Report: New Iran Missiles...

[Justice 0]

It seems our local news network was wrong about that, thats my bad. The Britsh Army is currently the most intensely trained Army in the worls, they're not a huge army but they don't pretend to be. Everything thet do they do right, unlike the U.S Army who have actually killed quite a lot of British soldiers, there have been no friendly fire deaths on the British side.

???

 

Proof of this? This sounds a lot like talking out your ass.

 

The European Economy is new and is thriving in it's growth at the moment, America has a powerful economy yes, but your currency is worth shit of here, at the moment it's 1.9 dollars to the pound, and it's 1.4 Euro's to the pound so both currencies are both currently stronger than the Dollar.

 

*Shrugs* The dollar rises and falls. It happens. Now to say that Europe's economy is okay when half your countries have unemployment rates like 10% and such is idiotic.

 

Here are a list of the top 10 countries to live in.

 

1 Ireland

2 Switzerland

3 Norway

4 Luxembourg

5 Sweden

6 Australia

7 Iceland

8 Italy

9 Denmark

10 Spain

 

With obvious exception of Australia, all of these Nations are E.U countires.

 

Again, you miss the fact that most of these countries are under 20 Million people. It's not that hard in comparison to a larger country to be an easier place to live in. Considering that America has around 230,000,000 more people and still is able make it into the top 15 is a bigger accomplishment than any of them making it into the top 10.

 

The thing with European politics is that they are still trying to make things better, France's politics are horrible I'll give you that, the main reason they were against the War is that Chirac had an illegal trading program with Iraq for ages (who's breaking U.N codes there?)

 

It wasn't just Chirac, it was a few countries and the UN itself. But places like Germany and Italy are horrible when it comes to politics. The Greens have such a stranglehold on the Democratic Christians in Germany that you'd think THEY were the one in power and not the smallest part of the electorate. Italy's politics are the biggest joke ever. They have so many parties that coalitions don't last more than a few months or a year, and their governments are never able to get anything done due to so much infighting.

 

The E.U policy of diplomacy and appeasment may be naive at times, but it's better than jumping to conclusions, sure America went into Iraq on false information, personally I don't blame Bush for that, but rather his Admin, Bush didn't actually gather that intelligence himself, he just told people what he was told, he's not smart enough to muster much else.

 

?

 

That makes no sense. Bush can't go on anything other than what intelligence tells him. Muster up what else? Is he supposed to go out in the field himself and find this shit out?

 

Sometimes I like the way Germany works, it really seems like their people have a real say in what happens, while this makes the country politically weak, people in Germany lead good lives, I know a few Germans and they love their home.

 

Germany is a nice little country, but their economy is not in the best of straits if I remember correctly. Plus, I find their political system to be a bit flawed, but that's just my own opinion.

 

When I think of great places to live in Europe I do think of mainly scandinavians countries, their culture really interests me, I love the uniques outlook they have on life. France, I would never live in France, I would in Geramny though, Italy, they have always been a bit of a mess politically. It's the smaller European cultures that have booming economies, maybe not compared to America, but peoples lives there are simpler and generally a lot happier.

 

Well, as a rule they pay about 40% more in taxes each year. Sweden had to restructure after their income tax reached something in the area 70% at one point. Of course, smaller European cultures deal with smaller populations, which makes it easier to manage. For what the US has, the US does it best. People in America have interesting lives as well, I'd say. There's certainly a vast diversity in them all, that's for sure.

 

I agree Britain is a pretty shitty place to live, although Scotland would have been higher if viewed as an independant nation, not too much higher though because of the amazing lives people have in our nothern areas.

 

I'll take your word for it.

[Guest Jason]

I just want to go back and discuss your previous thread, no pun intended.

 

Why is it that we've always taken their oil? Where the hell are we hiding it? Along with all the Jews that didn't die in the Holocaust and the Cambodians that didn't die under the Khymer Rouge?

 

Of course it’s not going to happen as soon as Bush invaded; otherwise the UN would have send forces in to prevent it. Bush will justify taking some to pay for war expenses, and will sell much, much more to large business and contractors illegally, some being in the United States but most being to the middle-east, which is what the entire world has known and still does know. The Bush family have a history with the Bin-Laden’s so I wouldn’t be surprised if sold some to a relative of Osama…off the record of course. Wasn’t it nice the way Bush sanctioned the flight to take the Bin Laden’s out of the U.S. after 9/11, that’s what friends are for. The rest of the comment has nothing to do with the subject, so I’ll leave that.

