Russia Central Bank not supporting U.S. Dollar
http://www.rbcnews.com/free/20041022123144.shtml

China Dumps Dollars for Oil and Gold
http://www.safehaven.com/article-2102.htm

This is a ominous omen , what this implies is there is an impending crisis unfolding behind closed doors and this demonstrates that Russia and China are panicking . Usually when this financial event happens it is evidence of a prelude to an attack of sorts on that nation . It is fairly obvious here that Russian intelligence is anticipating some form of attack on the US which will effect its economy in a serious way , and on advice from its intelligence service the Russian financial sector has acted accordingly . Adding further suspicion to this is China reacting some days later in the same way , obviously China has taking its cue from the Russian reaction , these 2 financially indebted nations can only suffer from an economic crisis in America . Adding suspicion to my theory is the absence of an E.U reaction , the E.U is Americas principal economic rival and is the only Economic entity powerful enough to benefit from a financial crisis in America .

Oh Dear, US dollar is nearly worthless. It's way too overpriced.

Russia is flooded with dollars right now because of high oil prices. Supply and demand stuff. Russian government was printing lots of rubbles to buy dollars in order to keep $ expensive=in order to keep Russian plants (working for export) running. It's fairly stupid policy, as for me, but it keeps people employed.

Guess what? Russian government printed too many rubbles. Too many rubbles printed to buy $= inflation. Thus, Russian government of crooks cannot support $ as eagerly as it did before. Thus, $ dollar exchange rate is gradually decreasing. There is no any expectation of any attack. Except USA government noboby will attack USA.

Whom China is indebted too? China has horded nearly 1 trillion of useless american green paper $. It's no clue what to do with them.

EU is hoping to spread euro as world's currency and Kick American leeches off the market. Having your currency as world's currency=you are world's leech, people work for you, you produce just your currency to buy stuff from them. It's like having a private money making machine in your house. God, I would like some.

USA was world's leech for 33 years already. Europians are eager to take that profitable place. Well, USA printed way too much green paper and it produces all less and less material stuff itself. USA years as world's leech are counted. Get rid of dollars while they worth something (if you have any).

Whats the market saying about th epresidential election as well? If the dollar is going down perhaps nobody has any faith in the incomign president to do anything about it.

I think dixonmassey's analysis of the Russian dump may be correct, russia is trying to avoid inflation. As to China, that would be anyones guess. China, like Japan, has kept the American dollar artificially high for decades in order to create a trade surplus. If China begins to dump to many dollars, its trade benefit with the U.S, is likely to decrease, not something that they want. Perhaps China is beginning to feel the effects of the tremendous energy demand, and would like invest in that type of area now.

America needs a devaluation bad.

A little devaluation could be good- But a lot of sustained devaluation, which I expect, is going to be catastrophic for the USA. The steeper the slide, the more frenzied will be the rush on the Euro, and diversification away from one universal World Ducat,until the world is ready to introduce one not tainted by nationalism. America's economic glory days are apparently, sadly soon a thing of the glorious but irretrievable past.

America's glory days are at an end, the Bush presidentcy imo will be the epitome of American power, the reason being that he has squandered so much American capital, and endebted the nation so much, that there is no way to get out of the hole. Yes the US is spendings itself to an early grave. The American consumer has more debt than he can actually afford, the only reason why we haven't seen a collapse yet is because interest rates are so low, and that's even coming to an end. Although a devaluation of the American currency now would be the prefect storm against the US economy. Consider that there are real fears that stagflation may be back, with all commodity prices through the roof and especially oil, with a depreciating dollar then prices would grow even higher. With the ever so wise Bush administration cutting taxes, and increasing spending inflation is a real danger.

Though I am an accountant, not an economist, I have heard this theory stated numerous times and am curious of others opinions.

The United States since the 1960s has simply not saved enough of its money, leading to high interest rates. Since the Americans overbought, a trade deficit was established. The countries receiving that trade surplus, invested back in the U.S. and the dollar, attempting to make money on the high rates and keep the dollar high.
The drop in interest rates slowly led to a lack of investment in the U.S., and eventually led to nations like China and Japan from buying more dollars, hence the dollar depreciation. This will require three things from the American end in order to recover.....

1) Americans simply need to save money they are making, and invest back in the government.

2) The lack of buying will greatly effect China and Japans trade deficit, and bring the dollar too a more realistic level

3) The goverment will simply have to cut back on spending, since foreign banking investment will no longer lend out money that cannot be paid back.

