The Dollar as a Dark-Horse Political Issue

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Either McCain or Bush can ride this issue, a dark horse
with huge potential.
McCain: Cut spending, reform entitlements -- I'm the guy to do it; the is functionally bankrupt, and the world knows it. And bailing out private companies (Bear, Countrywide; Housing Bill (Bank of American Bailout) is immoral and a hidden tax on Americans; no one bails out the family business that is going under!!! Americans have come under debt, and Joe Biden, the Senator from MBNA, helped the credit card companies rip Americans off. Senator Obama turned to an executive from Fannie Mae to help pick his VP. These men are bought and paid for.
No one owns me; Sarah Palin and I will take on the special interests.
We work for the American people, and they are tired of working harder to make less.
I will change that! Only then, will Dollar be King again.
Obama: Republicans have bankrupted America with their 1920s economic policies; they blame you if you're poor -- they say you're not working hard enough. Then they give tax cuts to people in the top 3% of incomes; you see, the rich don't care. They can invest their money in Euros, pounds, yen -- move it around the world with a click of the mouse, changing their ill-gotten gains into foreign currencies.
You call that patriotic?
We need that money to invest in roads, housing, bridges and hospitals. Only when we balance our budget and invest in America will other countries take us seriously. Only then will America be a destination for capital. America has become a 3rd world nation with a currency to match; Economically, Bush has turned us into a banana republic.
It's time to embrace a Strong Dollar policy.

V Bradley of MA 12:30AM September 06, 2008

I have been to the Harmonic Wealth Weekend, watched the movie and have started the book - it is awesome and shows us how to focus on what we want rather than spending all of our time focus on what we don't want (that is often our reality) - so focus on desire not reality

Glen of CA 3:06AM June 04, 2008

I have been to the James Ray Harmonic Wealth Weekend, watched the movie and have started the book - it is awesome and shows us how to focus on what we want rather than spending all of our time focus on what we don't want (that is often our reality) - so focus on desire not reality!

Glen of 2:39AM June 04, 2008

The weakness of the tying our currency to the gold standard is that the US essentially loses the ability to control its monetary policy. Since most countries do not use gold to strengthen its currency. However, gold is now subject to the volatility of an open market. Can you imagine how much weaker or too strong the American dollar would be based on the price of gold? On top of that, we would have to keep real gold reserves in order to sell on the open market. Gold mining is very expensive and that has to be considered in that as well.
Allowing the dollar to float, while not the most perfect policy, is the most advantageous. No, the way to control the value of the dollar is to control government spending and help Americans find the incentive to save more of their money.

Chris of AZ 5:23PM May 20, 2008

Yet everyone dismissed him as a nutjob who was followed by conspiracy theorists and UFO chasers. He is the only candidate who has argued for the end of the Federal Reserve and the boom bust cycle we have been victims of and replacement of it with the gold standard. This is why the Constitution does not allow for fiat money- our Founders experienced the same problem of a valuless dollar in the late 1700s.
Too bad the American people are a bunch of dumb sheep who will continue to buy the argument that "Big Oil" is ripping them off, or the Saudis aren't pumping enough, or that we have to go back to the 18th century and live without greenhouse gases. If the dollar were tied to gold, the price of oil would have remained steady the past decade.

RustyJohn of WA 12:04AM May 19, 2008

I’ve always been a little skeptical of the new-agey books my wife reads about self-help or changing your life. But she was so impressed by this one (James Ray’s Harmonic Wealth) that I agreed to read it. AND I CAN HONESTLY SAY THAT IT ROCKED!
What I liked about James Ray was that he didn’t just sell you all these fluffy ideas and leave it at that. James Ray breaks it down into applicable lessons and examples and even provided an online study course that helped me to apply the book to my life and come up with ways I can be more “Harmonically Wealthy” – wealthy in all the “Pillars” or areas of my life. James Ray doesn’t just address the money issues or the relationships – he says that all “5 Pillars” – financial, relational, mental, physical, and spiritual - have to work in harmony for you to achieve a truly wealthy life. I like that approach because it makes sense to me and is about results, not hand-holding.
Here’s the link to his website: harmonicwealth.com/read

James Ray Enthusiast of NY 7:17PM May 18, 2008

Measuring the strength of the dollar against the Euro is tricky because the Euro itself is subject to inflation. Also, when the US loses status as a reserve currency, dollars flow out of reserves into the exchange market, thereby reducing the value of the dollar. Likewise, if the Euro gains status as a reserve currency, the EU can temporarily expand the money supply and not experience a decline in the purchasing power of the Euro because the money flows into international reserves and out of the exchange market.
Moreover, appraisal in a market depends not so much on what you're doing now as what people anticipate you'll do in the future. Evidently the world doesn't have much confidence in Benny the Bubblemaker.
Over the period mentioned in the previous post the US was running huge deficits (still is). It has since turned to monetizing the debt because its line of credit is tapped out.
Nominal interest rates are irrelevant of themselves and must be gauged against the backdrop of the real inflation rate to determine whether they constitute 'tightening' or not. And I said real inflation rate, not the Consumer Propaganda Index.
Suffice to say that with interest rates so low at a time when inflation is so high, the Fed is setting us up for double digit inflation. Everything is not going to be all right, and whoever becomes President is being set up right now to be the Fall Guy.

Joe S. of WA 6:18PM May 18, 2008

I think if the U.S. merely intervenes in the currency market in a synchronized intervention with the European central bank and is subsequently willing to back that up if necessary, the impetus for traders to continue to oversell the dollar will diminish. That does not require changing rates, which have likely bottomed out anyway, but just showing that some sort of line in the sand has been crossed. Gov't inaction on the part of the Bush administration is what has let the traders push the dollar lower with impunity; it's a sure and profitable bet at this point. First sniff of losing money on currency bets, followed as I have already noted by a second round of intervention if necessary, will change how the dollar is being played and soften the gap somewhat.

of 6:06PM May 18, 2008

Of course no analysis or explanation could be more wrong than Scott of VA. The dollar was about 1.13 Euro in 1/02 and fell steadily to .73 Euro by mid-07 all the while the Fed was tightening; taking the rate from 1% to 5.25%. It started cutting in 10/07 when it was .70 Euro (now about .65) so almost all the damage was done when rates were going up or at their highest. The real problem will come when the fixed exchange rate currencies (Asia mostly but especially the RMB) are allowed to float. The Chinese have allowed only a modest appreciation as it is in their interest not to devalue the trillions in dollar denominated debt they hold while simultaneously making the export goods more expensive. For what it's worth the dollar is probably oversold against the Euro.

Mark Close of NY 5:33PM May 18, 2008

But the Republicans are such fiscally responsible people....and they've been in charge for over 7 years. I'm confused. Does this mean I shouldn't vote for (I don no nuthin bout economics) McCain?

kmwa of MD 1:23PM May 18, 2008