S.Korea warns of weakening dollar

http://feeds.bignewsnetwork.com/?sid=e3806109948a0c42



Big News Network.com Thursday 10th March, 2005 (UPI)

South Korea on Thursday called for concerted international actions to counter the U.S. dollar's weakness.

Officials warned the weak dollar could damage South Korea's economic recovery.

The calls came as the dollar plunged more than 1 percent at midday to an eight-year low of 989 won, breaking through the psychologically important 1,000-won level
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Bush is not just destroying our economy but he's taking our allies with him!!!

but george does not care to fix any of the fundamentals

to him about fiscal responsiblity.

our allies are all going to switch to Euros soon, and we're going to be in deep doo doo.

Just my two cents.

...for pennies on the Dollar:evilfrown:

said the freepers.

If our dollar is worth nothing soon, say 2 cents, isn't that a good thing for me? Like most Americans I'm in debt up to my ears. The way I look at it, if the dollar drops in value too far we will have rampant inflation. For heavily debt laden people inflation is a gift from heaven, right? If I owe you 300k on my mortgage and suddenly 300k can only buy you a hot dog, I'll just mail the price of a hot dog to my mortgage company and call it even: thanks for the free house.

It seems to me rich people have alot more to be worried about with inflation because they actually have cash or assets tied to cash. The entity that lent me the 300k could have bought a house and owned an asset that would be priced relative to the price of the currency, i.e. if it takes 1 dollar to buy a hot dog then the house may be 300k times that. If it takes a wheelbarrow full of dollars to buy a hot dog, a house will still be 300k wheelbarrows of dollars so you really haven't lost anything owning an asset. Instead they decided to lend the money for a profit that now is meaningless since by the time the loan is over the original investment of cash and the interest are now almost worthless.

The same thing goes for the govt itself. Right now we owe 8 trillion or so. If we let the dollar go down in value then aren't we basically scamming the people who lent us the money? Aren't those people who have money to lend....... the rich? In the above scenario with the house, I'd certainly be happy about inflation. My mortgage company doesn't care because they can pay their investors just what they promised to. Only Richie Rich is crying.

The reason I titled the post "educate me" is because it all sounds too good to be true from my point of view. It would however explain why the rich fight against inflation so hard: it would be the great equalizer. I know there is an obvious flaw in my logic, I'm just not having any luck finding the clouds because all I see is silver lining for me. Someone beat some sense into me. :)

how are you going to buy the hotdog?

:shrug:

I'll give you that. But no-one would work if their week's earning's couldn't buy a hot dog. When inflation strikes, wages and prices both go up. My parents bought their house for 12k in 1960, By the time it was paid off in 1990 their mortgage was quite literally a joke due to inflation in the general economy and in the housing market in particular. Wages may have lagged behind the inflation at times but over the long run they benefited greatly from inflation.

The entity that lent them 12k in 1960 could have just bought the house and in 1990 sold it for the going rate which was about 200k(now 400k, its crazy here). Instead they chose to lend the money at 6% for 30 yrs and made 25,900 bux or so in payments of 71.92 a month for 360 months MINUS the 12k they gave my parents in the first place. Inflation made a huge difference and it was all in the buyers favor. At the same time that inflation is raising the price of your house it is also devaluing your loan and making it easier to pay off.

NO, Hyper Inflation is NOT a good thing, especially because the fact that almost everything we buy, other than Milk and Bread, is made OUTSIDE the country. In your example, with the Dollar only worth $.02, That would make a barrel of imported Crude Oil about $300.00 a barrel, which would send Gasoline Prices to about $5-$7 dollars a barrel!

What you seam to have left out in your equation, is that wages can NEVER keep pace with this type of Hyper inflation (unless you are paid in Euros or Pounds or something other than Dollars). With Hyper inflation, EVERYTHING goes up FAST, you got $500.00 hanging around to buy a loaf of Bread? Or $650.00 for a Gallon of Milk?

Yes, your $300,000.00 house suddenly seems less expensive, but just try to sell it and buy a new one, that now cost $500,000,000.00, after you spend $200,000.00 to re-paint it yourself.

Your Rosie scenario, would mean Total Global Poverty.:crazy:

interest on the US debt causing further deficit. It will cost a great deal to buy a loaf of bread, gas for your vehicle, electricity, etc, because the US is a nation of importers and no longer a nation that manufactures.

The US dollar will be a US dollar in the US only but the cost to import goods will skyrocket.

The rich will not suffer because they have their money in foreign accounts and in foreign currency, they will be buffered from the fall in the dollar, everyone else will pay the price.

Normally, the decline in the dollar would cause the US public to buy products manufactured and produced domestically which would reduce the trade deficit, strengthen the manufacturing sector due to increased domestic demand versus foreign product demand but, given the US is, by and large, no longer a manufacturing country but a service (McDonalds, Walmart, etc)this will no longer apply, imo.

