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  • ilap2004 ilap2004 Apr 28, 2010 1:40 PM Flag

    Cost Basis: 43.80 Short -- loving every minute :)


    Bush didn't run deficits remotely approaching Obama's. Maybe you mean he had a weak dollar policy.

    "With you, the fall of the dollar is due to Obama because that is what the Tea Party guys say."

    It's weird how you perceive the idea the dollar is going down long term as a notion originating with the Tea Partiers. It suggests a severe disconnect from reality. Kind of like someone who says that Brazil's currency will fall since they'll have a strong economy. Or low short term interest rates uphold the dollar.

    The dollar has been in decline for some time because of consistent large trade deficits. Now, in order to finance them, we have had to do what? Borrow. Now on top of the trade deficits we have the huge increases in government borrowing. See borrowing is borrowing, whether it's to finance trade deficits or government deficits.

    "Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said the almost three-decade bond market rally may be drawing to a close.

    Excess borrowing in nations including the U.S., U.K. and Japan will eventually lead to inflation as governments sell record amounts of debt to finance surging deficits, Gross said. Pimco, which announced in December that it would offer stock funds for the first time, is advising that investors buy the debt of countries such as Germany and Canada that have low deficits and higher-yielding corporate securities."

    So in your little corner of the world, Gross is one of those Tea Partiers I guess.

    "Again, Rush Ilap, if deficits mattered more than inflation/deflation with regards to currencies, why did the yen appreciate versus the dollar while Japan's debt went through the roof? You do know than Japan's debt to GDP ratio is higher than ours? No, of course, you don't."

    It's well known that Japan has a high govt debt. It's also well known Japan has a very high savings rate. That's what they have been financing their deficits from. They haven't needed other countries to borrow from so their internal deficits are not a factor in the Yen's exchange rate. I guess you didn't know that. On top of that, they don't run trade deficits, they run trade surpluses. In other words, they've been the exact opposite of the US. They don't need to borrow externally. They lend externally. So they have had a strong currency. Is this too complicated for you?

    "Japan, for example, has long carried the highest gross debt to GDP ratio of any major economy (IMF 2009 estimates put it at a whopping 217 percent), and it will continue to do so in the years ahead. Yet the bulk of Japanese debt is owned by the country's pensioners—which makes it an internal problem, one that will likely continue to result in slow stagnation rather than a major economic upheaval."

    The US on the other hand, is like Greece.

    This topic is deleted.
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