Sorry, here is the article: http://online.wsj.com/article/SB10001424052748703298004574458923186941870.ht ml?mod=wsj
The Weak-Dollar Threat to Prosperity Measured in euros, U.S. per capita GDP is down 25% since 2000. By DAVID MALPASS If you want to know why the dollar has been falling this week and gold hit a new high, look no further than the weak jobs numbers last Friday and the weak communique issued over the weekend at the G-7 meeting in Istanbul. Deploring "excess volatility and disorderly movements in exchange rates" isn't exactly a ringing defense of the greenback. And 9.8% unemployment convinced markets that monetary policy will remain loose regardless of dollar weakness. Bond buyer Bill Gross of the Pimco fund summed up the situation nicely in a recent CNBC interview. Asked whether low interest rates will weaken the dollar, the influential allocator of global capital said: "I think that's part of the administration's plan. It's obviously not announced-the 'strong dollar' is always the policy, so to speak. One of the ways a country gets out from under its debt burden is to devalue." On the surface, the weak dollar may not look so bad, especially for Wall Street. Gold, oil, the euro and equities are all rising as much as the dollar declines. They stay even in value terms and create lots of trading volume. And high unemployment keeps the Fed on hold, so anyone with extra dollars or the connections to borrow dollars wins by buying nondollar assets. [malpass] Investors have been playing this weak-dollar trade for years, diverting more and more dollars into commodities, foreign currencies and foreign stock markets. This is the Third-World way of asset allocation. Corporations play this game for bigger stakes, borrowing billions in dollars to expand their foreign businesses. As the pound slid in the 1950s and '60s and the British Empire crumbled, the corporations that prospered were the ones that borrowed pounds aggressively in order to expand abroad. Though British equities rose in pound terms, they generally underperformed gold and foreign equities. At the end of empire, the giant sucking sound was from British capital and jobs moving offshore as the pound sank. Some weak-dollar advocates believe that American workers will eventually get cheap enough in foreign-currency terms to win manufacturing jobs back. In practice, however, capital outflows overwhelm the trade flows, causing more job losses than cheap real wages create. This was the lesson of the British malaise, the Carter malaise, the Mexican malaise of the 1990s, Yeltsin's Russian malaise through 1999 and the rest. No countries have devalued their way into prosperity, while many-Hong Kong, China, Australia today-have used stable money to invite capital and jobs. The more the dollar devalued against the yen in the 1970s and '80s, the more Japan gained share in valued-added manufacturing, using the capital from weak-currency countries to increase productivity. China is doing the same now. It watches in chagrin as the U.S. pleads with it to strengthen the yuan, adding productivity fast with the dollars rushing its way in search of currency stability. If stocks double but the dollar loses half its value, who beyond Wall Street are the winners and losers? There's been a clear demonstration this decade. The S&P nearly doubled from 2003 through 2007. Those who borrowed to buy won big-time. Rich people got richer, seeing their equity bottom line double. At the same time, the dollar's value was cut nearly in half versus the euro and other stable measures. Capital fled, undercutting job growth. Rent, gasoline and food prices rose more than wages. Equity gains provide cold comfort when currencies crash. From the euro perspective, the S&P peaked at 1700 in 2000, finally reattained 1100 in the 2007 bubble, fell below 600 in March and now stands at 700 (see nearby chart). With most of the market capitalization of U.S. stocks held by Americans, the dollar devaluation has caused a massive decline in the U.S. share of global wealth. Measured in euros (a more stable ruler than the ever-weakening dollar), U.S. real per capita GDP is down 25% since 2000, while Germany's is up 4% and tops ours. The solution is a strong U.S. jobs and wealth program. It has to include stable money, a flatter, more competitive tax structure, spending restraint, and common-sense bank regulation so small business lending can restart. Treasury has to rapidly lengthen the maturity of the national debt and take steps to protect the Fed from market losses on its long-term debt holdings. Instead, Washington's current economic program pushes capital away by weakening the dollar, threatening higher tax rates, borrowing short (the Fed's near trillion-dollar overnight debt, Treasury's mounds of bill and note issuance) to lend long (mortgages, student loans, entitlements), doubling down on government subsidies, and rechanneling bank loans to governments and big businesses instead of the small business job-growth engine. It's possible global bond vigilantes will call Washington's bluff, reducing their bond purchases until we stop devaluing and restart job growth, which is the ultimate source of tax revenues to repay our bond debt. This would create a Volcker moment when the U.S. might tighten even as the economy slowed (as then Fed Chairman Paul Volcker did back in 1979). But the accepted outlook is the almost-as-gloomy new norm. If all goes according to current plans, the dollar devalues slowly and bond buyers come back for more even as national debt heads toward $15 trillion. World living standards grow faster than ours, as does global wealth. The Fed chases inflation as the dollar sinks, but not so fast as to stop the recovery. More capital moves abroad, leaving U.S. unemployment too high too long. A better approach would start with President Barack Obama rejecting the Bush administration's weak-dollar policy. This would invite capital and jobs to come back before interest rates have to rise. Mr. Malpass is president of Encima Global LLC. -----Original Message----- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Jeff Broadwick Sent: Friday, October 09, 2009 10:50 AM To: 'WISPA General List' Subject: Re: [WISPA] American Dollar. Was: Re: Barriers to WISP growth According to an article I read a couple days ago, our GDP if measured in Euros is off by 25%! That is the effect of devaluing our currency. That WILL have long-term effects on our