Mahathir warns of a dollar catastrophe

[emad]

Jake Lloyd-Smith, Evening Standard,
30 March 2005

SHARP-tongued Mahathir Mohamad, scourge of currency traders worldwide, has said the US dollar is headed for a 'catastrophe' and will never regain its old strength.

The former Malaysian leader said Washington's bulging deficits would ultimately sink the greenback. 'The catastrophe will come one day because even the most powerful country in the world cannot repay loans amounting to $7 trillion (£3.7 trillion),' he reportedly told an Asian business conference.

The 79-year-old - who pegged his country's sinking currency firmly to the dollar when Prime Minister in 1998 - said: 'It is certainly on the way to collapse.'

Mahathir advised the audience of executives to steer clear of accepting the dollar as it was unstable, and likely to drop further.
http://www.thisislondon.com/news/business/articles/timid399280?source=

[whistle]

1. Is Greenspan addressing this currency fiasco in anyway?

...I think the federal reserve has become totally corrupted by BushCo economic policies and is just protecting its inner circle. What's next, bank runs?

[Warpy]

I think the old bastard is just hoping he'll die in office

before the real catastrophe occurs.

As for a total collapse in the almighty buck, I don't see it. I do see a continued slow slide with inflation in the US the result.

Wages, of course, will continue to be what they are, or pushed even lower.

[whistle]

8. As I remember back during the Eisenhauer 2nd term, the U.S.

..dollar took a deep dive against a number of strong currencies, which in turn brought about deep recession that ensured the democratic win by John F Kennedy over Richard Nixon. Do I have my facts correct on that? I think gold played a big part also. I was kinda young then and knew very little about economics and business, but I heard lots of discussions to that effect.

<snip>

Eisenhower Reelected 1956

Not withstanding the degree of the success of his policies, Eisenhower remained an immensely popular figure throughout his first administration.

However, he was unable to transfer his personal popularity to the Republican Party in general, and in 1954 it lost control of Congress. In 1956, despite a heart attack, Eisenhower announced that he would run for a second term.

The Democrats renominated Stevenson for the presidency and chose Senator Estes Kefauver of Tennessee as his running mate.

They campaigned vigorously for a "new America," for an end to the draft, and for the cessation of hydrogen bomb testing.

In the election, Eisenhower carried 41 states. The Democrats, however, retained control of both houses of Congress.

In January 1957 President Eisenhower submitted to Congress the third consecutive balanced budget of his administration.

Early in 1958 a nationwide recession began, and by midyear the downward trend of the economy had assumed major proportions.

The number of unemployed people rose in June to more than 5 million, the highest level since World War II.

The reluctance of the administration to move swiftly to curb the recession, as well as evidence of financial corruption within the administration, led to a major Democratic victory in the congressional elections of 1958.

By the end of 1958 the recession had been brought under control, and the value of U.S. manufactures returned to their prerecession levels.

In international finance, however, the excess of U.S. overseas expenditures in relation to receipts resulted in diminishing U.S. gold reserves, prompting Eisenhower to order overseas military spending reduced.

On January 3, 1959 Alaska was admitted to the Union as the 49th state, and Hawaii was admitted as the 50th state on August 21.

<link> http://www.emayzine.com/lectures/Eisenhower.htm

[katty]

15. Fed Steeped in Corruption for a long time - chickens come home

to roost--Greenspan is worldwide Fed Bankers whipping boy--he's knows where many, if not most of the bodies are buried-the Puppet Masters have a gun to his head.

[Mr Rabble]

2. this is obvious to just about anyone

with even a rudimentary understanding of economics.

In other words, no-one in this country will even bother to mention it.

After all, there is a new season of Punk'd!

And, Jennifer Anniston is filing for divorce...

[plasticsundance]

3. Is Alan Greenspan Now Between A Rock And A Hard Place?

http://freebuck.com/articles/guest/050329guest.htm

The “conundrum” that Alan Greenspan now faces is a simple one. America is rapidly going bankrupt owing to basic financial incompetence and needs constant infusions of money at the rate of some $2.9 billion dollars a day to keep the illusion of a prosperous economy going for a little while longer. However, the money providers are getting somewhat unhappy and nervous. Because the huge amounts of dollar denominated debt that they hold becomes ever more worthless as the dollar sinks. They have even been complaining publicly about this fact recently can you imagine what they must be saying privately! First the Chinese, then the South Koreans, finally the Japanese. Is this just a coincidence?

America has no choice but to take these economic threats very seriously. Somebody has to keep buying all the new debt and they must continue to hold there old debt at all costs. So now we are seeing some interest rate rises to halt the dollar decline.

