Re: [PEN-L] Decline of the dollar
Robert [no relation to Paul] Samuelson writes But beyond all the upbeat indicators lurks a potentially frightening problem that unsettles even the wisest and most seasoned economic observers. It's not government budget deficits, a possible housing bubble or even $2-a-gallon gasoline. It's the dollar. It's _both_ the housing bubble _and_ the falling dollar. The former means that the latter could have a bigger [negative] effect on the US economy than otherwise. Add in consumer indebtedness, it's a recipe for disaster. If GDP falls, then corporate debt (which had become bearable) suddenly becomes unbearable again. Jim Devine
Re: [PEN-L] Decline of the dollar
The dollar, of course. Devine, James wrote: buy what? Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine From: PEN-L list on behalf of Doug Henwood Sent: Sun 11/28/2004 3:31 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Decline of the dollar Hmm with all this PEN-L gloom on the dollar, is it time to buy? Doug
Re: [PEN-L] Decline of the dollar
Buying? With all this talk about selling? -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] On Behalf Of Doug Henwood Sent: maandag 29 november 2004 15:47 To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Decline of the dollar The dollar, of course. Devine, James wrote: buy what? Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine From: PEN-L list on behalf of Doug Henwood Sent: Sun 11/28/2004 3:31 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Decline of the dollar Hmm with all this PEN-L gloom on the dollar, is it time to buy? Doug
Re: [PEN-L] Decline of the dollar
Leon Kuunders wrote: Buying? With all this talk about selling? Exactly. When else do you buy except when everyone else is selling? Was it better to buy stocks in 1929 or 1932? 1999 or 2002? Doug
Re: [PEN-L] Decline of the dollar
With what? Jim Devine, e-mail: [EMAIL PROTECTED] ; web: http://myweb.lmu.edu/jdevine/ -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] On Behalf Of Doug Henwood Sent: Monday, November 29, 2004 6:47 AM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Decline of the dollar The dollar, of course. Devine, James wrote: buy what? Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine From: PEN-L list on behalf of Doug Henwood Sent: Sun 11/28/2004 3:31 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Decline of the dollar Hmm with all this PEN-L gloom on the dollar, is it time to buy? Doug
Re: [PEN-L] Decline of the dollar
Buying? With all this talk about selling? Exactly. When else do you buy except when everyone else is selling? Was it better to buy stocks in 1929 or 1932? 1999 or 2002? 2004 or 2006?
Re: [PEN-L] Decline of the dollar
Devine, James wrote: With what? The gold you bought at $250 in 2000, of course. It's $450 now. Doug
Re: [PEN-L] Decline of the dollar
Is this how the dollar slips from being world money - to be replaced by a basket of currencies, equilibrated technically and with maximum diplomacy by a network of interconnecting computers? Is this process really happening already, in front of our very eyes? Perhaps it depends on whether the size of the global economy and the knowledge system is able to manage the US economy as only one component part of the world economy, and not, as it was seen as recently as the Asian financial crisis of 1997, the only engine of world growth? Are the contradictions really finally accelerating towards a qualitative change in the mode of world-wide capitalist organisation? Can this be happening? Now?? And what are the future implications for class struggle? Chris Burford London - Original Message - From: Louis Proyect [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Saturday, November 27, 2004 3:39 PM Subject: [PEN-L] Decline of the dollar NY Times, November 27, 2004 Foreign Interest Appears to Flag as Dollar Falls By EDMUND L. ANDREWS WASHINGTON, Nov. 26 - Investors and market analysts are increasingly worried that the last big source of support for the American dollar - heavy buying by foreign central banks - is fading. The anxiety was on full display Friday, when the dollar abruptly slid to a record low against the euro after a report suggesting that the Chinese central bank might start to reduce its holdings in the American currency. Though Chinese officials later denied the report, and the dollar recovered, analysts say the broader trend is that foreign governments are becoming less willing to finance the growing debt of the United States government. On Tuesday, a top official with the Russian central bank said his government had become worried about the sinking value of the dollar and might switch some foreign reserves to euros. A day later, India's central bank hinted that it was worried about the same issue and might shift some reserves into other currencies. Japan and China, which together have amassed nearly $900 billion in United States Treasury securities, have both slowed their buying sharply from the frenetic pace in February and March. full: http://www.nytimes.com/2004/11/27/business/27dollar.html === In yesterday's NY Times, Morgan Bank economist tried to put a positive spin on this: NY Times, November 26, 2004 OP-ED CONTRIBUTOR When Weakness Is a Strength By STEPHEN S. ROACH Suddenly all eyes are on a weakening dollar. In recent days, the American currency has fallen against the euro, the yen and most other currencies around the world. The renminbi is a notable exception; China has kept its currency firmly pegged to the dollar for a decade. The fall of the dollar is not a surprise. It is the logical outgrowth of an unbalanced world economy, and America's gaping current account deficit - the difference between foreign trade and investment in the United States and American trade and investment abroad - is just the most visible manifestation of these imbalances. The deficit ran at a record annual rate of $665 billion, or 5.7 percent of gross domestic product, in the second quarter of 2004. While a decline in the dollar is not a cure-all for what ails the world, it should go a long way toward bringing about a sorely needed rebalancing. With a weaker dollar, economic and even political tensions among nations would be relieved, helping to promote more sustainable growth in the global economy. full: http://www.nytimes.com/2004/11/26/opinion/26roach.html === However, the 11/23 Boston Herald reported Roach as predicting Armageddon. Could he be hedging his bets? Economic `Armageddon' predicted By Brett Arends/ On State Street Tuesday, November 23, 2004 Stephen Roach, the chief economist at investment banking giant Morgan Stanley, has a public reputation for being bearish. But you should hear what he's saying in private. Roach met select groups of fund managers downtown last week, including a group at Fidelity. His prediction: America has no better than a 10 percent chance of avoiding economic ``armageddon.'' Press were not allowed into the meetings. But the Herald has obtained a copy of Roach's presentation. A stunned source who was at one meeting said, ``it struck me how extreme he was - much more, it seemed to me, than in public.'' Roach sees a 30 percent chance of a slump soon and a 60 percent chance that ``we'll muddle through for a while and delay the eventual armageddon.'' The chance we'll get through OK: one in 10. Maybe. In a nutshell, Roach's argument is that America's record trade deficit means the dollar will keep falling. To keep foreigners buying T-bills and prevent a resulting rise in inflation, Federal Reserve Chairman Alan Greenspan will be forced to raise interest rates further and faster than he wants. The result: U.S. consumers, who are in debt up to their eyeballs, will get pounded. Less a case of ``Armageddon,'' maybe, than of a ``Perfect
Re: [PEN-L] Decline of the dollar
Regarding Chris's question, I wonder how likely that a decline in the dollar, if it continues to take place at the present rate, could destabilize the world economy, perhaps unleashing a strong recession. Could China withstand much of an increase its currency -- especially with its high unemployment? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: [PEN-L] Decline of the dollar
In a message dated 11/28/2004 11:45:46 AM Central Standard Time, [EMAIL PROTECTED] writes: Are the contradictions really finally accelerating towards aqualitative change in the mode of world-wide capitalist organisation?Can this be happening? Now??And what are the future implications for class struggle? Comment Frightening. It means admitting that a vision exists of a transition to the domination of a new mode of production on the basis of draconian measures and the preservation of a historic ruling class,rights and privileges as a ruling class - that makes the economic leap to communism. Political forms of rule are subjected to the victor of the political contest and the only thing truly mobile and revolutionary as permanence, is the changes in the means of production that compels society to leap forward. Speculation and interest is nothing new in society. Profits detached and polarized against value production; that sits on the basis of fiat money or money detached from the value of a substance shaped by human beings, as a dominate form of wealth creation is a contradiction that cannot stand. Wealth has not been an abstraction of an abstraction or super symbolic for most of human history but a tangible relations and combination of man + land + machinery + energy + a tangible substance. I am extremely confused, which is why I read Pen-L for answers. Wealth based on a derivative that is derived from another set of derivatives - or financial rewards and obligations created to share risk (mathematical equations) , founded on money that has zero value (by virtue of its detachment from anything material - silver, gold, substance, physical assets as building, bureaucratic organization or infrastructure properties or fiat money) can only stand on the basis of an agreement between agents and people (ideology) backed up and maintained by military force.We are dealing witha super symbolic relations detached from the materiality of what the symbols are meant to