standard of living and our place in the world. Jeff -----Original Message----- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Travis Johnson Sent: Friday, October 09, 2009 10:37 AM To: WISPA General List Subject: Re: [WISPA] American Dollar. Was: Re: Barriers to WISP growth I understand that.... so instead of bread costing $2.00 per loaf, it goes up to $2.10. So because of that "fear", everyone wants to find a different place to put money besides a bank? Seems strange to me. Travis Microserv Jeff Ehman wrote: > Imports cost us way more money. That may not directly affect any individual consumer, but it does impact nearly every manufacturer. Cost of production increases greatly. The only way they can make money is to increase their prices to distributors who in turn have to raise the price to individual consumers. It creates inflation. > > -Jeff Ehman > > From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] > On Behalf Of Travis Johnson > Sent: Friday, October 09, 2009 8:26 AM > To: WISPA General List > Subject: Re: [WISPA] American Dollar. Was: Re: Barriers to WISP growth > > I've never understood this thinking... who cares if the dollar is > "worth less" to the rest of the world? If it will still buy groceries, or pay my power bill, why does it matter? > > Travis > Microserv > > RickG wrote: > > "put some money in the bank" > > The question is: which currency? > > With the dollar falling (or failing) what good is it going to do in > the bank? > > I guess I'll just keep pouring it back into the company because its > > gonna be worthless soon. > > Any other ideas guys? > > -RickG > > > > On Thu, Oct 8, 2009 at 11:57 AM, Marlon K. Schafer <o...@odessaoffice.com><mailto:o...@odessaoffice.com> wrote: > > > > Yeah, what he said! > > > > I'm gonna work REALLY hard to pay down debt and put some money in the > bank > > over the next 3 or 4 years. I want to be ready to pick those > companies up. > > marlon > > > > ----- Original Message ----- > > From: "Marco Coelho" <coelh...@gmail.com><mailto:coelh...@gmail.com> > > To: "WISPA General List" > <wireless@wispa.org><mailto:wireless@wispa.org> > > Sent: Thursday, October 08, 2009 8:20 AM > > Subject: Re: [WISPA] Barriers to WISP growth > > > > > > > > Patrick, > > > > Not being one for gov money.... > > > > We have excellent credit. We have that because we only expand at a > > rate the will allow funding (new business) to cover our costs. So the > > cycle goes: > > > > 1. Build out X number of Towers. > > 2. Market X number of Areas. > > 3. Install Customers to X*Y until well funded. > > > > Repeat. > > > > I think a lot of the companies that take stimulus money are going to > > go under in the long run. They will go like the dot-coms. Build > > build Build.... Ah shit no revenue! > > > > That being said, we are vertical, all workers work for the company. > > That is the only way you can control quality. Good employees are very > > hard to find. For every 100-200 applications/resumes, maybe 10 are > > worth talking to seriously. You're lucky to find 1 that is worth > > hiring. > > > > Always a ray of sunshine! > > > > Marco Coelho > > Argon Technologies Inc. > > > > > > On Wed, Oct 7, 2009 at 7:25 PM, RickG <rgunder...@gmail.com><mailto:rgunder...@gmail.com> wrote: > > > > Patrick, > > > > #1- Labor: There is very little skilled resources here. > > #2- Funding: Especially for labor. Normal financing channels are > > available but I will not take on too much debt at one time. > > #3- Time: There is little extra time to dedicate towards expansion > > versus daily operations. > > > > Notes- > > Employees: Too small to enjoy such a "luxury". > > Stimulus: I don't believe in it and did not apply. > > Technologies: Proprietary equipment are a bit too expensive unless you > > buy CPE in 100 packs. Even then, the AP's are still expensive. > > > > -RickG > > > > On Wed, Oct 7, 2009 at 11:37 AM, Patrick Leary > <ple...@apertonet.com><mailto:ple...@apertonet.com> > > wrote: > > > > Regardless of your tech choice -- Moto, 802.11-based, WiMAX or other, > I > > am interested to know what are the greatest barriers to growth and why? > > > > Some possibilities: > > Is it funding and if so, are your normal channels for money frozen or > > otherwise gone? > > Is it competition? If so, how specifically. > > Are you constrained from hiring due to high cost of employee benefits > > (e.g. health insurance)? > > Are you stalled waiting for response from your stimulus application? > > Are you stalled trying to defend against someone else's stimulus > > application that would include your market? > > Are the current technologies too expensive or technicall inadequate to > > deliver what you need to compete? > > > > Patrick Leary > > Aperto Networks > > 813.426.4230 mobile > > > > > > ---------------------------------------------------------------------- > ---------- > > WISPA Wants You! Join today! > > http://signup.wispa.org/ > > ---------------------------------------------------------------------- > ---------- > > > > WISPA Wireless List: wireless@wispa.org<mailto:wireless@wispa.org> > > > > Subscribe/Unsubscribe: > > http://lists.wispa.org/mailman/listinfo/wireless > > > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > > > > > > ---------------------------------------------------------------------- > ---------- > > WISPA Wants You! Join today! > > http://signup.wispa.org/ > > ---------------------------------------------------------------------- > ---------- > > > > WISPA Wireless List: wireless@wispa.org<mailto:wireless@wispa.org> > > > > Subscribe/Unsubscribe: > > http://lists.wispa.org/mailman/listinfo/wireless > > > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > > > > > > > > -- > > Marco C. Coelho > > Argon Technologies Inc. > > POB 875 > > Greenville, TX 75403-0875 > > 903-455-5036 > > > > > > ---------------------------------------------------------------------- > ---------- > > WISPA Wants You! Join today! > > http://signup.wispa.org/ > > ---------------------------------------------------------------------- > ---------- > > > > WISPA Wireless List: wireless@wispa.org<mailto:wireless@wispa.org> > > > > Subscribe/Unsubscribe: > > http://lists.wispa.org/mailman/listinfo/wireless > > > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > > > > > > ---------------------------------------------------------------------- > ---------- > > WISPA Wants You! 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