Bush administration pushing dollar down or allowing it to fall? IMF chief sounds alarm

Poster #13 - Diane, which issue of Forbes 2006 or more than one issue?

The dollar since 1971-Nixon is no longer backed by gold but oil. The House of Saud only selling their oil for US paper essentially backs it. When oil rises in price it devalues the dollar. With peak oil here the coming decline will have a marked effect on the dollar. Gold trades invesely to the dollar so during dollar declines gold rises-simple. Buy some.

last time I checked we still had the highest standard of living anywhere in the world and if you want to live here you better pay with the dollar . The sky is not falling, in fact I believe our country debt and dollars are grossly undervalued.

Our currency is backed by the full faith and credit of the US Government and the resources therein, as far as I am concerned, there is no greater asset in the world. So you think China, Russia Iran and Brazil are great..Try living there...hahahahahaah. As for the credit crunch, keep rates stable. if you raise the the media will go nuts and the stock market will go crazy. If you lower the the media will go nuts and say inflation is looming. At a time where perception is more important then performance, (which always seems to be the case) why give the media fodder. They only like to report on disaster cause it gives them more viewers. Things are going great here in the good old USA!!! Dont believe me? Move to Haiti....

Do you drive a gas guzzler, use firewood, own a big house with outsized utility bills? If yes , you are the damned culprit!!

BUSH IS KILLING AMERICA

IF THE DOLLAR CRASHES GUESS WHAT - THE PEOPLE OF THIS COUNTRY WOULD STORM THE WHITE HOUSE, DRAG OUT BUSH AND CHENEY AND HANG THEM 2 WORTHLESS BASTARDS UNTIL THEY ARE DEAD AT THE NEAREST TREE

THIS BULLSHIT FAILED OCCUPATION IN IRAQ IS KILLING THIS COUNTRY BUT THEM 2 ARE WAY TOO STUPID AND GREEDY TO SEE THAT FACT

BRENT - YOU PROBABLY NEVER LEFT YOUR HOME TOWN SO HOW DO YOU KNOW HOW THE REST OF THE WORLD IS DOING - PEOPLE LIKE YOU MAKE ME VOMMIT BECAUSE YOU ARE KNOW IT ALLS WHO NEVER DID IT

I HAVE BEEN AROUND THE WORLD MANY TIMES AND HAVE SEEN MUCH BETTER THAN WE HAVE HERE

BRENT - KEEP NAMING ALL THE SHIT HOLES OF THE WORLD - MAYBE THAT IS THE WORLD IN YOUR STUPID VIEW BUT IF YOU EVER WERE TO JAPAN, EUROPE AND SOME ASIAN COUNTRIES YOU WOULD BE SPEAKING OF GREAT PLACES TO LIVE. I HAVE VISITED ALL OF THEM AND KNOW WHAT THE HELL I AM TALKING ABOUT TOO UNLIKE YOU

It would seem to my non educated mind that there is subtle link to the $ decline.
As the rapacious oil producers get more US$ for their black gold the other currencies go up in relation to the increase.
They buy a great deal of products from the stronger currency markets more than from the USA.
So their bloated revenue actually buys them less each time in example Europe UK.
They are going nowhere but backpedalling,they virtually produce nothing in their countries to sustain them but import.1 kilo of rice from will cost them more as the dollar drops and their oil goes up.
The Emir of Quatar is frightened of the jump in oil prices as he said when it goes above $40-50 then the race for othere sources will get stronger and we see it now.
He is preparing his country for a different future.

In this case I agree with Liber. A similar, but more optimistic assessment of the lower dollar value, was stated in a recent Newsweek commentary by Robert Samuelson, "Globalization to the Rescue?"

While Liber believes the longer term effects of a diminished dollar will result in foreign captial moving out of lower interest-bearing U.S. Treasury notes and into the purchasing by foreign countries of American assets such as real estate and corporations, Samuelson supports the notion that the cheaper American exports lowers the trade deficit, spurring growth in the American economy.

But, in another, more critical calculus for the American consumer (which is most of us) the Chinese are now running an inflation rate of 6.5% according to an article that appeared in The Ecnomist this week. Clearly, American exports, even if they are cheaper for foreigners to buy, will never offset the huge wage and labor disparity that the Chinese have over corporate manufacturers in the United States.

What this means is higher cost of Chinese produced goods coming into the U.S. (think Wal-Mart) and consequently higher costs for the American consumer. The lower dollar combined with lower borrowing interest rates promoted by Fed Chairman Ben Bernanke only delays the time when inflation will inevitably hurt the American consumer at a time when wages are either rising slowly or not at all.

