The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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From: Real Man	12/24/2008 4:57:28 PM
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Wiki article on Current account: en.wikipedia.org Question: Are we doing anything like that now? Answer: No. Our policies are as usual: to increase borrowing and spending, which achieves exactly the opposite results. Major US exporters (GM, Crysler, Ford) are essentially left out dry, while major speculators (banks AND hedge funds!!!) are given all the printing press and bailout money. Note that printing press money now enormously exceeds the 700 billion bailout pushed through congress. ZIRP and printing will cause enormous inflation down the road. Did you know US automakers account for 10% of US exports? How about others? Are they saved? No. It turns out, US current account deficit rose because exports fell off a cliff more than imports. The dollar and the bond crisis looms large for the coming year. And, I am really pissed... as every American should be. Note stuff in the bold below from the Wiki article. Reducing current account deficits Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This is generally accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly increase the balance of payments. This can be accomplished by decreasing domestic inflation (e.g. by raising interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers. Less obvious but more effective methods to reduce a current account deficit include measures that increase domestic savings (or reduced domestic borrowing), including a reduction in borrowing by the national government.

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