Is It Time to Bail Out of the US?

"The dollar may fall below 75 yen next year as it becomes the world’s “weakest currency” due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co."

http://www.bloomberg.com/news/2010-...st-currency-drop-to-75-yen-jpmorgan-says.html

The US is probably not going to "reduce" the deficit. I'll be surprised if they can even "freeze" spending levels. Printing currency is the "solution" that will (obviously) result in inflation (possibly well into the double digit level). Of course additional seizure of wealth (taxation) will be necessary, with a national sales tax (VAT) and perhaps a Federal Wealth Tax similar to the one in Argentina (to get the $$ out of the hands of the hoarders and the "evil" rich). The confiscation of gold (from everyone) by an executive order of the president is also a possibility.
 
steveinbsas said:
"The dollar may fall below 75 yen next year as it becomes the world’s “weakest currency” due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co."

http://www.bloomberg.com/news/2010-...st-currency-drop-to-75-yen-jpmorgan-says.html

The US is probably not going to "reduce" the deficit. I'll be surprised if they can even "freeze" spending levels. Printing currency is the "solution" that will (obviously) result in inflation (possibly well into the double digit level). Of course additional seizure of wealth (taxation) will be necessary, with a national sales tax (VAT) and perhaps a Federal Wealth Tax similar to the one in Argentina (to get the $$ out of the hands of the hoarders and the "evil" rich). The confiscation of gold (from everyone) by an executive order of the president is also a possibility.
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Well, it sure does look like the USA is in deep doodoo.

I asked you if you believed Obama is responsible for the current economic mess. You didn't answer. I understand that one could infer as much from your previous post labelling him as "spender in chief", but I wonder whether you would confirm it...and maybe reply to my observation that such thinking is unsupportable since he inherited an unbalanced budget (running an annual deficit of 1.3 trillion) created by the Bush tax cuts and criminal wars. And that both parties currently support further short term deficit spending to ameliorate the recession we are in.

How would you seek to reduce the deficit if not by increasing govt revenue? Do you believe that all taxation is "seizure of wealth" that is unjustified by government no matter how it is accomplished? If so, how would you propose the government obtain the resources to run its programs? Or should the country just abandon the army forces, social security, medicare, education grants, infrastructure and energy programs, post office, etc.?

Where would you cut federal spending? Would you favor withdrawing all US troops from Afghanistan and Iraq? What about increasing retirement age to 70 and decreasing medicare benefits? Would that be preferable to permitting taxes on the upper 2% of US taxpayers to revert, as originally enacted, to the levels they were at prior to the Bush tax cuts?

Don't you think that allowing the Bush income tax cuts for the rich to expire makes sense in view of the tremendous deficit? Do you sincerely believe that those people who favor taxing the superrich in order to fix the fiscal problems really believe rich people are "evil"? Or is that just some half-assed sarcasm aimed at people who favor such a proposal?

Do you think it is fair that hedge fund managers and investment bankers at Goldman Sachs pay a smaller % of their multi-million $ incomes (taxed at lower cap gains rates) in income taxes than do cops, teachers, assembly line workers etc earning annual salaries a miniscule fraction of what those Wall St types earn in a month?

Do you think a national sales tax covering such items as clothes and other staples is fairer than an increase in a progressive income tax? Are you so rich that you support decreasing the tax burden on the very wealthy? If not (as I am led to believe) why do you support tax programs that would be against your own best personal interests and the interests of 98% of Americans who won't benefit from the renewal of the Bush tax cuts?

Please let us know what you think Steve (other than that you don't like me).
 
I am never going to live in the USA again, but I do care what happens there. I am never going to run for any kind of political office but I do hope one man (who I've never mentioned here) will continue to do so, unless it's already too late.

Here is his website: http://www.ronpaul.com/
 
Interesting essay by Michael Hudson:

This is the key dynamic of today’s finance capitalism. It loads down economies with debt – and when debt service exceeds the surplus out of which to pay it, the central bank tries to “inflate its way out of debt” by creating enough new credit (“money”) to make real estate, stocks and bonds worth more –enough more for debtors to borrow the interest due. This is the deus ex machina, the external influx of credit enabling financialized economies to operate as Ponzi schemes. The dynamic is encouraged by taxing speculative (“capital”) gains at a lower rate than wages and profits. So why should investors finance tangible capital investment when they can ride the wave of asset-price inflation. The Bubble Economy turns into speculative “wealth creation.”

Can it work? How long will gullible investors bet on a pyramid scheme growing at an impossibly exponential rate, enjoying fictitious “wealth creation” as bankers load the economy down with debt? How long will people think that the economy is really growing when banks lend to an economy overseen by regulatory agencies staffed by ideological deregulators?

