Robert J. Samuelson: Is the dollar becoming unstable on global scale?

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  • JimInSLC Salt Lake City, UT
    May 29, 2013 7:49 a.m.

    @Twin Lights: "We would do well to guard that status as long as we can."
    Yes, and any country that attempts to lower that status by trying to break the petrodollar connection as Saddam Hussein tried, can expect the same as he got. Are the lives of American troops worth keeping that status.?

    Andrew Jackson's attempt to break the hold that the banks held on the economy was not a blunder. The depression that followed was the result of the banks trying to keep that power, showing who's boss. Presidents Lincoln and Kennedy both ventured into that arena too.

    The American people may not remember that the last quantitative easing was to be indefinite printing of money at the rate of $40 billion/month. That money printing is still ongoing. And, it is devaluing the dollar. The price of gas is not going up. The value of the dollar is going down.

    The US must keep the dollar as the world currency to keep interest rates low. A small rise in interest rates and the US will not be able to pay the interest on the national debt.

    Good news; We're gonna be multimillionares. Just like the Zimbabweans.

  • Diligent Dave Logan, UT
    May 29, 2013 6:43 a.m.

    4 of the 5 comments posted before I posted this were insightful, helpful. Thank you!

    Also we need to consider that prices at any given moment are affected by the marginal rate of exchange for any given item. If real estate is demand, because there are more home buyers with sufficient money or sufficient ability at least to borrow, then home prices will rise. The current growing bull market, though, in real estate, seems to be fueled more by the greater number of dollars available, rather than forcibly greater core market demand for real estate.

    Worldwide, market demand is dwindling, because birth rates are increasingly at sub-replacement levels. Sooner or later, despite all other manipulations of currencies, etc, markets are crashing or will crash. Isaiah's prophecy that "the wisdom of the wise shall perish" shall, at least in part, be fulfilled.

    The concept of "population control", as if something got out of hand, is wrong. Populations "grew" because, as one demographer put it, "...not because people suddenly started breeding like rabbits, but because they quit dying like flies". Because people live longer, there are more people. But not for much longer.

  • The Real Maverick Orem, UT
    May 28, 2013 6:04 p.m.


  • 10CC Bountiful, UT
    May 28, 2013 9:54 a.m.

    The key metric in economic news coming up will be the May employment report. If the economy generates rougly 250,000 jobs (or more, hopefully), and keeps it up for a few months in a row, the Federal Reserve will begin to taper off it's purchasing of bonds, and eventually will begin selling some of its portfolio of debt.

    That will signify the end of the Great Recession, though the employment landscape has changed underneath, via globalization and technology, and for that reason we're likely to see a slower growing economy for the foreseeable future.

    Look at Walmart as an indicator for how the lowest classes are doing. Walmart's sales are essentially flat, they're employing fewer workers but with more stores as people do their shopping or (at least product research) online.

    With fewer people retail employees (which is now the largest sector in our economy), the demand for cheap goods from Walmart will remain stagnant.

    Ironically, if Walmart would boost salaries about 15%, it would likely have a stimulating effect on their sales and ripple through the retail sector, lifting it up.

    For Walmart, a lower payroll = fewer customers.

  • Irony Guy Bountiful, Utah
    May 28, 2013 9:48 a.m.

    Money is not "printed." It exists only in the minds of human beings. If there is demand for it, the sovereign can "create" it, as banks used to do in a much less stable world. What they're really doing is expanding credit. People who believe in hard money believe in an illusion. Recall Hard Money Nitwit Andrew Jackson's cosmic blunder with the Specie Circular, which killed off the credit markets and plunged the USA into a 10-year depression.

  • Hemlock Salt Lake City, UT
    May 28, 2013 9:21 a.m.

    "Quantitative easement" which is another name for printing more money is not the way to preserve the dollar. The ruined Weimar Republic which led to the NAZi take over, is but one example of flawed use of the government printing press.

  • Twin Lights Louisville, KY
    May 28, 2013 6:10 a.m.

    The dollars status as the world's reserve currency brings a lot of advantages. The interest rates on treasuries are much lower than they would otherwise be. Our currently high national debt would be much pricier if our reserve status were lost or somehow abandoned. With much more expensive debt, our tax rates would have to significantly rise and/or our spending dramatically decrease. Higher interest rates would ripple throughout the economy and inflation would surge.

    Our status as the world's "safety deposit box" gives us outsize influence on the world economic stage. We would do well to guard that status as long as we can.