 

This is a joke, right? France nominated a Neo-fascist for Prime Minister. Germany is so under the grip of a minority party in the Greens that they can't do anything without checking it out to make sure it appeals to the smallest part of the electorate. Italy is a political joke.

 

You really want to get into bad nominations? Anyway...the bottom line is, Jaque Shirak made the decision that was right for his country. Tony Blair licked George Bush’s ass and brought his country into a way they didn’t want, and he’s hated because of it. Eng of the day, the French wanted to let the UN inspectors do their job because they believed Iraq wasn’t an immediate threat, and I’m sorry, but they were right! We all know it; some just choose not to admit it. The French were right, but Bush-supporting America just hates them because they didn’t back Bush (not American, Bush) in an illegal invasion, it’s as simple as that.

 

No offense, but Europe is in a bigger political quagmire than the US is right now

 

Now I think you’re joking lol. Seriously though, to say Europe is doing badly is as far from the truth as one can be. The EU is a fastly growing economy, and despite the comments, most EU state governments are supported by their people and all are the greatest democracies in the world. The Bush administration has fucked up the U.S. economy and really, I can’t stress this enough, it’s Bush NOT America, so anyone defending here isn’t defending America, they’re defending Bush, which again is their choice.

 

especially considering the European Economy has been lackluster for years now.

 

And yet the Euro is stronger than the Dollar. In fact, last time I heard, the Dollar was going through a big slump on the FTSE.

 

I find it almost funny that Bush is getting blamed for Iran taking aim at Europe. Here's a novel idea, Europe should step and do something about. Why does this all get thrown at Bush? If he sits out and doesn't anything about, he get yelled at by Europe and blamed for allowing Iran to harbor weapons. If he goes in and takes them out, he'll get labeled war monger once more and yelled at for taking force. Seriously, Is there a acceptable answer for this?

 

I explained all my thought on this above, but to summaries, we ARE dealing with it, and we have gotten a deal with Iran. If push comes to shove, Europe is well equipped to defend itself, but unlike Bush, this Union doesn’t believe in just bombing the hell out of a place and killing innocent people.

 

Bush also doesn’t get the blame for Iran developing nuclear arms, and I don’t think anyone has said that either. He does however get the blame for creating an atmosphere our fright in order to justify invading Iran, like he did Iraq. Sadly, a lot of the American public have been brain-washed by media, and I really never though I’d be saying that about the USA. There are some who can see what’s clear to their eyes, but unfortunately they’re slightly outnumbered.

 

Okay, this is a joke. The UK's military could be taken out, right now, but a 15 ship Carrier Group. No offense, but you don't have shit in comparision

 

Thankfully in 5 years time there will be an All-Europe army, so that’s not a problem. Fortunately though, it will be run by a committee, so no one man can lead it into war. War should ALWAYS, ALWAYS, ALWAYS be a last resort, ALWAYS.

 

and economically, we are still a bit more powerful than you all,

 

The difference between the two entities it, Europe can be self-sufficient, America can’t. Remember the infamous Steel-issue between the EU and America? George Bush doubled the tariff tax on European steel so people would buy U.S. steel. Basically, lets say a piece of steel cost $50. Bush them doubled that by charging U.S. residents $50 Tax when buying EU steel. When buying American, the Tax would have been only $10. To counter this, Europe doubled the tax on every U.S. import, which hit the U.S. economy strongly. Europe are able to survive within the EU trading block, and Bush knows it, which is why he hasn’t done any similar tax moves since then. John Kerry knew how to resolve things, but he wasn’t voted in, in favour of a man who is undeniably killing the great country he leads.

 

P.s we may have opposing views, but I love being able to discuss an issue with someone without receiving national cheap shots or being called a leprechaun.

[Justice 0]

You really want to get into bad nominations? Anyway...the bottom line is, Jaque Shirak made the decision that was right for his country. Tony Blair licked George Bush’s ass and brought his country into a way they didn’t want, and he’s hated because of it. Eng of the day, the French wanted to let the UN inspectors do their job because they believed Iraq wasn’t an immediate threat, and I’m sorry, but they were right! We all know it; some just choose not to admit it. The French were right, but Bush-supporting America just hates them because they didn’t back Bush (not American, Bush) in an illegal invasion, it’s as simple as that.

