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Article on the potential of a major weakening of the dollar

174.194.203.101
Posted on June 9, 2021 at 10:28:02
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 I have a tendency to agree with this to some extent. At the very least it doesn't look good for the medium and long term. We are moving out of our dominant position and interest rates at a 200 year low. Some items in the local Asian grocery stores are shocking. It was good while it lasted.






So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

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Inflation is already here, posted on June 9, 2021 at 13:23:39
Jay Buridan
Audiophile

Posts: 10283
Location: Michigan
Joined: January 21, 2004
 But FED and Treasury heads are buried in the sand or pretending not to notice.

"Horse sense is the thing a horse has which keeps it from betting on people. "
― W.C. Fields

 

RE: Article on the potential of a major weakening of the dollar, posted on June 9, 2021 at 10:42:14
kyle
Audiophile

Posts: 1839
Location: London Ontario
Joined: September 29, 1999
 The Chinese have, over the last few years, increased their verbal attacks on anyone that disagrees with their views and politics. They use stories like the one you referenced to undermine the position of anyone that has a contrary opinion to their state approve vision of the China of tomorrow.

It's a pretty good propaganda system.

 

RE: Article on the potential of a major weakening of the dollar, posted on June 9, 2021 at 10:41:58
Inmate51
 Hahahahahahaha!!! "Major weakening". That's funny.

In 1973, the first time I went to Europe, as a student, the Dollar was at about 3.75 Swiss Francs to one Dollar. Today, HA! It's about one-to-one or worse. At least, the conversion math is easier. Can you say "major weakening?" Don't even get me started on "the Euro".

On the upside, we don't have the Italian Lira any more, or the French Franc, or the German Mark. The Lira was the worst: "Here's the change for your lasagna - 19,347 Lira, from your 50,000 Lira note." Eye-yie-yie.

Edit, the best lasagna I've ever had was at a small family-run restaurant along the river in Florence.

 

RE: Article on the potential of a major weakening of the dollar, posted on June 9, 2021 at 10:50:27
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 It varies hugely depending on the currency. The dollar to Swiss Franc and the Yen are on the extreme side and hardly tell the whole story. The dollar is still doing very well against the Euro... The Japanese debt is higher than ours in relation to GDP. I myself prefer a more comprehensive analysis than just picking out the extremes. But that's just me.








So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

RE: Article on the potential of a major weakening of the dollar, posted on June 9, 2021 at 11:02:54
JURB
Audiophile

Posts: 2056
Location: North Ohio
Joined: May 29, 2016
 When you borrow that much money the currency is bound to devalue. When Moody's gets around to it they are going to degrade our credit, which is significant. It is only that important because of the sheer volume we owe. We are already paying interest on the interest for the national debt.

 

RE: Article on the potential of a major weakening of the dollar, posted on June 9, 2021 at 11:54:33
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 Once again the evidence points to you being incorrect and overly simplistic on this, jurb. What matters most, IMO and other's is the cost of the debt service in relation to GDP. About 1.6% of GDP in 2000 and .5% in 2020. The sky is not falling at this time, based on debt anyhow. As it stands now the debt does not have to be paid off, just the interest on it. This is way in manageable territory. Once again, our debt service is less than 1/3 of what it cost in 2020 in relation to GDP.













So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

I beg to differ...., posted on June 9, 2021 at 12:55:10
Rod M
Web Geek

Posts: 16245
Location: So. California
Joined: March 1, 1999
Contributor
  Since: March 1, 1999
 In 2000, we had $5.7 trillion in debt, at 1.6%, that's $91 billion.

Now, the debt is at $28.4 trillion, at 0.5%, that's $142 billion.

What's worse is that when interest rates go back to normal levels, those numbers escalate quickly. Just a 1% increase amounts to an extra $284 billion. At just 3%, it's $852 billion.

And they haven't stopped spending!

-Rod

 

RE: I beg to differ...., posted on June 9, 2021 at 16:45:04
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 Total US Federal government revenue in 2000- 2.03 Trillion dollars.

Total US Federal government revenue in 2020- 3.42 Trillion dollars.

142/3420= .0415 So it's 4.15% of revenue. For debt service. I can live with that.

2000 is 4.48% of government revenue

Neither is driving the government into bankruptcy. There are other issues of course.

"Reagan proved deficits don't matter. " Dick Cheney

So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

RE: I beg to differ...., posted on June 9, 2021 at 13:52:45
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 Rod, you are leaving out the approximate 2 fold increase in GDP. I do agree that this situation is somewhat dependent on these historically low interests though.