be a short hand for or express. The German intellectuals refer to this as the negative dialectic or what Marx referred to as the negation of the capitalist as capitalist within the bourgeois property relations or the political system that allows one to be treated as a capitalist after his material functions as a class has vanished. This is called the bourgeois property relations. Jail or armed force imposes upon us our current system of exchange and distribution and I have not always felt this way. I think this means: Wealth based on a derivative that is derived from another set of derivatives, founded on money that has zero value can only stand on the basis of an agreement between agents and people (ideology) backed up and maintained by military force because,thisis a super symbolic relations detached from the materiality of what the symbols are meant to be a short hand for or express. Jail or armed force imposes upon us our current system of exchange and distribution. In exchange, onecountries relative decline in the value ofits currency is often another's gain, depending on how physical substances are exchanged and accumulated. Without a universal measure of worth - value, and its accumulation, how can one determine the relative worth of a symbol? A section of the feudal bureaucracy and ruling class passed over and became capitalist, based on wealth accumulation, while the industrial mode of production based on capitalist property gain universal dominance. If I know that, then the bourgeoisie mastered the process 200 years before I was born. Now, the American Union is really violent and revolutionary and might produce a few surprises, but our ruling class is more interested in staying ruling class - or a section of it, than capitalists. As capitalist they long ago understand their symbolic relations to wealth and as rulers they long ago understood their relationship as rulers. "What are the future implications for class struggle?" Soviet history and industrial relations leaped forward under the banner of Stalin because his political forms of compliance matched the revolution in the mode of production and the historic demand to develop and evolve an industrial society. You . . . (not you comrade) think the bourgeoisie ain't studied history and learnt from it. Bush Jr. is extremely aware of this process and reactionary in their forms of political compliance and will continue to expand the role of government and reorganize society based on their vision as a sectarian grouping within capital and the historical process. Everyone hits the wall of value at the same time and experience it different, based on stion in life. "What are the future implications for class struggle?" Throw away "left" and "right" ideological categories. This one is going to be real ugly and the left was always the left bench of the bourgeoisie. The tragedy is that a section of the bourgeoisie or rather those treated as capitalist are prepared
Re: [PEN-L] Decline of the dollar
Michael P writes: I wonder how likely that a decline in the dollar, if it continues to take place at the present rate, could destabilize the world economy, perhaps unleashing a strong recession. the problem is that Japan Europe are being pushed into recession by the rise of their currencies. Could China withstand much of an increase its currency -- especially with its high unemployment? but the Yuan is falling in step with the dollar at this point. JD
Re: [PEN-L] Decline of the dollar
Right, but tremendous pressure may be put on China to devalue, even though its balance with the rest of the world outside of the US is very small, isn't it? I am going to the store to see if they have Ellen Frank's new book. On Sun, Nov 28, 2004 at 12:15:51PM -0800, Devine, James wrote: but the Yuan is falling in step with the dollar at this point. --- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: [PEN-L] Decline of the dollar
the pressure is to revalue or to float upward. If China's trade surplus is mostly vis-à-vis the US, then the Yuan would float upward mostly relative to the USD -- or at least theory predicts it would. I finally figured out why they call it the Renminbi: one Yuan can cause a contagion of yuans. Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine From: PEN-L list on behalf of Michael Perelman Sent: Sun 11/28/2004 12:21 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] Decline of the dollar Right, but tremendous pressure may be put on China to devalue, even though its balance with the rest of the world outside of the US is very small, isn't it? I am going to the store to see if they have Ellen Frank's new book. On Sun, Nov 28, 2004 at 12:15:51PM -0800, Devine, James wrote: but the Yuan is falling in step with the dollar at this point. --- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: [PEN-L] Decline of the dollar
No. Pen-L gloom has been right in the past. Sometimes a little early but PEN-L sure got the internet bust and subsequent recession right. Gene Coyle Doug Henwood wrote: Hmm with all this PEN-L gloom on the dollar, is it time to buy? Doug