?

 

He was developing a long range delivery system that could hit Cario. This isn't a threat? Iraq was bribing UN, French, Russian, and Chinese officials to get sanctions removed so they could restart their weapons programs. Saddam was completely abusing the Food-For-Oil to fund whatever illict programs he wanted. This is the actions of a peaceful nation? No offense, but saying Iraq wasn't an immediate threat is a shitty reasoning when you look at the larger scope of their actions and what they were planning on doing for the immediate future.

 

Now I think you’re joking lol. Seriously though, to say Europe is doing badly is as far from the truth as one can be. The EU is a fastly growing economy, and despite the comments, most EU state governments are supported by their people and all are the greatest democracies in the world. The Bush administration has fucked up the U.S. economy and really, I can’t stress this enough, it’s Bush NOT America, so anyone defending here isn’t defending America, they’re defending Bush, which again is their choice.

 

Why? How much do you know of governmental politics? Our government isn't nearly a quagmire. As much as you can demonize the administration, but our political system is hardly a quagmire at the moment. Once again, Italy is so torn that nothing EVER gets done, and Germany is being held hostage by the Greens at the moment. France had to choose between a guy like Chirac, who has sent their economy down the hole, and a Neo-Facist who denies the Holocaust.

 

And, um, Bush is the representative of America at the moment. No offense, but he's the President. He's just as representative of America as Schroeder is of Germany. He was elected by majority. By your reasoning, no countries leaders out side of dicatorships are representing their countries because people voted against them. It doesn't make sense.

 

And yet the Euro is stronger than the Dollar. In fact, last time I heard, the Dollar was going through a big slump on the FTSE.

 

And? The dollar was doing fine for a while as the economy was in a slump. The dollar is a single indicator of the economy, but overall we still have a far, far stronger economy. We've been adding jobs since spring of last year and haven't stopped. Places like France and Germany (The most comparable European countries due to size) have unemployment rates of something like 8-10%.

 

Is this the only support you have? Because you are looking pretty weak.

 

I explained all my thought on this above, but to summaries, we ARE dealing with it, and we have gotten a deal with Iran. If push comes to shove, Europe is well equipped to defend itself, but unlike Bush, this Union doesn’t believe in just bombing the hell out of a place and killing innocent people.

 

This is hilarious. Seriously, Iran has broken a half-dozen deals with these missiles and their nuclear program. Europe has shown NO interest in actually shoving anyone back. You are talking completely out of your ass. Europe is well equiped to defend itself from invaders, maybe, but they have very little power to actually act. Britain is probably the biggest exception to this rule.

 

Bush also doesn’t get the blame for Iran developing nuclear arms, and I don’t think anyone has said that either. He does however get the blame for creating an atmosphere our fright in order to justify invading Iran, like he did Iraq. Sadly, a lot of the American public have been brain-washed by media, and I really never though I’d be saying that about the USA. There are some who can see what’s clear to their eyes, but unfortunately they’re slightly outnumbered.

 

...

 

...

 

Iran is pretty much on the way to creating nuclear missiles that can strike at Europe. They've broken many agreements and treaties to get this far. And you are convinced they are no threat because you've made another agreement with them?

 

You are the one who has been brain-washed, not us. Seriously, you've had "War is never the answer" pushed down your throat so much that you are pretty much ignoring everything we've learned from dealing with these people in the first place. I mean, the people you sent in to check on their nuclear program didn't actually check them out, they just took their word for it. Wow, I really have faith in these guys.

 

You are like a boot-leg version of C-Bacon. A very sad one, at that.

 

Thankfully in 5 years time there will be an All-Europe army, so that’s not a problem. Fortunately though, it will be run by a committee, so no one man can lead it into war. War should ALWAYS, ALWAYS, ALWAYS be a last resort, ALWAYS.

 

God help you when someone invades Slovakia and the motion to defend it fails 4-6 because no one wants to commit their troops to some foreign war.

 

The difference between the two entities it, Europe can be self-sufficient, America can’t.

 

Ahahahahaha... Dude, that's a joke. You do understand that Europe isn't producing enough food to sustain it's population, right?