It seems to me, Bush is treading water, hoping until he leaves office in January 2009 to drag out a borrow-and-spend binge while at the same time he believes most people will not realize until it's too late that he has allowed the selling off of our corporate and real estate assets to foreigners.

The only people who will benefit from this in the longer run will be the Chinese and some European countries who see the cheaper purchase of American land and other real estate as a hedge against inflation in their own countries.

It gives a new meaning to Bush's platitude, the "ownership society." What he didn't tell us is that it will be foreigners who will own our country's treasures, not Americans.

There are only two good things I can see happening from a devaluing dollar and lower interest rates. Those would be stronger exports and a savior for a glutted housing market. I guess the only way to stop the housing market from continuing to devalue is by devaluing the dollar. This helps housing in 2 ways. First, it takes more devalued dollars to buy a house(inflation), so supports higher housing prices. Secondly, the devalued dollar allows foreign investors to come in and buy houses for a better price since their currency is stronger. I don't know that the devalued dollar will stop foreclosures in the subprime unless they can refinance with the lower interest rates or sell their houses quicker for a better price. However, atleast with a devalued dollar and inflation maybe these foreclosures can be sold for better prices.

Ever read "The Creature from Island" - about the federal reserve

you have nothing to say, haven't you realized that by now, you are nothing but surfs in this world of political and ceo's thieves that blunder and rob, wake up!

Bush has been preaching for seven years that he believes in a strong dollar while all along it has been falling especially against the Euro. I have always suspected that he has been secretly pleased with the dollar wilting because it has helped his export economy and job growth. It also has the side benefit of putting "laizze faire" pressure on the European socialized economies which I believe he thinks that the Democrats and Clinton helped prop up with a with a strong dollar and import economy. Bush and his cohorts want to destabilized the European economies which have strong unions, universal health care, vacations, employment rights, and retirement benefits which have evolved from having strong export economies. The idea that people should work only 40 hours a week is an anathema to some conservative politicians, especially when those families do not align themselves idealogically with the Bush agenda.

Finally most commentators let Bush make the case that it is his tax cuts that have driven our economic growth for the last seven years rather than the falling dollar. I am no economist or scholar but a firefighter who who has paid attention to the fact that there has been a huge increase in company profits from overseas markets and operations.

Actually, Finland has the highest standard of living in the world, followed by Sweden. The USA was ranked further down the list. I've lived in both Finland and the USA. Finns are more laid back, there is a national "team spirit" in the sense that the poor segments of society are not left out when it comes to housing, food, and health care. Taxes are fairly high, but that's primarily sales tax. Income tax is comparable. The one thing I like about Finland is that when I pay tax, I know it's not going down some government black hole (it might go "under the mountain", where the air force hides its hornet, but at least the govt doesnt build 500 million dollar bridges to artic islands while other bridges fall apart. In fact, the roads and bridges are well maintained.) What I noticed in America was lots of social stress between people, such as road rage. In my opinion, it's because Americans are not provided the services they deserve, including universal health care, better unemployments benefits, a job office that actually helps people find jobs, and more say in how taxes are actually spent. America has one thing that Finland does not have, however, and that is the idea if you can dream it you can be it. Finns tend to be conservative in their views on career and other choices, but I known several who should have risked more to achieve personal and professional success. On the other hand, the country gave the world rakkainen and LORDI, so I guess not all Finns fit into the box.

My comment got chopped up at the end, so sorry about that.

Getting back to the American Dollar, has it occurred to anyone that by allowing the dollar to weaken on the exchange rate that it will shake up the Chinese Yuan? This could be the international bankers way of trying to get China to unpeg its currency from the American Dollar. At some point, the shrinking yuan will hurt China because it does not only export, it also spends money abroad in the form of business, tourism, and import.

Frist, the dollar is going down; second wages is about too. Be prepared!

#36 hit the nail on the head. The devaluation of the dollar will cause the Chinese to free the Yuan from the Dollar. We have been trying to get the Chinese to do this for the last 3 years but they have been dragging their feet, which is hurting our economy. India has already freed the Rupee and China stated they were moving $1.5 trillion out of Dollars today. As our government moves to ratify the Free Trade Treaties throughout the world the walls of taxation in other countries are removed allowing the US to compete on a level playing field. As inflation starts to impact India and China investors will turn again to the US where our labor force provides the lowest cost for each item produced. It appears that we could be on the cusp of one of the largest growth periods in our country's history. Oil prices will tumble as panic buying falls to the way side, the markets reverse and the Dollar again escalates. As usual the Media Talking Heads have it wrong again.