[MrBill]

$this->bbcode_second_pass_quote('tugboat', 'E')ither I better start building that off-grid homestead or learn to speak Russian/Chinese.

http://www.atimes.com/atimes/Central_Asia/HK22Ag01.html
http://www.atimes.com/atimes/Central_Asia/HK23Ag01.html

[Euric]

$this->bbcode_second_pass_quote('MrBill', '')$this->bbcode_second_pass_quote('tugboat', 'E')ither I better start building that off-grid homestead or learn to speak Russian/Chinese.

http://www.atimes.com/atimes/Central_Asia/HK22Ag01.html
http://www.atimes.com/atimes/Central_Asia/HK23Ag01.html

[Euric]

Today, 2006-11-22 the dollar fell again against major currencies. It is less then one cent away from costing a dollar holder 1.30 to buy a euro.

I just wonder at what point the slow slide will turn into a free fall. What's the magic number? A dollar falling to <75 ¢.

[Revi]

I looked at the Economist's dollar index. The cost of everything has gone up 33% from a year ago. The Euro index went up 23%. That means that all fiat currencies are tanking, but the dollar is really tanking! What are we going to do? I knew that there was a problem with making ends meet, but I never suspected that it was that bad. We've made some signifigant changes to our lifestyle, but the dollar is tanking faster than we can adapt. At the end of the month we are behind where we started. We don't live extravagantly, either. I suspect that we are not alone.

[threadbear]

$this->bbcode_second_pass_quote('Revi', 'I') looked at the Economist's dollar index. The cost of everything has gone up 33% from a year ago. The Euro index went up 23%. That means that all fiat currencies are tanking, but the dollar is really tanking! What are we going to do? I knew that there was a problem with making ends meet, but I never suspected that it was that bad. We've made some signifigant changes to our lifestyle, but the dollar is tanking faster than we can adapt. At the end of the month we are behind where we started. We don't live extravagantly, either. I suspect that we are not alone.

[Euric]

$this->bbcode_second_pass_quote('Revi', 'I') looked at the Economist's dollar index. The cost of everything has gone up 33% from a year ago. The Euro index went up 23%. That means that all fiat currencies are tanking, but the dollar is really tanking! What are we going to do? I knew that there was a problem with making ends meet, but I never suspected that it was that bad. We've made some signifigant changes to our lifestyle, but the dollar is tanking faster than we can adapt. At the end of the month we are behind where we started. We don't live extravagantly, either. I suspect that we are not alone.

[MrBill]

$this->bbcode_second_pass_quote('Revi', 'I') looked at the Economist's dollar index. The cost of everything has gone up 33% from a year ago. The Euro index went up 23%. That means that all fiat currencies are tanking, but the dollar is really tanking! What are we going to do? I knew that there was a problem with making ends meet, but I never suspected that it was that bad. We've made some signifigant changes to our lifestyle, but the dollar is tanking faster than we can adapt. At the end of the month we are behind where we started. We don't live extravagantly, either. I suspect that we are not alone.

[Euric]

http://biz.yahoo.com/rb/061124/markets_forex.html?.v=1

Dollar tumbles to 1-1/2-year low vs euro

NEW YORK (Reuters) - The dollar tumbled on Friday, pushing the euro above $1.31 for the first time since April 2005, on concerns about central banks diversifying their reserves and the greenback's narrowing yield advantage over other currencies.

[Revi]

It seems to me that a currency is just a piece of paper that has a certain value. A year ago the dollar (and the euro) bought me more oil, steel, silver, food and whatever than it does now. As a common man, down here on the ground, we have to use this medium of exchange to buy food, clothes and whatever we need. It seems like everything has gone up much more than the 1% my paycheck is going up each year. I just realized the other day that we can barely keep up with what's happening to the dollar. We have implemented every cost saving measure we can think of. Soon demand destruction happens. People like us won't be able to afford to drive. But, we have a plan for that:

www.sunnev.com

[Armageddon]

demand destruction will occur eventually. The current drop in gasoline prices are only encouraging more driving.

[tugboat]

Where the big guys are putting their dollars:

“US institutional and retail investors have headed offshore in search of higher profits”, writes the Financial Times (October 11, 2006 p. 24). For the year ending October 4, 2006, of the $124 Billion dollars entering all the US equity mutual funds, $110 billion dollars went into funds investing in overseas companies. For the first 8 months of 2006, 87% of total equity flows went offshore……The principal new targets of MNC, banks, pension funds and institutional investors are the ‘BRIC’ countries – Brazil, Russia, India and China……….http://www.informationclearinghouse.inf ... e15728.htm

[spear]

Over on the gold websites there are articles posted on Nov 24th giving the USD 2 1/2 years.
There is also mention that the chairman of the fed and the head of the treasury are making a trip to China very soon.
I think this is not good news.

[Euric]

$this->bbcode_second_pass_quote('spear', 'O')ver on the gold websites there are articles posted on Nov 24th giving the USD 2 1/2 years.

[DantesPeak]

$this->bbcode_second_pass_quote('Euric', '')$this->bbcode_second_pass_quote('spear', 'O')ver on the gold websites there are articles posted on Nov 24th giving the USD 2 1/2 years.

[Euric]

$this->bbcode_second_pass_quote('DantesPeak', '
')Since the upcoming meeting with China is for the purpose of devaluing the dollar vs. the yuan, what does this say about the direction of where the PPT wants the dollar to go?

[tugboat]

What happens to the stock market if there is hyperinflation ? Especially the multi-national company stocks. They are still viable businesses and will they keep operating regardless of the USD value ?