 

Remember the infamous Steel-issue between the EU and America? George Bush doubled the tariff tax on European steel so people would buy U.S. steel. Basically, lets say a piece of steel cost $50. Bush them doubled that by charging U.S. residents $50 Tax when buying EU steel. When buying American, the Tax would have been only $10. To counter this, Europe doubled the tax on every U.S. import, which hit the U.S. economy strongly. Europe are able to survive within the EU trading block, and Bush knows it, which is why he hasn’t done any similar tax moves since then. John Kerry knew how to resolve things, but he wasn’t voted in, in favour of a man who is undeniably killing the great country he leads.

 

That's a pretty shitty comparison because you actually missed what Bush was trying to do. He wasn't trying to get people to buy US steel, he was just trying to gain the Steel worker vote to do better in places like Pennsylvania.

 

You also misinterpret why Bush backed off. He was doing it as a campaign ploy. Had he really wanted to, he could have put higher tarriffs on all European products as well. Why try going into a prolonged trade war over a campaing ploy? Europe played hardball and Bush said "Well hell, I don't support this anyways?" (Since he's always been more free-trade.

 

Once again, I haven't heard ANYTHING regarding a healthy economy from Europe. All I've heard is malaise. If you have any actual proof, then I'll gladly accept it. Maybe Popick can help us out here?

[Guest BDC]

I just quit reading Jason's post after this little gem:

 

Of course it’s not going to happen as soon as Bush invaded; otherwise the UN would have send forces in to prevent it.

[Guest Jason]

He was developing a long range delivery system that could hit Cario. This isn't a threat?

 

Key word: Developing (not to mention unproven) We were told he had WMD that could hit us in 40 minutes, which was a lie.

 

Iraq was bribing UN, French, Russian, and Chinese officials to get sanctions removed so they could restart their weapons programs.

 

So says the Bush administration, who also claimed they could hit us with a bomb at any moment, yet they had no fear when they invaded the place. Strange that.

 

Saddam was completely abusing the Food-For-Oil to fund whatever illict programs he wanted.

 

Saddam was a maniac. This isn’t what people objected to, and are angered about, it’s what the Bush administration want you to believe though.

 

This is the actions of a peaceful nation? No offense, but saying Iraq wasn't an immediate threat is a shitty reasoning when you look at the larger scope of their actions and what they were planning on doing for the immediate future.

 

Iraq was an immediate threat, that’s been proven, the British PM has admitted the information was wrong.

 

Why? How much do you know of governmental politics?

 

I studied it for 3 years and take a personal interest in it.

 

Our government isn't nearly a quagmire. As much as you can demonize the administration, but our political system is hardly a quagmire at the moment.

 

No one is saying the American economy is lower than everything and a huge epidemic is facing the country, and no one wants that to happen, but fact is, your political system and foreign affairs policy have taken a huge hit since Bush came to power.

 

Once again, Italy is so torn that nothing EVER gets done

 

Italy has a great economy, which has grown steadily since 2001. I most definitely wouldn’t be complaining if I was an Italian.

 

and Germany is being held hostage by the Greens at the moment. 

 

Although I disagree with your comment, one could make the comparison of nations being held hostage to that of the Bush administration. Both governments were voted in after all, well, only one was voted in fairly the first time.

 

France had to choose between a guy like Chirac, who has sent their economy down the hole, and a Neo-Facist who denies the Holocaust.

 

The French economy has gone down the hole?!?! The French economy has grown stronger than expected this year, with a 0.8% increase in the first 3 months of 2004, it’s grown almost 1.5% in this year alone and it sits as the world’s 4th largest economy. If that’s down the hole, I sure as heck want to be there.

 

And, um, Bush is the representative of America at the moment. No offense, but he's the President. He's just as representative of America as Schroeder is of Germany.

 

That’s kinda the whole point of the Pro/Anti Bush thing.

 

He was elected by majority. By your reasoning, no countries leaders out side of dicatorships are representing their countries because people voted against them. It doesn't make sense.

 

He wasn’t the first time around, since the election was fixed. If it was carried out fairly, Al Gore would be sitting in the white house and America would still be best financial friends with everyone.

 

Seriously, Iran has broken a half-dozen deals with these missiles and their nuclear program.

 

2 to my knowledge.

 

Europe has shown NO interest in actually shoving anyone back. You are talking completely out of your ass. Europe is well equiped to defend itself from invaders, maybe, but they have very little power to actually act.

 

Look, we don’t believe in war unless it’s a last resort. How would you enjoy having your country invaded and your innocent family and friends killed? We’ve done 10 times more with Iran than the US has ever done, and through talking, we are proving that war is unnecessary. And when ‘push comes to shove’ there’s only one ground force that could compete with the EU, and that’s China.

