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Meltdown of U.S. Dollar Underway as China Dumps the Currency

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posted on Apr, 16 2008 @ 05:20 PM
So... really has anyone verified the source of this news story or is everyone just spinning wheels?

posted on Apr, 16 2008 @ 05:26 PM
Let us not forget that the major obstacle in uniting the three North American countries is the difference in currency. Once the dollar has dropped far enough I'm sure that we will start hearing more about plans for the Amero. It would have been virtually impossible to bring the Mexican Peso up to par with the Dollar of either America or Canada. But, making a currency decline in value isn't nearly as hard. You don't have to find any natural resource or build up a commercial sector ( although Mexico is steadily on the rise due to NAFTA ) and you don't have to borrow from another country. I heard somewhere about plans to put U.S. citizen on our drivers' licenses to make border crossing simpler. This sudden free fall of the dollar doesn't surprise or fool me at all.

posted on Apr, 16 2008 @ 05:34 PM
reply to post by Realtruth

Since you are part of North America I am assuming you are speaking of yourself as well.

Although I try to be as frugal as possible,I look for quality first.Economically it makes sense to me and I need to shop less and throw less trash in the landfill.
I read the "Made in" label on every single thing I buy and do my best to buy 'Made in Canada' or 'Made in the U.S.'. I do make a conscious effort to avoid buying 'Made in China' but sometimes it's unavoidable.

I agree with your point in regards to "needing" and "wanting" and I'm guilty of some indulgences but not many.

As impractical as it is,I often wish we moved to simpler and slower times when an honest dollar was paid for an honest (and well made) product.

posted on Apr, 16 2008 @ 06:13 PM
reply to post by citizen truth

I envy you. It must be nice to be able to afford to be choosy. I would be, if I could be. Unfortunately, those of us who despise the WalMart and such sometimes are "forced" to go there anyway because of the low costs. I hate it.

posted on Apr, 16 2008 @ 06:58 PM
$1.4 Trillion? Is that all? They trade with us in cold hard currency and we get their goods. They have more, FAR MORE, than 1.4 trillion in US currency. If they wanted to they could dump their entire stockpile, reducing our currency value to that of the Peso or the Ruble, and you can't buy anything when it takes $10,000 or more to buy a loaf of bread!

But they don't want to do that, not yet. They want to see the reaction here in OUR economy. See who blinks first. The only ones getting rich in a new depression will be all those "Cash for Gold" companies who can turn your unwanted or old Gold into ingots for sale to the highest bidding nation. So don't sell your Gold for one thing.

The next thing is to loosen the wallets of the well-heeled and celebrities so they can put more $$$$ into circulation and save the Feds from doing all the work with OUR tax dollars. So far neither of the 3 presidential candidates has a really turn-around policy for the economy. They argue for and against NAFTA while a full 32% of today's Hip-Hoppin', game playin, give-me-everything-when-I-want-it youth CAN'T EVEN FIND THE NAFTA COUNTRIES ON THE MAP!

Sorry crock of vittles I say. This ship of state is heading for the breakers and we may see the rats deserting soon. The only bright side will be that we can gouge the haves when we become the have-nots.

posted on Apr, 17 2008 @ 12:25 AM
The Strong Dollar Myth

O'Neill Says U.S. `Strong Dollar' Policy Is `Vacuous Notion'

April 16 (Bloomberg) -- Former Treasury Secretary Paul O'Neill said the "strong dollar'' policy that he and every other Treasury chief since 1995 endorsed is ``a vacuous notion.''

"When I was Secretary of the Treasury I was not supposed to say anything but `strong dollar, strong dollar,''' O'Neill said today. "I argued then and would argue now that the idea of a strong dollar policy is a vacuous notion.''....

O'Neill, President George W. Bush's first Treasury secretary, said during his tenure he repeated the mantra originated by Clinton Treasury chief Robert Rubin that a "strong'' dollar is in the best interests of the U.S.
Full Text

In 2002, after refusing to publicly support the second Bush tax-cut, Secretary O'Neill received a phone call from Dick Cheney informing him that POTUS would no longer require his services.

Bush reiterates belief in "strong dollar policy"

Paulson: ‘U.S. strongly committed to strong dollar’

Paulson affirmed strong dollar view

Sound familiar?

