another clear sign of where things are headed:

PTS: Congress Asked to Lift Debt Ceiling

You've bought the biggest car you can finance, the biggest house you can finance, the best clothes you can finance, you live paycheck to paycheck, you just took a pay cut via a plunging dollar and have been living beyond your means for over 30 years...

What do you do?

Rethink your spending habits?

Hell No!!

Raise the credit card limit baby!

We're so far beyond screwed that the great depression will look like good times. :shk:
.

edit: link fixed

[edit on 9/20/2007 by Gools]

Administration's plan for large arms sales to Saudis stirs reservations in Congress.

WASHINGTON: The Bush administration's proposed multibillion-dollar weapons sale to Saudi Arabia brought new allegations in Congress on Tuesday that the monarchy has been lax in countering terrorism. Link

Speaking of congress Marg, I happened across this news from Tuesday (the day before the Saudi interest rate announcement) that may play into this unfolding event. It looks like congress is again expressing skepticism over Saudi efforts to curb the Sunni insurgency in Iraq...placing the Bush arms deal in jeporty. Along with concerns over inflation, could the Saudis be flexing their economic muscles in an effort to push this deal through?

This is it ladies. This is the end of the dollar. Take action now while you still can. Get out of paper currency. Buy gold. Buy oil. Buy friggin soybeans!! Anything is better than worthless paper.

Maybe next time we wont make the same mistake? Unfortunately, there will be no next time.

Originally posted by OBE1
...could the Saudis be flexing their economic muscles in an effort to push this deal through?

Nice find!!

This along with China's threat to dump it's dollar reserves if the US imposes trade sanctions to force a yuan revaluation shows you who is really in charge (lenders) of the US economy (borrowers).
.

I'm not very well versed in economics, but I do have a question concerning a collapse of the US Dollar.

How will this affect Asia and ASEAN and what will those effects be like?

reply to post by sp00n1


Anyone who follows panicky advice like this is an idiot. America's still got loads of natural resources and a well-trained workforce. Somehow or another we'll find a way out of this mess.

I think there might a reverse yen carry trade situation coming next...and then what!!!

look at the Canadian looney, first time in over 30 years, it's reach parity with the dollar. I remember a few years ago when shopping in Canada was bargain for us Americans, not anymore my friends.

Canadian Dollar Reaches Parity With U.S.

oh and let's not forget my favorite currency of trade, the Euro, it's breached $1.40.

reply to post by worldwatcher


Canada was cheap? I went to Alberta last summer and the CD was worth 90 cents, everything was still ridiculously overpriced on account of their massive tax regime.

The federal reserve injected about 25 billion into the subprime mortgage crisis. This means the tax payers will have to pay the interest on that money. Why should the tax payers have to pay interest on that money which is clearly a bail out for the bankers. Yet the banks will still own the property(assets). It's a win win situation for the bankers. It's like getting free money.

The federal reserve has been printing money like there is no tomorrow and this is why the dollar is over valued. We should in reality have high inflation. The dollar will collapse if this continues.

True Gools...we are Soooooo vulnerable. We have the Cando, the Euro, and if Russia & China have their way, we may see the new Commie before we see the Amero

used to be for me, when I used MAC makeup, I would only buy it there, certain designer clothes, jewelry etc worked out to be cheaper. Of course, I always had a relative with a calculator to make sure that with the conversion I was getting a good price. btw that was in Toronto/Ontario area, so I'm not sure if the area is the reason for the price differences.

reply to post by OBE1


So two countries with highly questionable and overrated economies (Russia and China) are going to join forces? That's about as much sense as I'm used to their leaders making...

I think you guys are over doing it with the doom scenarios. A falling dollar is not a good thing but in the end the US gets away with robbery of the world. We wount see another depression. The bottom line is, life in general is better than it was then. Regaurdless of the financial part, life is better now than it was then, so a down turn these days is nothing that we think it will be.

In all the countries that have rising currencies against the dollar, the pirce of goods there are also rising. So who is better off?

The US is in the best situaion. In Europe, this summer, i went to the super market in greece and spent 30 euros on about 3-4 things. exchanged out this is about $40. $40 in the US i can get food for the whole week. So yes the euro is rising hard, but it will be worse off for the europeans than it will for americans. Same goes for UK. i went out to a place to eat in london, it was the equilivant of at $35-40 quality palce to eat in the US. Exchanged out its was about $100 to eat in the UK.

I spend $6-8 a day for a decent lunch in boston durring the week. A simple coke in europe cost 2-3 euros .

People in the UK and europe can come and buy up stuff in the US at a 50% discount. Things are so cheap here, its amaizng.

I also have friends in canada... every weekend groups of people take border runs to go shopping in the US because it's too expensive up there.

This is the real world perspective i've experienced.

Again, the dollar droping 30% from here is bad, but the people in the US will make out the best from it. Just hedge your self as much as you can and enjoy living cheap while the rest of the world gets screwed





[edit on 20-9-2007 by psperos]

[edit on 20-9-2007 by psperos]

reply to post by worldwatcher


Yeah, I just have a vivid memory of shopping in a non-super ('cause the protectionist Canadian government doesn't allow it) Wal-Mart in Calgary. I was converting the prices in my head to what they would be in USD, I was blown away by how high everything was.

[edit on 20-9-2007 by uberarcanist]

It really all comes down to oil.

Since 1971 when the US dropped the gold standard for good, the real value to the dollar was that it was traded in oil, in fact ALL OPEC oil.

Saddam Hussein decided to trade in Euro's a few years back and look where that got him.

it is no Coincidence that Venezuela and Iran are two Number 1 enemies (accordning to Bush) because they have stopped trading in the dollar as well AND they happen to have a lot of oil.

NOW - let's say the Saudi's don't trust the dollar any more and could be making MORE money on the Euro. Next, Dubai, the UAE, Niger, Gabon (all members of OPEC) decide to follow suit. At that point the US economy is dead in the water because the dollar is backed almost by nothing, and, just as our markets now, will be based more on speculation than actual results.

The RESULT? The US is left with no choice except to LIBERATE these oil giants the way he liberated Iraq.



[edit on 20-9-2007 by TruthWithin]

reply to post by uberarcanist


Well, I don't think Saudi Arabia would need US help to defend themselves against Iran, they have large armed forces, equipped with modern hardware. They air force is on par with Israel, maybe even a little stronger (in numbers and technology, tho IAF has better pilots imo).

Saudi Arabian Army
Saudi Air Force

And by the way, I find Iranian attack on Saudi Arabia highly unlikely.

reply to post by Duby78


OK: point the first- SA only got where they are today militarily because of America's help. Who's hardware are they using, anyways?

Point the second: You really don't think Iran would invade? Look at it this way-Iran is Shia Central. SA is Sunni Central. Sunnis and Shias are blood enemies. SA has the world's largest onshore and offshore proven reserves. You do the math.

reply to post by Duby78


Haha, that's just plain sick!

But it's a very plausible theory...... but i don't think bush has the guts to attack all of them..... right?

reply to post by PureET


Forget the guts, where is he going to get the manpower from? Even if we had a draft, there's no way we could fight that many countries at once and expect to win.

reply to post by 4thDoctorWhoFan


Respect other people's property, in this case country


[edit on 20-9-2007 by pai mei]