 

They've broken many agreements and treaties to get this far. And you are convinced they are no threat because you've made another agreement with them?

 

I’ve never said I’m convinced about anything involving Iran. I am confident in my leaders abilities to gain a resolution to this problem though.

 

You are the one who has been brain-washed, not us. Seriously, you've had "War is never the answer" pushed down your throat so much that you are pretty much ignoring everything we've learned from dealing with these people in the first place.

 

It’s called facts. I’ve looked at the facts, and determined like thousands of others than invading Iraq was the completely wrong decision. Why can’t you see that your government completely changed its cause for war AFTER they invaded the place?? Why aren’t you angered that your fellow countrymen, and people in Iraq and from other nations have been killed because of this illegal invasion that caused the world to be on knife-edge? You don’t honestly buy the bull-crap that the world is a safer place do you? Like I said before, not one person on God’s green earth can say that the planet, is safer since Bush invaded Iraq because the fact of the matter is, it’s much more dangerous and unpredictable, particularly the western world, whether you’re a Bush supporter or hater, there’s no getting around it.

 

I mean, the people you sent in to check on their nuclear program didn't actually check them out, they just took their word for it. Wow, I really have faith in these guys.

 

That’s simply not true.

 

God help you when someone invades Slovakia and the motion to defend it fails 4-6 because no one wants to commit their troops to some foreign war. 

 

The right decision will always be made, because I have confidence in the Union. I could see the argument if it wasn’t for the fact that people have a conscience, people know what’s right and people know when things need to be acted upon. If force is needed, it will be used, but only as a last resort.

 

Dude, that's a joke. You do understand that Europe isn't producing enough food to sustain it's population, right?

 

What do you think this is the 3rd world? Europe can be totally self-sufficient, why do you think the whole trading block was put in the place in the first place? Some produces can be gotten cheaper elsewhere, but bottom line is, EU countries have more than enough recourses to provide for themselves.

 

That's a pretty shitty comparison because you actually missed what Bush was trying to do. He wasn't trying to get people to buy US steel, he was just trying to gain the Steel worker vote to do better in places like Pennsylvania.

 

And why was any vote in jeopardy in the first place? Because people weren’t buying American steel, and how did Bush try to solve this? Increase tax on EU steel. Your statement is a reflection of my exact sentiments.

 

You also misinterpret why Bush backed off. He was doing it as a campaign ploy. Had he really wanted to, he could have put higher tarriffs on all European products as well. Why try going into a prolonged trade war over a campaing ploy

 

Or to put it another way, why risk damaging an area of the economy further, when he could just back off and not do it again.

 

Once again, I haven't heard ANYTHING regarding a healthy economy from Europe. All I've heard is. If you have any actual proof, then I'll gladly accept it.

 

Really, I mean you seem to have this mindset that Europe is some sort of 3rd world place, when in actuality; it’s one of the most thriving and growing economies in the world, with people being head-for-head on higher salaries generally than anywhere else on the planet. And where have you heard of ‘malaise’ from the European economy? Isn’t that a bit strong for ANY industrialised world economy, let alone one of the largest?

 

Well, as a rule they pay about 40% more in taxes each year. Sweden had to restructure after their income tax reached something in the area 70% at one point. Of course, smaller European cultures deal with smaller populations, which makes it easier to manage. For what the US has, the US does it best. People in America have interesting lives as well, I'd say. There's certainly a vast diversity in them all, that's for sure.

 

That is true about taxes, however those countries actually do see the benefit of paying those taxes for the most part, the EU's pention scheme at the moment is the most admirable in the world. However I have to point that that does not include Britain. At the moment the British working class pay more taxes percentage wise tahn the middle and upper classes, and considering Britain is completely dependant and driven on the working class that brings up a lot of issues.

 

You miss the fact that most of these countries are under 20 Million people. It's not that hard in comparison to a larger country to be an easier place to live in. Considering that America has around 230,000,000 more people and still is able make it into the top 15 is a bigger accomplishment than any of them making it into the top 10.

 

That is true for the most part, but remember that Britain, while having the 4th most powerful economy in the world, considered the second most powerful nation overall after America and has a population of only 55 Million only got to 27th on this list. Culture really does have a lot to do with it, the European nations on that list have a reputation for having very laid back cultures, more relaxed than the stressful culture that most of the western world adopts.