De-bunker of the Year: Paul O'Neill

posted on Apr, 17 2008 @ 01:55 AM
Exactly, why would the US goes to war with China just because their economy is growing strong?!

Originally posted by citizen truth
America can't have their cake and it eat too.
Everyone has the Wal Mart mentality,or so it seems.
The super consumerists want to buy things but they don't want to pay a good dollar for a good product.
Companies respond to this by out sourcing.Americans lose jobs BUT they get products for a reduced cost.
Why buy a toaster for $40 that will last ten years when you can buy one EVERY year for $6.00? Yep, do the math on just this one item.
As much as I dislike China for their human rights issues, I can't dislike them for playing in the capitalist world.
China has silently crept in and fed the masses with their junk.......and continue to do well.
IF China drops the dollar,then it's because it makes sense from a "cutting your losses" perspective.

I see war as the only alternative, and if the situation in America is bad enough, all it takes is a charismatic leader to consolidate anger and bitterness toward China to launch an aggressive war against them.

Why on God's green Earth does this seem to be the answer to every problem the U.S. runs in to?What the hell did China do to provoke a war?Oh,they sold you cheap crap and people line up to buy it.
America's penchant for keeping up with the Jones' will be it's downfall.........and it's apparent thirst to be number one.
I had a longer reply to this thread but the portion I quoted has me seeing red.

Edited for a typo

[edit on 15-4-2008 by citizen truth]

posted on Apr, 17 2008 @ 02:03 AM
Americans are sold out by its own government and its foreign policy. I cannot see how everyone can stop shopping at Walmart because of its cheap prices.

Originally posted by enigma77
reply to post by citizen truth

I envy you. It must be nice to be able to afford to be choosy. I would be, if I could be. Unfortunately, those of us who despise the WalMart and such sometimes are "forced" to go there anyway because of the low costs. I hate it.

posted on Apr, 17 2008 @ 02:22 AM
Absolutely right.

reply to post by audas

posted on Apr, 17 2008 @ 08:33 AM
I would like to point out some extremely intuitive and interesting facts from a China Daily article published in October of 2005.

The date of the article is very important, primarily due to the fact that, when published, we ALL we're living high on the hog and with ALL of this information screaming around us, it seems, that we filter out what we DON'T want to hear, and absorb only what we do.

I think it is time that we should take a serious look at the possibility that the US is going to take us down towards a worldwide recession in one or two year's time.

It is well known that the US is the world's biggest economy, taking up about 30 per cent of global GDP, but it is now also the world's biggest debtor country. According to the most authoritative person on this subject, the US Comptroller General David Walker, who audits the federal government's books, the tab for the long-term promises the US Government has made to creditors, retirees, veterans and the poor amounts to US$43,000 billion, US$145,000 per US citizen, or US$350,000 for every full-time worker.

The reality here is, that, OUR Government makes us promises, that are only backed with the hope that China, Japan, Russia, etc do NOT stop funding all of our debt. Were they to do that, the retirees face some VERY difficult times, and our economy tanks.

And this figure does not even take into account all the personal debts such as credit card bills and mortgages. With a low interest rate of 1 per cent running for the past three years in a row, savings plummeted to just 1.8 per cent last year, below 1 per cent since January and at zero in the latest estimate from the Bureau of Economic Analysis. In 2000, household debt broke 18 per cent of disposable income for the first time in 20 years. Credit card debt alone averages US$7,200 per household.

The Chinese certainly know the EXTREME value in saving! When we're presented with such low rates, and told to spend! spend! spend! we start worrying and screaming? We shouldn't, we made this bed, now we've got to lie in it!

The US Government indebtedness is financed this way: The US now runs a trade deficit roughly 6.5 per cent of its GDP and the gap is widened every day. Its citizens are spending ever more on foreign goods, and with the US dollar as the international currency, the US Government just prints money to finance the deficit. And with this money, central banks in the surplus countries purchase most of the US Treasury bonds as currency reserve.

By now, Japan is the largest creditor of the US Government, and the Chinese mainland has been a fervent buyer for the last few years. As for Hong Kong, most if not all of our reserves are in US dollar denominated assets. The US Government in turn uses this foreign borrowed money to finance as much as 90 per cent of the federal deficit which stood at US$412 billion last year. The federal deficit is expected to be running at about US$2 billion a day at the moment.