[Revi]

Isn't inflation/tanking of the dollar what's pushing the US stock market up now? Hyperinflation may not be so kind.

[MrBill]

Never under estimate Italy's ability to screw things up nor France's ability to do whatever it takes to protect their own national interests. Or why Asian central banks pull strings in Brussels as well as Washington.

EU economic and financial affairs go to pages 320-339
(see pages 312-313)

$this->bbcode_second_pass_quote('', '[')b]Monday view: Airbus could trigger 'nuclear option' of currency controls

If you have funds across the Channel, or a ferme in Acquitaine, be vigilant. Keep a close eye on Europe's press, because you might one day find your money is nailed more immovably to its Continental home than you had thought.

Four years ago, a small "cellule" inside the European Commission was ordered to draft a report, instigated by Paris, examining the legal basis under EU treaty law for 1970s-style exchange controls. It concluded that Brussels may lawfully freeze capital flows in and out of the EU, and within it, and that this could be done by a "qualified majority" of EU finance ministers, leaving Britain with no veto.

One of its authors told me this was not an abstract exercise. It was to enable Europe to stem the rise of the euro if the dollar goes into free fall, the underlying argument being that Washington should not be allowed export the consequences of its own reckless spending policies through a "beggar-thy-neighbour" devaluation.

The idea was to stop money coming in, though it could equally be used to stop money leaving.

I thought of this study when French premier Dominique de Villepin lashed out this month at the over-mighty euro. "We can't let the European Central Bank act alone on the exchange rate," he said. Segolene Royal, the new Socialist leader, upped the ante a week later, accusing the ECB of "shattering growth".

Then on Friday the euro smashed through $1.30 to the dollar, crossing the line drawn in the sand by Paris and Berlin. This entails a near equal rise against China's yuan. Against Japan's yen, the euro has risen nearly 70pc in six years to an all-time high of Y151. Hence the move by PSA Peugeot-Citroen to build its 4x4 sportif models in Japan.

EU finance ministers have other means short of exchange controls to bring the ECB to heel and cap the euro. Article 111-2 of the Maastricht Treaty gives them powers to shape exchange rate policy, a detail missed by the markets.

If, for example, the Europols strike a deal with Japan to "manage" the euro-yen rate, the ECB has to adjust monetary policy to meet that objective.

This is where it gets ugly. The ECB's Bundesbank bloc would almost certainly resist such a death blow to the bank's independence, which is why the threat of currency controls may ultimately be part of the mix. There is little Frankfurt can do to stop that.

To quote precisely, the report reads: "Should extremely disturbing capital movements endanger the operation of economic and monetary union, Article 59 EC provides for the possibility to adopt restrictive measures for a period not exceeding six months." The freeze could be extended for another six months with a fresh vote, and so on.

After combing through court judgments, these experts concluded that free movement of capital in the EU is not an "absolute freedom" and could be limited in an emergency.

Heavens know where this "nuclear option" would leave the City of London, dependent for its life blood on unhindered dollar flows. Obviously, it would precipitate a membership crisis.

In fairness, I am not suggesting that the free-market Barroso commission would hatch such a Delors-era plot. But the decision is now out of their hands. What matters is whether France could ever muster a majority of EU finance ministers behind such a scheme. The answer is yes, perhaps, in a slump.

For now, the document sits, waiting to be dusted off when capital flows can be said to "endanger" EMU.

That moment has not arrived. Europe's housing boomlet is not quite exhausted. Yet monetary union is subtly unravelling. French growth fell to zero in the third quarter on sliding exports. Italy is trapped in a downward spiral, doomed by a 20pc currency over-valuation. Fitch and S&P have downgraded its debt to Botswana levels.

Last week, EU monetary commissioner Joaquin Almunia warned of Italy's "dramatic slowdown", and of a widening gap in growth rates between eurozone states that could threaten the viability of EMU if it continues. "The adjustment in the euro area has been slower than we would like and we cannot ignore this fact," he said.

My hunch is that Airbus will bring matters to a head. I was told by an Airbus official last year that if the euro exchange rate went above $1.30 for long, the company was "cooked". He said the chances of this happening were almost nil.

Well, "nil" may be here. While Airbus has an order backlog of 2,177 aircraft worth $220.3bn, these delivery contracts are in dollars while costs are in euros. "This is the nub of the problem," said Louis Gallois, the Airbus chief.

In 2004, the group was shielded by currency hedges at an average rate of $0.98. This year the rate is $1.12, and the hedges are expiring fast. Soon Airbus will face the full violence of the spot market. The aerospace champion is so deeply tied up with Europe's sense of industrial self-worth that it will not be sacrificed lightly on the altar of free currency flows. When the French premier vowed to do whatever it takes to save Airbus, I believed him.

[Scactha]

Very interesting. There is actually a counterweapon in existence towards a major currency devaluation? (Read; the dollar hyper inflation scenario)To add further fuel to the fire the market does not know? I am curious to if the Neocons/Fed know.

How about China, Russia, India and Japan? If the EU has dug up an emergency plan it seems likely more players is planning for D-day too.

What will happen if the world refuses to follow the beggar-thy-neighbour scheme?

[MrBill]

$this->bbcode_second_pass_quote('Scactha', 'V')ery interesting. There is actually a counterweapon in existence towards a major currency devaluation? (Read; the dollar hyper inflation scenario)To add further fuel to the fire the market does not know? I am curious to if the Neocons/Fed know.

How about China, Russia, India and Japan? If the EU has dug up an emergency plan it seems likely more players is planning for D-day too.

What will happen if the world refuses to follow the beggar-thy-neighbour scheme?