Congressional Speech: The End of U.S.

[cromagnum]

You're right, my favorite politician, that libertarian from Texas, Ron Paul said it.  I love that guy....

 

The dollar's influence today, and its precarious status as reserve currency, has more to do with Asia's export-driven growth strategy (see the article Gavin linked to) than the petrodollar issue, though it will certainly speed the demise of the dollar as international reserve currency as Russia, Iran, et al, price oil in euros.  I also believe the US (administration) is more interested in controlling access to oil than maintaining its price in $s.

 

As for the euro, there is an increasing demand to hold non-dollars as reserves by central banks, and  the euro is the only other (real) option until China opens up its financial markets.

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I have read elsewhere on another ppp political forum, where posters mention ron paul a number of times and some have placed his quotes in their avatar sig lines.

I plan on reading his bio and accomplishments.

 

I appreciate your added insight on this issue, this is very complex and extremely interesting, IMO!

[UConn James]

I have read elsewhere on another  ppp political forum,  where posters mention ron paul a number of times and some have placed his quotes in their avatar sig lines.

I plan on reading his bio and accomplishments.

 

I appreciate your added insight on this issue, this is very complex and extremely interesting, IMO!

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My current favorite is Rep. Jim Cooper D-TN. Fiscally conservative Democrat. Saw an interview with him on, uhh.... I think it was a PBS show... He was discussing the "Financial Report of the United States." Pretty damn mundane title, yes, but lots to be concerned about in there.

 

His statement. Cash-accounting vs. accrual/long-term accounting.

[cromagnum]

My current favorite is Rep. Jim Cooper D-TN. Fiscally conservative Democrat. Saw an interview with him on, uhh.... I think it was a PBS show... He was discussing the "Financial Report of the United States." Pretty damn mundane title, yes, but lots to be concerned about in there.

 

His statement. Cash-accounting vs. accrual/long-term accounting.

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Thank you for providing those links, I have been reading it, great find UCONN! .

It's like a shady buisness having two sets of books.

 

Here's a usa today Link. I know it's a real bad liberal news paper, I was rushed

http://www.usatoday.com/news/washington/20...icit-usat_x.htm

[GG]

Thanks for remembering Chicot. If anyone is interested I wrote a paper on the topic and would be happy to send you a copy.

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Not surprisingly, I don't agree with much in it, along with the conclusion.

 

Question, did your theory originate with Bush being elected or before?

[TPS]

Not surprisingly, I don't agree with much in it, along with the conclusion.

 

Question, did your theory originate with Bush being elected or before?

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If you actually read the paper, you wouldn't need to ask that question.

 

Hmmm...you don't agree with much in it. Well, there are some very speculative and contentious issues I raise, but I also use some very standard explanations, as well as historical facts.

 

I'll start with some of the standard stuff:

1. Do you disagree with the discussion about seigniorage? If so, do you have an alternative measure? I'll admit, I introduce what I believe are some new measures for seigniorage. Which in particular do you disagree with?

2. What specifically do you disagree with about my discussion of the Bretton Woods System? That's basically historical fact.

3. With respect to the last section, do you disagree with the standard analysis of the "twin deficits?" Do you disagree that Asian economies peg their currency to the dollar in order to support their export-led growth strategies?

 

The contentious issues:

1. I rely on a single source for the argument about the US-Saudi relationship and ensuring that oil will be priced in dollars and in return the US will "provide a security umbrella" for the Saudis. The point here is that by ensuring oil is priced in dollars it creates what I call a supra demand for dollars in the FX markets. My cursory evidence suggest that when the price of oil rose significantly, so did the dollar.

2. The premise of my paper is that we will look back on this current era as the point in time when the dollar began its decline as the premier international reserve currency. In the last section of the paper I discuss what it would take for a collapse of the dollar. I argue that in the era of "fiat" currencies, central banks can intervene in the FX markets to a level of "any means necessary" to prop up the dollar. I gave the example of Japan wanting to prevent the dollar from going below 100 yen to the $--essentially printing yen and buying dollars. This was described in the Financial Times and other publications--do you disagree with that?

 

At any rate, I argue that central banks can prevent a dollar collapse because of their ability to print their own currency, and that Asian CBs do this because they want to keep their currencies from appreciating, which would reduce the demand for their exports.

Now, my major speculation, and yes, it is a prediction on my part based upon my analysis: I ask is there a possibility that the dollar will collapse? My speculation is that it wil happen because of a Political event. I base this speculation on historical precedent (US and England and the Suez crisis as discussed in the paper) and the ability of CBs to prevent a collapse of the $ because they can print their own currency. Given the fact that Asian CBs hold about $1 trillion in dollar assets--mainly treasury securities, the scenario I envision of a dollar collapse is based upon the current administration's unilateral foreign policies. The largest supplier of oil to China is Iran. If the US decides to once again pusrue a pre-emptive war (justified or not) on Iran, I speculate that China will "attack" us economically, dumping its dollar assets, thus causing a collapse of the dollar, and an economic crisis in the US. I admit, this is a very speculative argument. I think we'll see shortly whether I'm right or not.

 

Now, if you read my paper, you would realize that this explanation of the possible collapse of the dollar is based upon the Bush administration's foreign policy--it can only happed because of a political crisis. So, yes, duh...it depends upon Bush being elected. Now the rest of the paper--the majority of it, much of which is based upon standard economic arguments, I find it difficult to comprehend your statement that you "disagree with most of it." Unless of course you only read the first page...

 

 

If you want to have a serious dicussion about this, I will be more than happy to reply.

[GG]

If you actually read the paper, you wouldn't need to ask that question.

 

Hmmm...you don't agree with much in it.  Well, there are some very speculative and contentious issues I raise, but I also use some very standard explanations, as well as historical facts.

 

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I read the whole thing, ignoring the urge to stop after the first page. response will come shortly.

 

Hint: I won't dispute historical facts, but how you use them to arrive at your "theory"