Any responses?

Sounds ok. Its a while since i read anything about this, but its beggining to sound like historical stuff way back in teh 70's or something, when people were worried about debt and lots of dollars going overseas.
Yet I cant really see the USA undertaking these actions very easily. And the world will probably have to suffer at least a slow down in order to correct things. Theres times when I think the "gold is money" fundamentalists have a point.

The US has been collapsing for some time, since it has long ago lost consensus and now functions without unity except for commerce. And commerce knows no masters. In fifty years, this place will be like Brazil: a third-world nation.

The US has been collapsing for some time, since it has long ago lost consensus and now functions without unity except for commerce. And commerce knows no masters. In fifty years, this place will be like Brazil: a third-world nation.

US should be so lucky. Next year Brazil will be self sufficient in oil and is already running a rapidly growing trade surplus. US will probabaly never achieve either and dollar will collapse long before 50 years passes as a result. Brazil has: 12 month growing season, abundant fresh water, cheap labor and land. In 50 years, US will not even have an agricultural economy that can successfully compete with Brazil because of this. I am concerned, and trying to do something about it. See web page under my name.

"US should be so lucky. Next year Brazil will be self sufficient in oil and is already running a rapidly growing trade surplus. US will probabaly never achieve either and dollar will collapse long before 50 years passes as a result. Brazil has: 12 month growing season, abundant fresh water, cheap labor and land. In 50 years, US will not even have an agricultural economy that can successfully compete with Brazil because of this. I am concerned, and trying to do something about it. See web page under my name. "


The USA makes around 76% of the worlds food supply not to mention giving millions of tons of food to countrys in need. Even with a shorter growing seasion it will take many years before the world will not need the USA to make food for it. With the rate of the world's population is growing we will need all the food production we can get.

"US should be so lucky. Next year Brazil will be self sufficient in oil and is already running a rapidly growing trade surplus. US will probabaly never achieve either and dollar will collapse long before 50 years passes as a result. Brazil has: 12 month growing season, abundant fresh water, cheap labor and land. In 50 years, US will not even have an agricultural economy that can successfully compete with Brazil because of this. I am concerned, and trying to do something about it. See web page under my name. "


The USA makes around 76% of the worlds food supply not to mention giving millions of tons of food to countrys in need. Even with a shorter growing seasion it will take many years before the world will not need the USA to make food for it. With the rate of the world's population is growing we will need all the food production we can get.

Brazil is world’ largest suppler of beef, coffee, OJ, and last year surpassed US in soy beans. Pigs and chickens I don’t know relative standing of US and Brazil, except Brazil’s exports a large and rapidly growing share of global production. Recall the question related to 50 years hence. The intrinsic natural advantages of Brazil will be developed whereas US has no more virgin land to put under the plow. In fact as pesticides contamination spreads, roads and shopping centers etc. are built, US is losing agricultural land.

When one considers only the much larger populations of China plus India, it is hard to believe ALL the rest of world is producing only 24% of global food production. If it were true that the US was “feeding the world“, how could the US trade deficit be so large and growing. Where does “US makes 76% of world food supply“ come from? I do not believe you.

Brazil is world’ largest suppler of beef, coffee, OJ, and last year surpassed US in soy beans. Pigs and chickens I don’t know relative standing of US and Brazil, except Brazil’s exports a large and rapidly growing share of global production.

They are trading their future for green cash (of questionable value. I feel sorry for Brazil. Icredible Wealth concentration in the few hands+marginalization of the rest of losers + short term profit boosting=long term disaster.


Recall the question related to 50 years hence. The intrinsic natural advantages of Brazil will be developed whereas US has no more virgin land to put under the plow. In fact as pesticides contamination spreads, roads and shopping centers etc. are built, US is losing agricultural land.

Man, Brazil rain forrest soils are largerly NOT suitable for the intensive, western style agriculture. Soils are too thin and are easily eroded. Brasilians are killing their future for the short term profit (for the few, very few). They will get dusty moonscapes as a payback.

Have you been to the USA? I doubt. If you lived here, you would notice huge amounts of lands free of any agricultural intrusion. Roughly, 50% of the lands suitable for agriculture is not tilled AT ALL in the USA. Under tilled I mean used for anything related to agriculture (like pastures, hay, etc.). In my area (East TN. fairly fertile soil. lots of rain and sunshine.), you need to look hard, very hard to find signs of agriculture (mostly, it'll be cattle grazing on the land, which was who knows when touched with a plough). Farming in the USA is largely concentrated in the few states and greatly specialized (to the absurd levels). For example, you'll have hard time of finding an apple tree outside of MI, NY, OH, Washington states.


