"Global rebalancing" to weaken dollar, quietly

See Obama continuing the Bush policies, just as Clinton did? Haven't American's had enough "globalism" yet? Should we continue to sit quietly while foreign financial leaders meet (conspiring) on American soil!

Obama/Bush/Dem/Rep don't matter the G-20 is in charge, and here's what it means to you sheople; An even lower standard of living for Americans. Here is why the price of weed, and bread, and insurance, and everything else is skyrocketing, and why so many American jobs have moved overseas. Globalism - right under your noses.

Global rebalancing to weaken dollar, quietly

-- Neal Kimberley is an FX market analyst for Reuters. The opinions expressed are his own --

By Neal Kimberley
LONDON, Sept 22 (Reuters) - Twenty-four years ago today, major nations called for depreciation of the dollar to rebalance the global economy. Now, as another effort at rebalancing looms, the dollar will again bear the brunt -- though officials will try to ensure its fall is less dramatic this time.
That's the implication of U.S. President Barack Obama's announcement this week that he will push world leaders for a new global "framework" in which the United States would cut its huge trade and budget deficits. [ID:nN2074416]
Agreeing on this framework would be politically difficult, since it would require policy changes by many countries -- China, for example, would probably have to rein in its explosive export-led growth. [ID:nPEK248519]
But as the euro's EUR= climb to a new one-year high versus the dollar this morning shows, markets are starting to think the rebalancing process may start as soon as this week's Pittsburgh summit of leaders from the Group of 20 nations. [ID:nLM194679] The Plaza Accord of 1985 called for "orderly appreciation of the main non-dollar currencies against the dollar"; it was followed by central banks' coordinated intervention to ensure that happened.
This time, with the world shakily emerging from a financial crisis, policymakers are likely to try to manage the dollar's drop in a more low-key fashion.

NO EXPLICIT CALL
They are unlikely to issue an explicit call for the dollar to fall. In fact, the U.S. Treasury may continue proclaiming its "strong dollar policy" in an attempt to keep the markets calm.
No one in the G20 wants to risk a freefall of the dollar that could disrupt global trade as it recovers from recession. And in contrast to the 1980s, developing nations such as China are now challenging the dollar's long-term role as the world's top reserve currency.
The dollar's premier status helps the United States to obtain foreign capital and in order to keep that access, Washington is likely to encourage central banks around the world to continue holding dollars. This would require slow depreciation of the currency rather than a panicky slide. So unless policymakers completely lose control of the forex markets -- which cannot entirely be ruled out -- the dollar's slide is likely to be slower and smaller than it was after the Plaza Accord, when the currency sank about 50 percent versus the yen JPY= between Sept. 22, 1985 and the end of 1987.
The overall direction of the dollar does not look in doubt, however. Top presidential adviser Lawrence Summers has said he wants a U.S. economy that is "more export-oriented and less consumption-oriented".
A lower dollar is a logical tool to achieve that goal, and letting the currency weaken would probably be faster and easier than most other big policy steps to reshape the U.S. economy, such as tax changes and health reform.
The International Monetary Fund, which is advising G20 nations on economy policy, is hinting heavily at the need for currency realignment.
Continued...

Well they've already created the EU, which is on the Euro. They've been talking about the Amero which would combine mexico, canada, and the US. Eventually there are going to be about 4 types of currency in the world, and then the move will be made for 1 main currency. Scary

god forbid we would want to encourage export instead of import and be a nation of production rather than consumption.

doitinthewoods said:

Well they've already created the EU, which is on the Euro. They've been talking about the Amero which would combine mexico, canada, and the US. Eventually there are going to be about 4 types of currency in the world, and then the move will be made for 1 main currency. Scary

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Not sure on the Amero, because as it turned out that coin was an apparent Internet hoax -
[SIZE=+3]Hal Turner's AMERO Coin Story [/SIZE]but the American Jobs lost over the past 20 years, and the devaluation of the USD is real. China and Russia have already called for a new world currency, and when we least expect it, they'll probably steal the wealth of this country, just as they did during the last depression.

doobnVA said:

god forbid we would want to encourage export instead of import and be a nation of production rather than consumption.

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No doob, again you misunderstand the whole post. No one is saying we don't want to produce, what they are saying is that they are purposely going to devalue your dollar so as to make us a "Cheap" labor pool so that other countries will find it cheaper to buy from us than to produce it themselves. In other words you dollar is going to buy less and less because it is worth less and less. Sweat Shops anyone?

NoDrama said:

No doob, again you misunderstand the whole post. No one is saying we don't want to produce, what they are saying is that they are purposely going to devalue your dollar so as to make us a "Cheap" labor pool so that other countries will find it cheaper to buy from us than to produce it themselves. In other words you dollar is going to buy less and less because it is worth less and less. Sweat Shops anyone?

