Jim Fernandes wrote: > Even though the US economy is in a black hole, the US is still regarded > as the top dog. I wouldn't bet against the USD, considering everybody > else is suffering from this recession. The only other currency I like > is the Chinese Yuan (I got some stuff in the Chinese market). I do not > believe the Yuan will fall against the USD regardless of the recession.
Date: Mon, 2 Mar 2009 19:29:29 -0800 (PST) From: marlon menezes <goa...@yahoo.com> I agree with Jim that it is a crap shoot as far as betting against the US dollar is concerned. All regions have their problems. Mario observes: President Bill Clinton once warned people against betting against the US. The difference between the US and everyone else is the US system, with its built in checks and balances, which will survive even the current full fledged assault on it by the Obama administration and its attempt to bring the US down towards the least common denominator among other countries. No picayune analysis of details without the overarching context and perspective of the dynamic nature of the US system can capture what will happens in the US economy, except in the short term. The US has been through worse before, and the pendulum swings in how these problems are addressed. In 1929 we had the Great Depression. President Roosevelt and his Legislature addressed it with massive government spending and intervention. There are some, including Roosevelt's Treasury Secretary, Walter Morgenthau, who subsequently said that this approach prolonged the depression and it was being drawn into WW-II that lifted the US out of it. Inheriting an even worse economy in 1981 than we have right now, President Reagan and the Legislature at the time turned it around with massive income tax rate cuts and slowing wasteful government spending and intervention. This led to several years of growth with low inflation and the US ended up as the world's only superpower. This time around President Obama and his Legislature are addressing a faltering economy with massive government spending and more government intervention, even more than what President Roosevelt did in 1930. Only time will tell what the results will be. History says the results will be stagflation, i.e. economic stagnation with high inflation. However, what the world has always counted on is that the US will address its problems, and the US system of government is designed to correct swings in the approaches taken by whichever administration is in place and the results that are being experienced. There is a reason why immigrants from all over the world and their descendants, which is what Americans are, no diffenent from anyone else as far as their basic DNA is concerned, have managed to create a country that continues to be a magnet for people from around the world, where even our mortal enemies, captured while trying to kill us, have their rights defended and protected - by Americans - and we have peaceful changes in legislators and executive administrations, regardless how unpopular any public official or party becomes. The reason is the system and the US Constitution that it is based on. No analyst is wise enough to bet against this system over the long haul. If the Yuan doesn't fall it is because the Chinese government will not allow it to fall. The Chinese are trying to replicate the US as far as their industries are concerned, having discarded socialism after being one of its biggest proponents, who have the political power to make people behave as the government demands. Yet socialism failed, as it also did in India and Russia and caused economic stagnation in the largest economies in western Europe. President Obama is trying to make the US into a socialist country, without the ability to demand the appropriate behavior from anyone. Unless he realizes the difference, he will not survive his first term. If you choose to bet against the US keep it within a four year time frame.
