Re: Who is buying dollars, or is the US economyt coming to a grinding halt ?

Michael Coburn <mikcob@xxxxxxxxxxx> wrote
Rod Speed wrote
Michael Coburn <mikcob@xxxxxxxxxxx> wrote
Rob Dekker wrote

I'm new here, so forgive my ignorance. Why is the dollar getting so strong ?

I can only say that in a worldwide panic (and that is what we have)
people seek safe harbor. The housing bubble came and went, the
oil/commodity bubble the same. All the players are putting their
franks and euros and pesos and yen into dollars because they
have no safer harbor. The dollar stinks, but it stinks less.

Mindlessly silly. If that was what was happening, they'd be putting
their money in the countrys that havent seen any banks imploding,
and they clearly arent doing that.

You're just another fool that can spout the economic
jargon, but doesnt have a fucking clue about the basics.

This is really stupid.

We'll see...

The moron believes that the currency is actually tied to the bank.

Wrong, as always.

The dollars are held in ALL THE BANKS.

Irrelevant to which country's banks they'd be putting their money in if they wanted safety.

The oil is still traded in DOLLARS.

Doesnt explain the big sag in the USD and the current improvement in its value.

If and when there is a different "reserve currency" and if and
when oil is traded in something other than dollars on a world
wide basis, then you might have some sort of leg to stand
on as you criticize my understanding of the fundamentals.

Never ever could bull*** its way out of a wet paper bag.

There will be a much larger commodity bubble.

There in no commodity bubble.

The reason commodity prices have dropped significantly is because there
is quite a bit of evidence that the credit/liquidity crunch will produce at
least a world wide recession and maybe even a full depression.

The oil price as measured in dollars has produced a destabilization in the real world economy.

Doesnt explain the big runnup in commodity prices and then the drop in those.

But prior to that, here in the USA we had a tech stock bubble
and then a much more severe housing bubble and that
is a very large part of what caused the commodity bubble.

There is no commodity bubble.

Unlike the silliness of the prices of shares of stock and the
ridiculous run up in real estate prices, the rise in oil prices
had/has a major effect on the cost of actual production.

The oil price affects a hell of lot more than just the cost of actual production.

Such was the economic "shock" that caused the current slowdown/panic.

Thanks for that completely superfluous proof that you have never ever had a fucking clue about anything at all, ever.

The ridiculous oil prices were caused by money seeking safe harbor after the housing bubble

Pity the oil price peaked LONG before the housing bubble went bang.

and now the economies of the world have actually been damaged.

Not by the oil prices they havent.

The money has no place else to run.

Thanks for that completely superfluous proof that you have never ever had a fucking clue about anything at all, ever.

We have people and institutions with more money than they
can find any use for and they will simply keep it; nice and
safe in a true bank that does nothing other than store money.

And only a fool would try to pick one of those in the US currently.

Anyone with a clue might go for US treasurys instead.

Amidst all the financial turmoil in the US banking system, US
government sticking itself deeper than ever into debt, the nosediving
stock market, and the prospects of a stalling economy, you would
think that few people abroad have much confidence in the US dollar.

Still, the dollar rose 6% in the time since the *** hit the fan in
September and even more since it's low point in July. It even rose
2% in the last two days. The US dollar is now stronger than it has
been since Jan 2007. Oil prices (linked to the dollar) drop accordingly.
The Euro drops the most, but the Yen seems closer linked to the dollar.

What on Earth is happening ?
I'd like to know if this is a short-term effect, or if there is some structural effect happening.

One explanation is that foreign investors (Chineese or Saudies?)
are buying up dollars by the billions, but that seems bizarre.
They for sure don't invest in the US stock market, nor are they
buying realestate. This seems to affect only the currency exchange
rates, and the international commodity prices, so it must be a cash
flow issue. What reason would foreigners have to buy cash dollars ?

I had macro-economics in high school, but that's a long time ago. I
have forgotten what the relationships are between currency exchange
rates, inflationary and deflationionary effects, interest rates and
debt/assert ratios.

So I have to rely on common sense.

The only common sense explanation for such a steep rise in the
dollar in such a short period of turmoil seems to be that
possibly the US economy is actually stalling. When businesses do
not have short-term money, they will start by reducing their
inventory. Just cancel an order for new (foreign) goods, or stop
buying oil (and rely on the short-term reserves). That means that
dollars will not flow out of the US as fast as it normally does,
which means that from abroad it looks like the US is not consuming
anything. That means that there will be a shortage of dollars
abroad, which means that the dollar rises in value.

Does anyone have a better explanation ?

There is no shortage of dollars. The Fed can, and will (if the Fed
does not wish to be stormed as the Bastille) monetize a lot more
debt at ridiculously low interest rates. But so too will the foreign banks.

More utterly mindless silly ***.

The entire world has been indulging in "stupidity economics" for the last 30 years.

Yeah, yeah, and only you have seen the light eh ?

I never went into the darkness....

You've always had your *** in your hand.

Thats why you're now completely blind.

"stupidity economics" is called "supply side economics"
so as to appear to be something other than stupid.

A hell of a lot of the real world hasnt been into supply side economics, fool.

Yet the world's largest economy HAS been.

Irrelevant to the rest of the world.

It is has been aided and abetted by neoclassical non-economists.
The reality is that the dollar denominated assets of the world are
horrendously overvalued as measured in dollars and in labor.
And the only rational cure is a much further dollar devaluation
against commodities such as oil and metals and real estate.

Taint gunna happen, you watch.

Yet such a claim is irrelevant to the efficacy of the thesis.

There in no 'thesis', just your desperate pig ignorant wanking.

The rest of the currencies will follow. The world should have
learned a lesson from this but they have not done so yet.

And it wont ever, you watch.


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