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You're almost right. Almost.

Here's the part where you're exactly right:

"so that other countries will find it cheaper to buy from us than to produce it themselves"

YES! We want to INCREASE exports, that's the whole point of adjusting the dollar's value on the global market.

Right now, we consume FAR more (imports from other countries, mostly) than we produce and export. We need to balance this out, or it's going to drive us even further in the hole. Production is good for the economy, and consumption (unless it's 100% domestic products being consumed, which isn't the case) generally isn't.

Devaluation of the dollar in the global market means that products we IMPORT from other countries will cost more (because it takes more dollars to equal the purchasing power of foreign currency), but at the same time means that domestically produced products will actually cost less.

We're facing inflation whether or not the dollar holds steady. Increasing production and export is essential if we want to actually turn the economy around for the better, and not just give the impression of recovery.

Devaluation of the dollar means your dollar buys less of everything, whether domestic or foreign and since the USA produces about 10% of what we consume its going to have a bitch of a time starting up all those new factories to produce all those things we need. Especially when no one is giving loans, since thay have no capital from which to operate because there has been 30 years of debt upon debt in this country. I have no problem with fueling our own consumption with our own production. But to export more than we import we must be competitive with 3rd world countries who work for pennies an hour, live 10 to a shack with no electricity and barely enough food to survive. How are we going to compete with $30 a month wages unless we undercut that? How will we compete with other countries who can dump toxic chemicals freely into lakes and streams or pollute the air without a care?

If anything we should make other countries raise their standards of living so that it is not economical for the GAP to make people in Honduras make all the Shirts.

Green Cross said:

Not sure on the Amero, because as it turned out that coin was an apparent Internet hoax -
[SIZE=+3]Hal Turner's AMERO Coin Story [/SIZE]but the American Jobs lost over the past 20 years, and the devaluation of the USD is real. China and Russia have already called for a new world currency, and when we least expect it, they'll probably steal the wealth of this country, just as they did during the last depression.

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Are you sure it's completely a hoax? I remember seeing something on the news about it a while back....not that I believe everything I see on the news. Just seems like there would be some truth to it.

NoDrama said:

Devaluation of the dollar means your dollar buys less of everything, whether domestic or foreign and since the USA produces about 10% of what we consume its going to have a bitch of a time starting up all those new factories to produce all those things we need. Especially when no one is giving loans, since thay have no capital from which to operate because there has been 30 years of debt upon debt in this country. I have no problem with fueling our own consumption with our own production. But to export more than we import we must be competitive with 3rd world countries who work for pennies an hour, live 10 to a shack with no electricity and barely enough food to survive. How are we going to compete with $30 a month wages unless we undercut that? How will we compete with other countries who can dump toxic chemicals freely into lakes and streams or pollute the air without a care?

If anything we should make other countries raise their standards of living so that it is not economical for the GAP to make people in Honduras make all the Shirts.

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I think you're confusing the value on the dollar in the global currency market with monetary inflation in our own economy. Not saying the two aren't connected, but as long as the proper framework is set in place, we should be able to limit inflation - pretty much everyone agrees that a slow, deliberate devaluation is better than the freefall we're currently facing.

anyway, again, I don't think stepping up our exports is in any way a bad thing - and the dollar is going to lose value whether intentional or not. Better to control it than to sit on our hands.

So our standard of living will go down, maybe people won't be so materialistic now yay!!

doobnVA said:

god forbid we would want to encourage export instead of import and be a nation of production rather than consumption.

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Further proof your ignorance allows the obvious to fly right over your head. You think that's what his post is about? We are a nation of production, we are just more top heavy on consumption. increasing exports is of course a good thing.

Let me ask your opinion on redistribution of wealth (not much to do with this topic but im curious). Do you believe its right to take money from people who have been training/studying most of their lives and then inserting their expertise into a career and working 40 hour weeks and give it to people who haven't got off their lazy ass to do any of it?

It's pure insanity. You reap the benefits of the work you put in. It's as simple as that doobnVA.

Counting on anyone besides yourself in this world is dependence and will NEVER lead to full maturity.

Ever.

JustAnotherFriedDay said:

Further proof your ignorance allows the obvious to fly right over your head. You think that's what his post is about? We are a nation of production, we are just more top heavy on consumption. increasing exports is of course a good thing.

Let me ask your opinion on redistribution of wealth (not much to do with this topic but im curious). Do you believe its right to take money from people who have been training/studying most of their lives and then inserting their expertise into a career and working 40 hour weeks and give it to people who haven't got off their lazy ass to do any of it?

It's pure insanity. You reap the benefits of the work you put in. It's as simple as that doobnVA.

Counting on anyone besides yourself in this world is dependence and will NEVER lead to full maturity.