When one considers only the much larger populations of China plus India, it is hard to believe ALL the rest of world is producing only 24% of global food production. If it were true that the US was “feeding the world“, how could the US trade deficit be so large and growing. Where does “US makes 76% of world food supply“ come from? I do not believe you.

I am not sure about the actual % share of USA in the global food market: but it CAN feed Earth, that's for sure. Trade deficits are not compensated by agriculture because:
1) food stuff is dirt cheap compared to the manufactured goods and services; 2) any sane country tries to preserve its food independence by direclty or indirectly supporting local farmers;

Brazil is at a competitive advantage over the US in agriculture because her growing season is all year round...American farmers are actually moving to Brazil to get ready for this new agricultural power. Brazil's agricultural power is still largely untapped.

Brazil is at a competitive advantage over the US in agriculture because her growing season is all year round...American farmers are actually moving to Brazil to get ready for this new agricultural power. Brazil's agricultural power is still largely untapped.
I dont know if you observe what crops Brazil grows it is geared to feed the Northern Hemisphere , regulated and prices determined by the Northern Hemisphere . A good indicator of if Brazil had a strong internally determined agricultural policy would be the growing of industrial crops such as Rubber and Cotton both are grown in modest amounts . The Brazilian agriculture is simply geared to feed us fat bastards in the affluent West .

The way I see it, if America can no longer dominate the world with the dollar, they will use shotgun politics instead, so much for the free-market banter....

Not to be a doomsday leftwinger, but I expect many more conflicts will come and oil will be the stakes, apperently Bush has no New Deal in his deck of cards....

Most interesting is the new interest in African oil and developing new fields overthere. This is actually a wise move in the short term as the flow of oil in the Middle East is rather costly these days. However Africa will therefore be the scene where Cristianity and Islam will collide hard. The first examples we have seen in Nigeria, Gabon and Kenia will follow soon.

It occured to me that with outproducing and outconsuming the usa, the chinese are actually waging a war against the usa hegemony.

What would happen if the chinese threatened to just flood the worldeconomy with their $ trillion green papers, it would be like dropping a nuke...

For the time being Bush attention is with Bin Laden videotapes and the middle-east while Beijing can smoothly operate in the shadow, have north korea make a lot of noise from time to time, to keep washington additionally busy and buying time for Iran to develope its nukes so that Washington can not just invade those oilfields as well...

Interesting, at least to me, to read some posts made back in 2004:

To me as well. But those of us who have been voicing our concerns about megatrends for some time now are sure to be dismissed as cassandras until the bubble pops. Oh, well. Let's say it anyway: People, get ready.

Interesting, at least to me, to read some posts made back in 2004:

So why didn't you just read them instead of bringing them to the forefront?

Baron Max

So why didn't you just read them instead of bringing them to the forefront?

Baron Max
So that you could post something useless in it.

In answer to thread's question: Probably not, but it is an omen of "de-industralization" in many countries, like Brazil. Because many people now want to get out of dollars are doing what I did 5 years ago - I.e. invest in the bonds and stocks of other countries, where the currency is appreaciating, in stead of dropping, as the dollar is going down at an ever increasing rate. These "other currencies" are appreciating faster inpart because of this demand for the local currency!

To use Brazil as an illustration:
About a year ago it took about three Brazilian Real to buy a dollar, now only two will buy a dollar. This hurts the manufactures who export (and must use their dollars earned to buy Real to pay their Brazilian workers.)* Some very export oriented factories are closing - hence "de-industrialization" Part of the problem is that China (an others) are losing farmers to their cities (~a million/month) and importing more soybeans etc at nearly twice the price. Why Brazil still accepts falling dollars, instead of likely to rise Yuan, I do not understand - stupid habit I guess.

In addition to the influx of dollars earned by agricultural and mineral exports (Brazil is China's main source of iron ore and important in others), the “rich and wise” are getting out of dollars, as mention in first paragraph. Here are some numerical facts showing this:

In all of 2006 FDI into Brazil was 18.8e9 dollars
In first quarter of 2007 FDI was $6.578
In March 07, FDI was $2.778e9

Clearly, an accelerating flux of dollars into Brazil (and many other countries). If only the March rate is the average for 2007 then $33.336e9 will enter Brazil in 2007. That is 77% great than last year.