Two BILLION dollars a day, is what we run ourselves up in debt and THOSE were figures from late 2005. Is it any wonder investment banks, brokers, and the like are driving the price of commodities through the roof looking for a safe haven? It clearly isn't to me!

Put it simply, the Americans have been living way beyond their means for much too long. On top of this, the Bush Administration is cutting tax at least three times while fighting an expensive war in Iraq, which has already cost the country US$700 billion, and currently progressing at US$5.6 billion per month. Now the US economy is dependent on the central banks of Japan, China and other nations to invest in US Treasuries and keep American interest rates down. The low rates keep American consumers snapping up imported goods.

The above is reason # 1 that the author of this article deserves a raise!
In October of 2005, the Iraq War had ALREADY cost us $700 BILLION and escalating at the cost of $5.6 BILLION per month.
Let me ask you guys, how many tanks of gas, or how many grocery reserves, or how many students could be put through school with $5.6 BILLION dollars per day??! My gut instinct tells me quite a few of each.
Must we REALLY have 4 TV's in the house? 2 BMW's in the driveway? 5000 Square foot homes for 2 people to live in? Seriously, think about that.

Any economist worth his salt knows that this situation is unsustainable. This includes the country's economic guru driver Alan Greenspan, who recently warned his countrymen that the federal budget deficit would hamper the nation's ability to absorb possible shocks from the soaring trade deficit and the housing boom. Now he may have to add two more worries: soaring oil prices and cyclones.

Even GREENSPAN KNEW... it WAS unsustainable, we DIDN'T absorb the shocks, the housing boom DIDN'T last and, in fact, became our worst nightmare! Leave the cyclone part out of the equation there and you have reason #2 that this author deserves a raise!

The US is now clearly in huge trouble, economically, socially, politically, and internationally. The Bush Administration bungled big in cyclone Katrina's aftermath in New Orleans, and then a minor rerun from Rita in Houston, and this will trigger the general outburst of people's dissatisfaction with the government, leading to great internal turmoil lasting for many years. In all likelihood, long-term interest rates are going to rise, and the greatest property bubble the world has witnessed is going to burst in the next one to two years.

And I'm going to underline it in case anyone missed it:

In all likelihood, long-term interest rates are going to rise, and the greatest property bubble the world has witnessed is going to burst in the next one to two years.

How the hell did WE MISS THIS! Why weren't we paying attention?? Because football, the BMW's, the Big Screens, the Weight Loss Infomercials, the "spend till you cant spend any more" Mentalities got just a little in the way.

The countdown is in progress, and there is no way that anybody can do anything to reverse it either by short-term measures such as fiscal and monetary policy, or through long-term reform of tax policy, entitlement programmes and even the entire federal budget.

China Daily Article Source

Just my .02


[edit on 17-4-2008 by alphabetaone]

posted on Apr, 17 2008 @ 10:03 AM
reply to post by Karlhungis

I have always felt that the Western World - Democracy needed to be very watchful of China.

Little too late, imo.

China is the next superpower. It has the USA, economically by the testies.

posted on Apr, 17 2008 @ 02:02 PM
reply to post by Thurisaz

There is nothing in the world holding America financially responcible for our debt..

In the end, we can always take the stance "if you want it, come and get it" .. we could blockade China, stop importing and dissolve our currency. The entire world would be a depression for a decade or so, a major war might break out and our economy would boom because of it.

Oh snap..

I just described WWII .....

posted on Apr, 17 2008 @ 02:09 PM
reply to post by Rockpuck

I have been wondering if that would happen. If we are just ringing up a huge amount of debt only to say, "Whoops, sorry... we can't pay it back." Then drop the dollar and start the Amero to start from zero. I just didn't know how feasible it would be.

posted on Apr, 17 2008 @ 02:17 PM
reply to post by Karlhungis

I've been uber busy today, so I have not been able to keep up with the conversation, so don't shoot me if this has already been covered.

How would it be possible to start from zero? Would everybody's slate be washed clean? Bye bye billionaires? I'm just not grasping this one.

