Not only is Steve out of date with measurements, he is out of date with economics as well.

http://www.apfn.net/messageboard/4-21-03/discussion.cgi.23.html

You can read the entire article here, but I will only post an excerpt. Now, before anyone says the article is old (it is from April of 2003), I will remind them that the economic policies are what is practiced today.

Why is the dollar still strong? Well, the elites understand that the strength of the dollar does not rest on our economic output per se, as our historically high trade account deficit (almost 5% of GDP) and $6.3 trillion dollar deficit (55% of GDP) are factors that would devalue the currency of any nation under the “old rules.”

The truth is that the strength of the dollar rests on being the reserve fiat currency for global oil/energy transactions (ie. “petro-dollar”). The U.S. prints fiat reserve dollars, hundreds of billions of these petro-dollars are used by all nation states to purchase oil/energy from OPEC producers (except Iraq and Venezuela, and perhaps Iran in the near future). These billions of petro-dollars are consumed by oil-consuming nations, and re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. (this is item #3 on the above list on how to end U.S. hegemony)



Here Steve, think of this when you blow about the UK/US economy vs the EU economy. See what really maters in the grand scheme of things! FIAT CURRENCY! The country(ies) whose currency is the FIAT CURRENCY is the country that rules the world. All the other factors are minor.


The “old rules” for valuation of our currency were based on our flexible market, per worker productivity, trade exports and manufacturing output, free flow of trade goods, established and transparent accounting methodologies, proper government oversight (ie. SEC), and of course profitability, total cash flow, etc. While many of these factors remain present, over the last twenty years our economic structure has broken some of these principles. Despite the numerous technical weakness in the U.S. economy from an export/trade account deficit perspective, and related issues of debt, the dollar as the fiat oil currency has remained strong, creating “new rules”.



Since the euro has become much stronger since the article was written it means that investors and governments world-wide are divesting themselves of dollars and investing in euros. Thus the dollar is losing its hegemonic status. If the US economy does not receive an infusion of foreign held dollars at a rate of 1.5 G$/day, the burden of the deficits will for sure collapse the US economy.


Get with it Steve! Come into the 21-st century with "new" thinking and leave the "old" thinking behind.

Maybe Steve and the BWMA can start a "Save the dollar" fund. They can only accept euros. When they get enough euros, they can sell them all at once for dollars. The euro should plummet. Then with the dollars they bought they can offer them as a gift to the US treasury (for being such a staunch imperial supporter) and pay off the entire US debt.

You'd all be heros! Wouldn't you like that?

Here we have two individuals that live thousands of miles from the EU telling us that the US economy is - well basically - a "load of rubbish" and that no-one in the world takes note of the dollar and no country in the world is affected by the US economy!

This is diamond stuff!

In the same breath these two individuals praise an area of the world which is suffering a sluggish economy where even this week the EU rules were broken so that France's figures wouldn't leave them to be "punished" (unlike poor old Portugal).

STERLING stuff fellas! Keep it up!

P.S. Jason - its bad netiquette to personalise the message title on boards - personally I don't care as it leaves you looking though you're full of vendetta. Try to remember that you're not on Metricsucks now - remember that you lost the argument there whereas you're only "losing" the argument here!

:)

Some people just have a hard time accepting that whether they like it or not, the U.S. dollar is the single most important currency in the world.

Some people just have a hard time accepting that whether they like it or not, the U.S. dollar is the single most important currency in the world.

***** I'm not going to deny the fact that the dollar is the worlds #1 reserve currency.

Up until the euro became a bona-fide cash currency in 2002 never was the dollar's importance challenged. The euro is destined to compete with the dollar on a hegemonic basis and strip away much of that importance.

Washington and Wall Street's greatest fear is that OPEC and other oil producers will either fully or partially switch their oil currency to euros.

For the past two years, central banks around the world have been divesting themselves of dollars and adding euros to their portfolios. The main reason the dollar has been falling is due directly to the world-wide sell off of dollars.

This is bad for the US. The US economy depends heavily on the dollar being an unchallenged currency used as a reserve currency world-wide. Without it, the US can not keep its economy afloat.

The US economy grows only when money invested in its institutions goes to buy new things. Production and consumption of new things generate growth. The US relies on foreign investors to buy bonds to fund the deficits created when Americans purchase and consume things without having the money to pay for them. As long as someone is willing to pay American debts, the American economy can continue along that line.

And it has for decades, as there was no real opponent to the dollar to divert foreign investments away, at least not on the long term. Well, that opponent has arrived. And that opponent is the euro. The euro is sucking investment out of the US and into other markets. Eventually, the US consumer will have to pay his own debts and will no longer be able to rely on someone else.

Nothing lasts forever. And that includes the position and power of the dollar. The dollar will just have to get use to sharing its hegemonistic status with other currencies. For now it will be the euro. In the future, expect more currencies to join the ranks.

re: "The euro is destined to compete with the dollar on a hegemonic basis and strip away much of that importance.

Washington and Wall Street's greatest fear is that OPEC and other oil producers will either fully or partially switch their oil currency to euros.

For the past two years, central banks around the world have been divesting themselves of dollars and adding euros to their portfolios. The main reason the dollar has been falling is due directly to the world-wide sell off of dollars.

This is bad for the US. The US economy depends heavily on the dollar being an unchallenged currency used as a reserve currency world-wide. Without it, the US can not keep its economy afloat".

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REPLY: I'm not an expert in these matters but I tend to accept the above analysis. It would be churlish not to acknowledge the euro's current strength on the day when it topped $1.20 to the euro. There is, after all, very heavy investment in the whole European project by the big players in Europe and indeed the world. The success of the euro will be a big factor in pursuing their 'dream' [nightmare for some of us] of European integration.

I agree that the U.S.A.'s economy, although growing again, *is* vulnerable due to its high trade deficit.

The interesting thing is:- what does this mean for Britain?

Judging by the practical effects of adopting the euro to date - sluggish economies, higher unemployment, much lower inward investment, inability to set flexible interest rates for different member states, currency volatility against other currencies, having its two major players (France and Germany) using their clout to persistently break Growth and Stability Pact rules etc., the euro appears to be *good* news - for the United Kingdom!

Even better, the current high value of the euro is making their exports expensive and hampering their attempts to revive their export markets.

Long may the eurozone countries keep their 'single currency' and leave the successul northern European countries of the U.K., Norway, Sweden, Denmark and Iceland to carry on blossoming without it