The Brazilian central bank has been buying up these unwanted dollars to keep the Real from getting even stronger against the dollar, but this is costly. The dollars it converts to US treasury bonds yield only half of what the central bank must pay on the bonds it issues to raise the funds used to buy the dollars (Can not simply print Real, as that would cause great inflation.)

Dollars the central bank bought
In all of 2006 = $21.5e9
In first quarter 2007 = $21.9e9 (More in 3 months than all of last year!)
In March 2007 = $8.3e9 Which also indicates the ever increasing buying is continuing. If that rate is extended, for this year bank would buy $99.6e6. There is no way the Brazilian central bank can buy five times more than it did last year, when it essentially doubled its holding of dollars. Simply cannot afford it.

Brazil cannot even prevent the rise of the Real, certainly not the collapse of the dollar. The dollar is going down globally. See data on the 6 most important countries (China not included as it is still effectively pegging Yuan to dollar and thus going down with it to increase it already large exports) at:

http://www.sciforums.com/showpost.php?p=1365190&postcount=4

Note there also that the rate of annual decline is accelerating. For example, against the Rupee rate of decline has increased by 201% and against the Real by 263%!

India has already taken step to limit the influx of dollars. (FDI is limited and the left wing government is not allowing foreigner to buy control of many industries.) Brazil must do the same soon. I think Brazil should tell China to pay in Yuan. - Not let China push its increasingly worth less dollars off on Brazil. If current trends continue, in less than five years, no one will accept dollars i.e. instead of "worth less" they will be "worthless" !!
----------------------------
*Brazil and Argentina have agreed to not pay each other for their imports with dollars, neither wants, but accept the other's currency instead. Many sellers of oil are effectively doing this now. I.e. as soon as they are paid in dollars for it they sell the dollars. - This a big part of why the dollar is going down so rapidly now - few, who can look ahead, want to be stuck with dollars.

I hope America fails and everyone in it dies. I want to see suffering and mass panic in their country (also mine) so I can thrive on it. My life is pitiful and meaningless, by watching those with mortgages and car loans suffer at the hands of the international economy my position just gets better. I will see them crying, sobbing, trying desperately to feed their 2 kids and maintain a lifestyle that isn't realistic. This is the greatest joy I can imagine... let America burn, let it fall into pieces of a puzzle never to be assembled again. Maybe then some females will sleep with me instead of being coe and ignoring me. I'll have a job and laugh at them as they beg on the street for something to survive on, yes that would be a day :)

I hope America fails and everyone in it dies. I want to see suffering and mass panic in their country (also mine) so I can thrive on it. My life is pitiful and meaningless, by watching those with mortgages and car loans suffer at the hands of the international economy my position just gets better. I will see them crying, sobbing, trying desperately to feed their 2 kids and maintain a lifestyle that isn't realistic. This is the greatest joy I can imagine... let America burn, let it fall into pieces of a puzzle never to be assembled again. Maybe then some females will sleep with me instead of being coe and ignoring me. I'll have a job and laugh at them as they beg on the street for something to survive on, yes that would be a day :)You better be making something China needs, and does not make enough of (like food stocks, iron ore, oil etc.) or you will not be so happy for long!

I make nothing, what I have is a simple nature and the will to survive, thus any weaklings I find I will use to build my own empire, an empire that strives to make slaves of the rest of humanity. They will service us as our dogs, while we alone have power. I am going to become a god.

It is not only China where auto factories are being built, instead of closed, as in USA:

“…Volkswagen and GM are the latest in a string of auto makers eyeing Argentina as a lower-cost manufacturing base … as more established markets in North America and Western Europe stagnate. Latin American operations provide sizable profits to many auto makers, including GM and Ford.
Argentina has had 8% annual economic growth rate over the past four years, driven mainly by a weak currency and strong demand for new cars from the domestic market and from Brazil.
Some auto makers, including Ford, are considering Brazil as a source for small-car exports to the U.S.
Argentina has capacity to produce 800,000 cars a year, but on average only 60% of that capacity is utilized. Brazil, by contrast, has a 75% utilization rate on 3.5 million annual capacity. … Brazil's market is four times the size of Argentina's. Many auto makers have the situation where they don't have capacity in Brazil, but they do have capacity in Argentina. Many auto makers may be interested in building cars for Brazil in Argentina as a way to hedge against the more highly-valued Brazilian real. …”
From:
http://news.morningstar.com/news/ViewNews.asp?article=/DJ/200705230215DOWJONESDJONLINE000230_univ.xml