I mean, I can see how if it collapsed and $$ didn't exist anymore that if we started back up with a barter system and established value that way, then work it's way back into currency of some type... but to just instantly replace it?

Please help me get this.
( I think they should have a smilie that is a head spinning, instead of rolling

posted on Apr, 18 2008 @ 10:17 AM
Meltdown of the dollar underway? Yes, the dollar is falling, and it may eventually collapse, but posts such as this do nothing to actual clear fact from fiction. You post this article as support for the downfall of the dollar, but have no opposing viewpoint. That is the problem with much of the posts on this board, they simply do not look at the facts, just the depressing statistics contorted to create fear of a collapsing government. I love this site, and check it often, but China simply will not "dump" all their investments into the U.S. THEY DEPEND ON US. We are the largest buyer of Chinese crap in the world, and without us, they have basically no foreign market. They have been buying U.S. treasuries for years, and just because there is a current down turn, does not mean they are going to throw away billions to "screw" the U.S. Without us, China is back to square one, and they realize this. We have quite a unique relationship with China, and it is one that will not end anytime soon with the "nuclear" option of China throwing away all U.S. investments. Does China have the ability to throw away every dime they own of American debt? YES. Will they, realistically, intelligently make this decision? NO because they are aware it takes them with us. We are dependent on them for our manufacturing, and they are dependent on us to buy that manufacturing. After all, if you made a several hundred billion dollar investment in a company, would you sell every last share if it went through a little rough patch? No, an investment is made for the long term, China is not stupid. Ruthless, power hungry, and corrupt, but anything but stupid.

posted on Apr, 18 2008 @ 08:54 PM
reply to post by Karlhungis

Yet Bush continues to think we can pull outta this,and continues to push to keep troops in Iraq.

This will end like vietnam,and cause more hatred for America.We freed them now let them decide what happens,that is what fredom is all about.

We need to stop spending trillions on a never ending war which can't be won,only winners are defence contractors.

posted on Apr, 18 2008 @ 09:10 PM
You can thank the last two administrations, especially the Clinton administration, for their "China Engagement" BS. All it did was create a dependency on China. Never create a dependency on a Communist Regime, they'll only use you until they can leverage their own assets.

The Clintonites that the Chinese economy would conform to Socialism, yeah right. How dumb that is and was. China's government is consildating more into the Communist realm giving Hu more power than any other Chinese President.

posted on Apr, 18 2008 @ 09:17 PM

Originally posted by Karlhungis

More cheery news about the economy. If the rest of the year goes as well as the first 4.5 months, it looks like Bush is going to go out with a bang.

The final quote from Sarkozy is interesting.

"The dollar cannot remain 'someone else's problem,' " Sarkozy said. "If we are not careful, monetary disarray could morph into economic war. We would all be its victims."
(visit the link for the full news article)

[edit on 15-4-2008 by Karlhungis]

my opinion:
We don't use the Yin here in America... and everyone has been complaining that we send too many of our jobs (manufacturing jobs) to China, fine, let them keep their money, and let's pull our manufacturing back to America and just live with our own money again. Why do we really care about our dollar falling off in another country? Just bring the jobs back, higher the people in our own country to make the goods, then when China or any other nation wants to buy our stuff, they'll have to accept the all mighty dollar or pay in Gold.

[edit on 18-4-2008 by WalkOn]

posted on Apr, 18 2008 @ 09:26 PM
reply to post by Axe0312

I hear what your saying. But I think we view ourselves too highly. The chinese have huge growth going on even while we continue to see foreclosures escalating. Who will supply a population 4 times bigger than ours as they grow? They'll do it themselves with the manufacturing capability we gave them. So why do they need a population 1/4 their size that is having fundamental money problems to buy their stuff?

China is now the 'Dealer'. We're just the strung out debt junkie that sold the farm to feed our habit.

posted on Apr, 18 2008 @ 10:42 PM

Originally posted by alaron
reply to post by Karlhungis

Yet Bush continues to think we can pull outta this,and continues to push to keep troops in Iraq.

This will end like vietnam,and cause more hatred for America.We freed them now let them decide what happens,that is what fredom is all about.

We need to stop spending trillions on a never ending war which can't be won,only winners are defence contractors.

Just so ya know...we are well on our way out of this.

Just like I said back on 3/19/08

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