 

It wasn't just Chirac, it was a few countries and the UN itself. But places like Germany and Italy are horrible when it comes to politics. The Greens have such a stranglehold on the Democratic Christians in Germany that you'd think THEY were the one in power and not the smallest part of the electorate. Italy's politics are the biggest joke ever. They have so many parties that coalitions don't last more than a few months or a year, and their governments are never able to get anything done due to so much infighting. 

 

That's what annoys me sometimes when the French Govt always resorts back to calling the War illegal because the U.N didn't sanction it, however I might add that one of the reasons it's wasn't sanctioned was because of a French vito, but anyways France and other countries had been doing dealings with Iraq, under U.N sanctions, making them rather hypocritical. I refuse to believe that there is one decent inch on Jack Chirac's body, maybe it's just an aura emitted from damn near facists. I mean I'm not saying two wrongs make a right, I personally think going against the U.N is never a good move because if we are going to fight these terrorists at least we should fight them in a way we can all agree on and fight united.

[Vyce 0]

He wasn’t the first time around, since the election was fixed. If it was carried out fairly, Al Gore would be sitting in the white house and America would still be best financial friends with everyone.

 

Oh Jesus.

 

There really is no hope for Jason here. Not only is he dead-wrong - he's living in some sort of bizarre, delusional world as well.

 

That's what annoys me sometimes when the French Govt always resorts back to calling the War illegal because the U.N didn't sanction it, however I might add that one of the reasons it's wasn't sanctioned was because of a French vito, but anyways France and other countries had been doing dealings with Iraq, under U.N sanctions, making them rather hypocritical. I refuse to believe that there is one decent inch on Jack Chirac's body, maybe it's just an aura emitted from damn near facists.

 

Oops! Maybe I spoke too soon. I suppose there is one tiny little sliver of hope for the lad.

[Stephen Joseph 0]

Economics, the answer to most everything.

 

Quickie comparision and constrast as per requested, courtesy of the CIA World Factbook. Check it out yo.

 

France

Purchasing Power Parity - 1.661 trillion

GDP real growth rate .5%

GDP per capitda $27,600

Unemployment 9.7%

Inflation 2.1%

 

United States

Purchasing Power Parity - 10.99 trillion

GDP real growth rate 3.1%

GDP per capitda $37,800

Unemployment 6.0%

Inflation 2.3%

 

Wow. France is sooo much better

[kkktookmybabyaway 0]

Again, you miss the fact that most of these countries are under 20 Million people. It's not that hard in comparison to a larger country to be an easier place to live in.

 

Also couple that with the fact if the U.S. adopted the immigration policies that some of these countries have, there would be an uproar by the same people that want us to be more like those nations.

 

In addition, when was 0.8 percent economic growth something that should be applauded? I'm no economic wiz but if Bush ran on numbers like that he would have crashed and burned. Although here's a question: Seeing how the U.S. has so many more citizens could that be a reason France's low growth numbers isn't as bad as it looks because if France had that growth rate there wouldn't be enough bodies to fill those newly created jobs?...

[Stephen Joseph 0]

and oh, about the weak dollar.

 

If the Euro gains strength against the dollar, American goods are relatively cheaper now in Europe vs. European goods (relative here, not absolute) and European goods are now more expensive relatively in the United States.

 

What this means: Europe imports more from the US, thus stimulating our economy, while pulling theirs down. Having a strong currency does not mean a strong economy, it just means your stuff is more expensive than other peoples stuff.

 

Bottom line: Currency valuations are a flow, not a stock variable. And like any flow, there are times when it is high, and times when it is low. Currency valuation is a market mechanism for CLEARING MARKETS, and has very very very little to do with the strength of a nation's economy

 

But then again, I'm just a dirty American government economist.

[Slayer 0]

Economics, the answer to most everything.

Because economists try to spin everything into a positive manner, somehow

 

"Weak dollar is bad? No, it can be good!

 

High taxes are bad? No, they can be good!

 

Foreign countries not buying our shit is bad? No!"

 

And so on

 

I talked about that with my econ professor the other day, he got a chuckle out of it and told me Harry Truman's quote about a "one-handed economist" (which I imagine you know about)

[Stephen Joseph 0]

Oh yeah, I know the joke.

 

But, what you learn from economics is that there are always trade-offs, which is why we appear so one-handed sometimes.

 

Hey, better to be a optimist than not ya dig?