You're making the HUUUUUUGGE assumption that your wages will keep pace with inflation. If you are in a union that has collective bargaining rights, then maybe your wages would keep pace. But if you're not in a union, trust me, they won't. Your wages will remain stagnant whilst everything else around you skyrockets in price. You will find it hard to afford even your most basic needs (see gas prices, food, medical care, etc.) And, thanks to the BK bill, you won't be able to discharge your debts.

As for "scamming the people that have loaned us money", you're making another HUUUUUGGGEE assumption that they're a bunch of dumb f*cks who cannot figure out for themselves that we're inflating our way out of our debt. They know what we're doing, and they will take action. That's why you're seeing this rash of articles from various finance ministers from around the world complaining about the dollar.

People won't loan you something of value unless they will receive of greater value in return. If we don't offer something of greater value than our dollar, people won't loan us money which will mean that we'll have massive budget cuts AND massive tax hikes just to keep our government running.

tends to crash too

Signs that this is occuring are all over the place including higher banrupcy rates and a weakening dollar

Where a weaker dollar helps (to a point) is to belance the trade imbalance as our goods are cheaper than european goods... but even that one has a limit and we went over that limit a while ago.

No this is not a good thing... for an exmaple of waht hyperinflatioon can do and how it will wipe out your savings, look at photos of Weimar germany and her people taking large bags of cash to buy a loaf of bread.

complex? Oh, health care, big pharmceuticals?

We have nothing we are producing but in limited, very small, niche market quantities, except for the arms and war market, along with gas and oil. Take a walk back to the early 1900's and the "robber barons", then go a little further into the bankers. The Fed Reserve, who are they? Tell me once again?

Some great points. I am only looking at it from my selfish point of view, and yes my income is tied to inflation so I'd be safer from its perils than those who have to fight it out every year with their boss about inflation.

""""No this is not a good thing... for an example of what hyperinflation can do and how it will wipe out your savings, look at photos of Wiemar Germany and her people taking large bags of cash to buy a loaf of bread.""""


Actually, the reason I posted this thought today is because I was thinking of my grandmas tales from that period. She lived in Nuremberg growing up and was there for the "wheelbarrow of money for a loaf of bread" period. Her dad was a shoemaker with 9 kids who was heavily in debt for his store and the inflation saved him. People still needed shoes and paid the going rate as prices rose each week but his debts simply vanished. It was very hard on banks because everyone who had debt was just paying off everything they owed and laughing at the foolishness of it all. Most of the hysteria came from the rich lenders who lost their asses. Overnight their vast fortunes could be equaled by a guy making shoes and they hated it and saw the govt was overthrown which she used to say was a big part of what made the Nazis so popular with the money crowd later on: they always took care of business and the rich.

I was about 15 when she told me all that and I remember badgering her with questions about how the poor must have suffered so horribly but she would have none of that and was quite blunt that it was only seen as such a tragedy because the rich were hurt. The two guys working for her dad in his shop would just negotiate their wages daily with him so they would have enough to be able to buy what they needed and it was common practice everywhere. Her contention was that it was no better or worse for the poor since what difference does it make if a loaf of bread is a penny or a million dollars if you have nothing.

I'm not advocating rampant wild inflation, I was just pointing out that it will hurt the rich more than me so for once in my life I'm not going to worry about something because I'm sure the rich will find a way to take care of it. As for wiping out my vast savings.....lol......buying a candy bar can do that.

and any securities pension funds are invested in would become worthless, whether government or private pensions, and whether invested in government or private securities.

"The rich" was anybody that didn't live hand-to-mouth, and the very rich moved their money abroad.

hot dog while we take your house and everything in it. Welcome to your new world, courtesy of the new "bankruptcy bill".

You are truly confused and beyond being educated by anyone. There are more flaws in your logic than I can even begin to address. And yes, you do need to be beaten senseless into sanity.

but that is mostly because their form of education is to call me an idiot until I agree with them. I usually learn better in environments where everyone shares their point of view on something and then I compare my perception of reality to theirs and see where mine may need or not need some modification based on new info/concepts/point of view.

PS- I always love when people say things like, "There are more flaws in your logic than I can even begin to address". If you lack the ability to address the flaws in my logic, how can you be sure the logic is flawed?

Sorry if I insulted your intelligence and sensitivities. Truly, good luck, dear sir or madam.

I don't have the time to spend ...but, I can address the flaws in your logic all day long and into the night. I care not to. The links and all are here for you to look into. Quit shooting off your useless cannon.

Once again, I suggest for you, www.moneyfiles.org

just one place for you to start.

Buy Euros instead...A Conservative would do that.......

start doing exactly that

n/t
Have you not read enough here yet?

go to

www.moneyfiles.org

...and Silver (Canada's Gold coins are excellent quality .9999 fine) or just invest in Canadian companies or put the money in a Canadian bank (that has an ATM network here in the U.S. too).:hippie:

By the time * and the neo-cons figure out that the problem is snowballing into an avalanche, it will be too late to stop the economic collapse.:argh:

dollar just reached a 23 year high against the US$. Now, slowdown in exports are having the effect of workers beginning to be laid off here. Lets see .... 23 years ago .... ah yes, back to the Reagan years.