Euro At All-Time High Against the Dollar
By: Matt H
Published On: 9/20/2007 2:08:35 PM
Though the investors were jumping for joy with the recent 1/2% cut in the interest rate, this is a terrible sign for things to come (our economy is near-terminal, and will likely collapse by the time a Democrat gets in the White House). This economic trouble needs to be squarely blamed on Bush's horrible policies that favor a few at the expense of the many.
Not only did the Euro hit an all-time high today in the wake of the dollar's self-inflicted devaluation, but the Canadian dollar is now equal to ours for the first time since 1976.
http://www.nytimes.c...
Such an irresponsible monetary policy by this administration will eventually explode on the backs of our fragile middle-class. However, since we, as a society, don't think much of tomorrow (much less in years to come), this mess will never be discussed by the politicians of any stripe.
What will it take to wake America up?
Comments
good catch. (Info_Tech_Guy - 9/20/2007 2:14:07 PM)
you asked the same question I've been asking for the last 4 years: "What will it take to wake America up?"
Look over at Counterpunch for economist Paul Craig Roberts columns. He repeatedly weaves discussion of the falling dollar in many of his commentaries.
That's a Scary Observation (Matt H - 9/20/2007 2:37:06 PM)
"The US is on a path to economic Armageddon." Thanks for tonight's bad sleep that I can now anticipate!!
Bush Said He Got a B in Econ 101 (Matt H - 9/20/2007 3:55:55 PM)
According to an AP wire report today on the state of the economy, the following exchange took place:
"There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. But he said he didn't see that spreading to the broader economy.
Bush said he was optimistic about the economy. "But I would be pessimistic if I thought Congress was going to get their way - and they're not. We're not going to raise taxes," he added.
Pressed on whether he thought there was any risk of recession, Bush said: "You need to talk to economists. I think I got a B in Econ 101."
In part, this is causing oil prices (Lowell - 9/20/2007 7:39:19 PM)
to climb
to new record highs almost every day. Now at $83.32 per barrel for West Texas Intermediate on the NYMEX. Look for gasoline prices to start climbing again soon...
By the way, what's amazing about $80+ oil prices is that the spike is not being driven by a supply disruption, as in past oil price spikes (1973, 1979, 1991). This time, it's being driven almost totally by demand, a lack of spare capacity in OPEC, a weaker dollar, investment funds, and geopolitical tensions (which contribute to an "anxious market"). We're in a new paradigm, it appears, of high oil prices long-term. The question is, when are we going to start adjusting in a big way?
Inflation, Inflation, Inflation (Matt H - 9/21/2007 8:16:11 AM)
Bush didn't learn the concept of supply and demand at HBS.
That's True (Matt H - 9/21/2007 9:10:59 AM)
Though unlike the Prez, I've never gone to b-school, and it seems like a lot of our necessities like food, healthcare, education/books, and energy go up at rates that harm the middle class and the poor the most. These groups (including me) are more sensitive to the slightest changes, while the people who are forced to leave government because they can't afford to live on whatever the Tony Snows and Tom Ridges of the world take from us, likely are not concerned with the cost of food, healthcare, education/books, energy, etc.
Inflation is NOT under control (snolan - 9/21/2007 9:39:03 AM)
I have no high falutin edumacation at all - but it does not take one to see that the CPI is a cooked book and has been for 7-8 years.
They've removed all the factors that clearly show double digit inflation is happening (fuel costs, food costs, housing costs) just to keep the illusion that inflation is under control.
The tell signs are that the dollar is weak everywhere except Japan (where the Yen is just as weak), that no one wants dollars (via currency exchange anymore), that the costs for food, fuel, clothing, and housing have all grown dramatically in the past 10 years.
Using the cooked CPI to track inflation is like using that General's stats to explain how Iraq is safer now... DOH!
Understated but under control. (loboforestal - 9/21/2007 10:03:58 AM)
No doubt it's understated, main problem has been using "owner equivalent rent" instead of housing prices during the entire housing bubble.
Tom Ianco at Seeking Alpha has a great commentary on it.
From what I can gather, they started this sleight of hand in 1995 during the first Clinton administration so I'm not singling out the Republicans for this. Economists call this Hedonics which is kind of a funny name. Sounds like the name of a new Tecktonic band.
Regardless, I'm still not convinced inflation is out of control and we've seen "inflation concern" stories for the last 25 years but it's not gotten out of control during that time.
You May Both Be Correct (Matt H - 9/21/2007 3:33:32 PM)
Inflation is not out of control, but our wages are not keeping pace, so that our purchasing power may be less than what it was.
How can it be that it takes two incomes these days to support the average household, while in the 60's usually only one adult worked?
I think the politicians are really afraid to ask if we are really better off than we were before they got elected, and they can easily distort any figures to their advantage.
--> but our wages are not keeping pace <-- (loboforestal - 9/21/2007 3:41:06 PM)
Yep. That's the big problem.