[Wright Patman]

10. Shouldn't there be enabling legislation

passed by the Congress requiring the courts to take a second look at whether Brad Pitt and Jennifer Aniston should be allowed to divorce?

There are far more Americans concerned at the breakup of this storybook romance than had ever even heard of Terri Schiavo until two weeks ago.

Whatever happened to the "sanctity of marriage"? < /sarcasm>

[DulceDecorum]

17. Perhaps Bush and his inner circle see

Terri Schiavo as a metaphor for the US ecomomy.

[Kagemusha]

4. The US doesn't have to repay all of it. Just stop digging.

"Ultimately" is also a very long time.

Other than that, no argument.

Oh and, re: post #3 on edit: That's not to say what Greenspan is doing won't work precisely as he intends. It's too early to tell how much is enough.

I'm Canadian but I get paid in US$ so I hope he does *something*. Geez

[OKthatsIT]

16. wait a minute...Govt doesnt have to be responsible for debt?

but Americans are?

[unhappycamper]

5. National debt is difficult to pay back if you have outsourced your

manufacturing base.

[Karmadillo]

6. Our nukes say we're solvent. Want to argue with them?

n/t

[ConcernedCanuk]

7. I think the USA is on the brink of disaster . .

.
.
.

"The Depression" may soon be remembered as "the good old days" . . .

That's OK

Just keep watching the likes of CNN and Soaps . . .

you won't notice . . .

(sigh)

[cliss]

11. You and me both, Canuck.

The US is standing at the edge of the abyss, looking down. This information is not secret, either. It's fairly common knowledge. There are many web sites which address the issue that we're not going broke, WE'RE BROKE. http://www.fromthewilderness.com is a very good one.

Also, a very well-known economist, Steven Roach (economist for Morgan Stanley) has been saying the same thing. About 2 months ago, he pressed the 'Red Alert' button. I read a series of articles where Mr. Roach is coming unglued.

[ConcernedCanuk]

13. And it's not just the US getting itself into it's own mess anymore . .

.
.
.

It got larger the day they bombed Iraq IMO

As the world watched the lies of the invasion unfold, alliances were quietly forming . .

Now they are not quiet

Latin America is getting it together

The EU is getting it together

Russia and China are getting it together

Even CANADA has taken steps to market it's oil among other things elsewhere - CHINA has already visited and invested in some of our OIL resources

The world is doing a "shut out" on the US, and they can't even see it yet

They are to absorbed in their own lies to see the truth before them . .

If we turn off the oil tap, the war machine will die

something the WHOLE world wants, despite our differences . . .

That's my Canuk Opinion anyhoo - -

[Eloriel]

18. Now why would the U.S. worry about any of that

We're the ones with all the bombs, remember?

Plus, there'll be no going down without the whole rest of the world going down too.

/ sarcasm

AFAIC, the rest of the world could have/should have been applying brakes much harder and longer than they have. From what I can see, all they've been doing is warming up/contemplating -- and we've needed more than that.

OTOH, maybe they think that by holding off the can allow the self-imposed death of the bull in the china shop so the rest of the world can prosper in peace. :shrug:

[ConcernedCanuk]

19. countries, no, COALITIONS of countries are forming alliances . .

.
.
.

and they are targetting World Oil supplies, and the US $$$

The World is speaking . .

No more SuperPower USA - we've had enough . . .

listen up

or lose . .

That's how I see it . .

[mcscajun]

20. I'm curious about Steven Roach becoming unglued.

Any links to share? Also, any story with the "Red Alert"?

[XemaSab]

9. I don't get foreign debt

I don't understnad why countries want to loan money to each other instead of keeping their currency at home. Furthermore, why do the taxpayers of these countries put up with this?

[Spazito]

12. Trade, exporting of their products is one reason

and wherever their investments can earn the most based on interest rates is another. Japan and China are propping up the US greenback for the moment because it makes their exports cheaper than US products but it is getting to the tipping point where their investments in US treasuries, etc, are beginning to cost them dearly hence the recent warnings about expanding to a 'basket of currencies' as opposed to concentrating on the US greenback.

[anarchy1999]

14. Oh this is just too much fun! Bwahahahahaha! LOL!

Please do not take this seriously, or the words of Krugman, Stiglitz or who is that other guy, you know the one with the most recent book, "Confessions of An Economic HitMan"?

Most of all pay no attention whatsoever as to what "Mr. Holier than Thou" Buffet and Berkshire are doing. And by all means pay no attention whatsover to Soros.

[12345]

21. So how much time to get things in order before it's too late?