Ever.

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You're assuming that a person who doesn't make a lot of money doesn't work as hard as someone who does. This is simply NOT true. Income is not indicative of one's work ethic. Take, for instance, a single mother who works 2 jobs - 60 hours a week, and is barely able to pay her bills and keep her children fed. You may say "She can get a better job", but this not always true. Should she not be able to receive some type of financial assistance, so she can actually get ahead? Or should she be stuck living below the poverty level, despite her hours of hard work?

There are also plenty of wealthy people who did NOTHING to earn their money except for being born into a wealthy family.

So, now that we've established that how hard you work often has very little to do with how much money you make... i'll let you in on a little secret.

I live within my means (I don't have credit cards, so I can't possibly spend more than I earn), unlike most Americans these days, I also work hard at my job while attending college full-time and raising 2 children. I'm currently using federal funds to attend school, and the government consistently gives me several thousand dollars a year in the form of a tax refund for taxes I never actually paid. Now, I consider myself lucky because I am NOT on my own - if I were, it would impossible for me to work, go to school, AND care for my children. I would be stuck in a dead-end job with no hope for advancement, much like the mother in the example I gave above.

I've lived the "redistribution of wealth" scenario. Hell, I'm STILL living it, right now. I can see the benefit, because I'm experiencing it RIGHT NOW. Were it not for our government's generosity with other people's money, I wouldn't be going to college.

So, to answer your question, YES, I can see the benefit of taking someone's money and giving it someone who "needs" it more.

So you clearly admit you are sucking off the government tit then and using my tax money to pay for your schooling and also not paying any taxes yourself while enjoying a EIC check every year? No wonder your all about the socializing of America, your balls deep in their wealth distribution program because you are a beneficiary of it. The government would like nothing more than to get everyone on a plan like you are in that way they can control everyone with their largesse.

While saying that I also Commend you on living within your meager means, not dining at the Credit Smorgasbord and still having the gumption to raise your children.

I put myself through College, had kids and worked 2 full time jobs to boot. I got no help from the Gubbermint cuz I don't need their help, I can move mountains by myself.

NoDrama said:

So you clearly admit you are sucking off the government tit then and using my tax money to pay for your schooling and also not paying any taxes yourself while enjoying a EIC check every year? No wonder your all about the socializing of America, your balls deep in their wealth distribution program because you are a beneficiary of it. The government would like nothing more than to get everyone on a plan like you are in that way they can control everyone with their largesse.

While saying that I also Commend you on living within your meager means, not dining at the Credit Smorgasbord and still having the gumption to raise your children.

I put myself through College, had kids and worked 2 full time jobs to boot. I got no help from the Gubbermint cuz I don't need their help, I can move mountains by myself.

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Absolutely I admit it. Since I have firsthand experience with this kind of "socialism", I can tell you it isn't all bad. They basically give me the money and leave me alone. They have yet to phone and demand I turn over my firstborn child, and I'm not holding my breath that it's going to happen =)

I'm not sure what "plan" it is you think I'm on (the get a better job plan?) and why there would be some conspiracy to have the government pay for everyone's schooling.... So, you kind of lost me there.

The reason there are government funds for people to go to college, is because people who graduate college earn more money on average than people who don't. People who earn more money generally spend more money, which is good for pretty much everyone involved. People who have a college education and a good job aren't likely to turn to the government for handouts or "welfare", so the point is to get people OFF government assistance by helping them an education (which will help them get a better paying job).

The point I was trying to make is that this "redistribution of wealth" is ALREADY happening here, and has been for some time. It isn't going to go away, no matter how much you might like it to, because that would be BAD for our people.

It isn't as if the "gubbermint" isn't going to get anything in return. Once I've graduated college and (hopefully) found a decent job, then I'll actually be paying taxes (unlike the people who are in my current situation).

Does that make sense? It's not a conspiracy to control people, it's a conspiracy to make people more productive so they can pay taxes =)

Doob? If your kids don't want to clean their room what do you do? And if your kids are too young to clean their room then how did your mother get you to clean your room?

The prices of weed aren't skyrocketing... Poof, there goes your whole argument.

NoDrama said:

Doob? If your kids don't want to clean their room what do you do? And if your kids are too young to clean their room then how did your mother get you to clean your room?

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I tell them that being a family means pitching in, even when you don't want to or it isn't your mess.

Why?

MY mother used to pull everything out of my room and put it in the living room. Then I had to dust/vacuum, before putting every single item away. neatly.

GrowTech said:

The prices of weed aren't skyrocketing... Poof, there goes your whole argument.

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LOL

I know a few people who wish prices of weed were skyrocketing, but yeah, they aren't. Even if they were it would have little to do with the actual economy, and more to do with decreased supply of weed.