The bankers’ ideal is for the entire surplus over and above bare subsistence to be paid in the form of interest and fees – all disposable personal income, corporate cash flow and real estate rent. So when the Fed’s QE lowers mortgage interest rates, will this enable homeowners to pay less – or will it simply increase the capitalization rate of existing rental value?

The Fed’s cover story is that QE benefits homebuyers by reducing the debt they must take on. But if this were true, their gain would be the banks’ loss – and the bankers are the Fed’s main constituency. To the Federal Reserve, the economic “problem” is that falling (that is, more affordable) housing prices are killing the balance sheets of banks. So the Fed’s real goal is to re-inflate the real estate bubble (while spurring a stock market bubble as well, if it can).
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And the way QE2 is being received abroad:

The plunging-dollar standard of international finance is being wound down as fast as other countries are able to replace the dollar with currency swaps among themselves, led by the BRIC countries (Brazil, Russia, India and China). South Africa has just joined these countries as a fifth member, and oil exporters from Nigeria to Venezuela and Iran are associating themselves in the attempt to make the international monetary system less unfair and less exploitative
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. Krugman’s fellow Nobel Prize winner, Joseph Stiglitz has provided (seemingly ironically, also in a Wall Street Journal op-ed): “That money is supposed to reignite the American economy but instead goes around the world looking for economies that actually seem to be functioning well and wreaking havoc there.”

The bottom line is that there is no way that the United States can defend depreciation of the dollar on terms that oblige other countries to take a loss on their holdings. Investors throughout the world have lost faith in the dollar and other paper currencies, and are moving into gold or simply closing off their economies. Over the past year – ever since the BRIC meetings in Yekaterinburg, Russia, in summer 2009 – their response has been to avoid using the dollar, to protect themselves from aggressive U.S. capital flight seeking to raid their central banks, buy out their companies, raw materials and assets with “paper credit” and indeed to step up military spending.
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Steve, your refusal to back up your position speaks volumes about you and your ideas.
 
darmanad said:
Steve, your refusal to back up your position speaks volumes about you and your ideas.
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Actually, my refusal to provide the answers you seek only speaks volumes of my contempt for you.

Since I'm not a politician and have no power over anyone what difference does it make? I do enjoy posting (sometimes provocative) questions. My personal beliefs aren't nearly as important as the actual effect US politics can have on American expats living in Argentina. I never lose sight that this is a website about living in Argentina and that's what almost all of my posts are about.

In any case, for anyone who is genuinely interested, here are several articles that "sum up" my views on politics and economics, including the issue of altruism as applied to the founding principles of the US government:

http://fvdb.wordpress.com/2010/11/05/the-altruist-collectivist-mentality/

http://freedomkeys.com/collectivism.htm

http://freedomkeys.com/gummint.htm#g=sfallacy

I see that about 99% of your 325+ posts are in the world politics forum. You obviously aren't here to help others. You are certainly entitled to express your opinions, but what do you expect to accomplish by saying that I pollute more than I contribute to the forum (except to get a "thanks" from Dudester)?

Do you remember how you began the second post you ever made here?

darmanad said:
I have a couple of extra minutes so I will post a few words even though I realize that this chat room is no place for real serious discussion. Nonetheless, people such as orwellian and his shit-for-brains ilk need to hear this...
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So please don't expect me to discuss my political beliefs with you.
 
steveinbsas said:
Actually, my refusal to provide the answers you seek only speaks volumes of my contempt for you.

Since I'm not a politician and have no power over anyone what difference does it make? I do enjoy posting (sometimes provocative) questions. My personal beliefs aren't nearly as important as the actual effect US politics can have on American expats living in Argentina. I never lose sight that this is a website about living in Argentina and that's what almost all of my posts are about.

In any case, for anyone who is genuinely interested, here are several articles that "sum up" my views on politics and economics, including the issue of altruism as applied to the founding principles of the US government:

http://fvdb.wordpress.com/2010/11/05/the-altruist-collectivist-mentality/

http://freedomkeys.com/collectivism.htm

http://freedomkeys.com/gummint.htm#g=sfallacy

I see that about 99% of your 325+ posts are in the world politics forum. You obviously aren't here to help others. You are certainly entitled to express your opinions, but what do you expect to accomplish by saying that I pollute more than I contribute to the forum (except to get a "thanks" from Dudester)?

Do you remember how you began the second post you ever made here?



So please don't expect me to discuss my political beliefs with you.
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Pure unadulterated nonsense except for your expression of contempt for me. You admit to making provocative statements, but when you get challenged on them by me or others you clam up. You can't tolerate to defend your absurd political beliefs because it exposes you as uninformed. Rather than engage in constuctive debate, you get defensive, make inane excuses for refusing to engage, and ultimately lash out at someone like me who calls you on your nonsensical political statements. That's why you hold me in contempt - because, in your own words, you feel embarassed like an errant Sunday School child put in his place. Grow up, Steve.
 
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