So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

Please Google 'GDP Price Deflator', posted on June 9, 2021 at 23:14:16
Jay Buridan
Audiophile

Posts: 10283
Location: Michigan
Joined: January 21, 2004
 The deflator is used to calculate inflation in GDP longitudinally.

"Horse sense is the thing a horse has which keeps it from betting on people. "
― W.C. Fields

 

Huh? Are you assuming we keep borrowing huge sums when interest rates go up?, posted on June 9, 2021 at 13:27:02
Rick W
 Interest on money borrowed now at today's rates does not increase when rates go up. The economy has grown substantially since 2000 and should continue to grow.

 

RE: Huh? Are you assuming we keep borrowing huge sums when interest rates go up?, posted on June 9, 2021 at 19:34:00
Rod M
Web Geek

Posts: 16245
Location: So. California
Joined: March 1, 1999
Contributor
  Since: March 1, 1999
 The GDP has about doubled since 2000; however, this chart show it in todays dollars, so you get 2% inflation and about 2% growth. Considering just real growth of 2%, GDP grew from $10.3T to $15.6T over 20 years.





I realize that T-Bills mature at different times. Some mature tomorrow and the latest in 10 years though a lot of people are buying shorter term bonds. In any case, new debt will pay the new rate and likely, around 5 years out, most bonds will get adjusted to new rates. At some point, historical interest rates will come back at typically 4%. Since 2010, the debt gone from $13,562 to to 28,234, more than double. At 4%, it's $1.13 trillion if we stop borrowing. If we double the debt again in 10 years, that total is $2.26T per year. Our current budget was about $4.7T.

If we do 2% a year, GDP would be maybe $26T in ten years with the debt at $56T if the current pattern continues. Do the math and pray we don't see 70s inflation.




-Rod

 

RE: Huh? Are you assuming we keep borrowing huge sums when interest rates go up?, posted on June 9, 2021 at 19:54:38
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 That's why we need to tax the rich WAY more, just like war hero, patriot, and 8 year POTUS, my main man Dwight D. Eisenhower. Not to mention ending or drastically curtailing the military-industrial complex. RIP IKE

I Still Like Ike - Imgur



So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

RE: Huh? Are you assuming we keep borrowing huge sums when interest rates go up?, posted on June 9, 2021 at 20:26:07
Rod M
Web Geek

Posts: 16245
Location: So. California
Joined: March 1, 1999
Contributor
  Since: March 1, 1999
 If you want to go to Fantasy Land, go to Disney Land.

Do you really think the politicians will do what they should? They haven't for last 60 or more years. How many times have they balanced a budget?

Seriously, you be hard pressed to tax the rich enough. You have to broaden the base, AKA, the middle class. Given our consumer economy, GDP would also suffer.

How many entitlements would need to be cut to pay for the debt?

-Rod

 

RE: Huh? Are you assuming we keep borrowing huge sums when interest rates go up?, posted on June 9, 2021 at 20:52:13
tweaker456
Audiophile

Posts: 7743
Location: SF Bay Area
Joined: June 20, 2020
 Well I'm glad to see you agree with IKE. There in no need in general to balance the budget, it just should not get out of hand. My guess is if and when it really gets out of hand I won't be around to pick up the pieces. There's a lot of moving parts to what is going on in the US and many don't look to good to either of us.


So let us stop talkin' falsely now, the hour's getting late --
Robert Allen Zimmerman

 

The debt is the least of my worries about the U.S. nt, posted on June 9, 2021 at 22:26:25
Rick W
 nt

 

RE: Article on the potential of a major weakening of the dollar, posted on June 9, 2021 at 10:44:55
kyle
Audiophile

Posts: 1839
Location: London Ontario
Joined: September 29, 1999
 I agree with your thoughts.
I have to ask, why were you getting a burger in Italy? They have great food.

 

Lasagna, burger,..., posted on June 9, 2021 at 12:58:12
Inmate51
 Ha! Yeah, I initially wrote "burger", which was so wrong. It actually was lasagna. And, the change might not have been 19,000 Lira. Might've only been 9,000!

:)

 

RE: Lasagna, burger,..., posted on June 9, 2021 at 13:06:47
kyle
Audiophile

Posts: 1839
Location: London Ontario
Joined: September 29, 1999
 As long as you washed it down with a Bud, it's fine.

 

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