[Big Ol' Smitty 0]

More on weak dollar from Economist.com

 

over the next few years it seems an excellent bet that there will be a large drop in the dollar. Since mid-October the dollar has fallen by around 7% against the other main currencies, hitting a new all-time low against the euro and a five-year low against the yen. The dollar has lost a total of 35% against the euro since early 2002; but it has fallen by a more modest 17% against a broad basket of currencies....

 

 

 

Markets have been rattled by concerns that foreign central banks might reduce their holdings of American Treasury bonds. Last week, officials at the central banks of both Russia and Indonesia said that their banks were considering reducing the share of dollars in their reserves. Even more alarming were reports that China's central bank, the second-biggest holder (after Japan) of foreign-exchange reserves, may have trimmed its purchases of American Treasury bonds... might the dollar lose its reserve-currency status? Over the past 2,000 years, the leading international currency has changed many times, from the Roman denarius via the Byzantine solidus to the Dutch guilder and then to sterling. The dollar has been the dominant reserve currency for more than 60 years, delivering big economic benefits for America, which can pay for imports and borrow in domestic currency and at low interest costs.... The requirements of a reserve currency are a large economy, open and deep financial markets, low inflation and confidence in the value of the currency. At current exchange rates the euro area's economy is not that much smaller than America's; the euro area is also the world's biggest exporter; and since the creation of the single currency, European financial markets have become deeper and more liquid....

 

 

 

Those bearish on the dollar are asking why investors will want to hold the assets of a country that has, by its own actions, jeopardised its reserve-currency position. And, they point out, without the intervention of central banks, which have been huge net buyers of dollars, the dollar would already be lower. If those same central banks were to begin to sell some of their $2.3 trillion dollar assets, then there would be a risk of a collapse in the dollar....

 

 

 

The [trade] deficit is at the heart of this issue. Various economists have put forward at least four arguments why the deficit does not matter and the dollar's reserve status is safe. First, the deficit is a sign of America's economic might, not a symptom of weakness. Second, sluggish demand overseas is a big cause of the deficit, so it is reversible. Third, the deficit exists largely because of multinationals' overseas subsidiaries. And fourth, central-bank demand for dollars creates, in effect, a stable economic system. It is not difficult to demolish each argument in turn....

 

 

 

Worse still, in recent years capital inflows into America have been financing not productive investment (which would boost future income) but a consumer-spending binge and a growing budget deficit. A current-account deficit that reflects a lack of saving is hardly a sign of strength....

 

 

 

For almost two decades, economists have worried about America's current-account deficit and predicted a plunge in the dollar and a hard landing for the economy. The dollar did indeed fall sharply in the late 1980s, but with few ill effects on the economy. So why worry more now? One good reason is that the current-account deficit, currently running at close to 6% of GDP, is almost twice as big as at its peak in the late 1980s, and on current policies it will keep widening. Second, in the 1980s America was still a net foreign creditor. Today it has net foreign liabilities and these are expected to reach $3.3 trillion, or 28% of GDP, by the end of 2004 (see chart 2)....

 

 

 

America has enjoyed another huge advantage in its ability to borrow in its own currency. A normal debtor country, such as Argentina, has to borrow in foreign currency, so while a devaluation will help to reduce its trade deficit, it will also increase the local currency value of its debt. In contrast, foreign creditors carry the currency risk on America's $11 trillion-worth of gross liabilities....

 

 

 

In any case, the current-account deficit cannot be corrected by a fall in the dollar alone: domestic saving also needs to rise. The best way would be for the government to cut its budget deficit.... Sterling maintained a central international role for at least half a century after America's GDP overtook Britain's at the end of the 19th century. But it did eventually lose that status. If America continues on its current profligate path, the dollar is likely to suffer a similar fate.... if America continues to show such neglect of its own currency, then a fast-falling dollar and rising American interest rates would result. It will be how far and how fast the dollar falls that determines the future for America's economy and the world's. Not even Mr Greenspan can forecast that.

[Stephen Joseph 0]

Wow. So you cited the Economist. Thanks, reading the whole articles proves the point Tyler first made and I re-voiced...It's the debt, not the falling dollar, at issue here.

[Big Ol' Smitty 0]

No problem.

 

The other interesting thing from the article, I thought, was its questioning of the future of the dollar's reserve status.

[Stephen Joseph 0]

which again relates to the debt issue.