HotDamn!! You mean I can make money by helping bring down Bush??!!

[HamdenRice]

I was reading the thread cross posted from the homepage of DU about the decline of the dollar. It is really scary, because Bush is playing with fire and doesn't even realize it. If the dollar continues its decline, as several posters noted, we can expect high prices for imported goods (especially fuel), perhaps even hyper-inflation, an unbearably sharp rise in interest rates and recession.

What many posters did not mention is that if you have any savings at all, especially in a 401K or IRA it probably makes sense to put them in Euro denominated index funds. (This isn't financial advice, just discussion.)

It occurred to me that this issue is linked to the many threads about boycotting republican businesses. I feel that boycots of most businesses are not really effective, unless the boycotted business has very direct control over the political group (republicans) you are trying to influence.

On the other hand, the simple act of self-preservation -- getting out of dollar denominated investments and into Euro denominated investments -- not only helps you avoid massive losses to your own wealth, but also helps put pressure on the Bush junta, to rein in its disastrous spending, including runaway military spending.

Finally, I am very scared of George Soros. Remember, he was so worried about Bush that he financed a lot of the opposition in this election. He is even a big investor in Air America.

Did you know that with his currency speculator hat, he appears to be betting heavily against the dollar. You might think that one person, even a billionaire, cannot affect a large nation's currency. But he single handedly forced Britain off the EU monetary mechanism, costing the British government billions of dollars and earning himself profits of over $1 billion in a single day. He has also "raided" currencies in Asia and Latin America. In part it is tha add on effect: currency traders see what Soros is doing and copy it.

Shouldn't we?

[Cleita]

1. I think it would be more effective to move assets out of the

country like to Canada or any other with a stable economy. The drain will affect the government in charge, plus it will preserve the value of ones savings and invesstments. I really feel that our money isn't going to be worth much in the somewhat near future, so I'm moving half my assets to Canada. They aren't much but they are all I have.

I don't want to find myself like the Germans after WWI, who found their life savings wasn't enough to buy a sack of potatoes. The Bushistas might do this on purpose to cancel a lot of the debt they have incurred by making them worthless. We would be the ones to suffer of course.

[info being]

2. Yes, any global, non-US investment is a great hedge against your dollars

I've been playing that game for about a year...with a mix of money actually in foriegn currency accounts and a global index fund that has done very well.

When the dollar declines, my non-dollar investments make up for it.

Of course, nobody has a crystal ball and, some say, when interest rates go back up the value of the dollar will improve. In that case, you'd be getting in at the bottom right now. A great site for tracking exchange rates and getting advice is www.x-rates.com.

Any financial move is a gamble.

[Alpharetta]

3. I did it to protect my family from Bush's policies

I like your thinking.

I recently invested in American Century International Bd Inv ( BEGBX) because I wanted to protect our assets from what I see as a very shaky situation for the dollar due to the fact the Chinese central bank has, over the past 4 years, gone from purchasing 10% of all US treasuries at the sales to 50%.

Nice to think it could be part of a wake-up call to Bush's "budget-man" (as in, Bush says he has a "budget-man", he won't call him an economist), if ALL us Dems did this.

[HamdenRice]

4. Have you heard ...

that the Chinese are preparing to dump US currency and obligations in favor of Asian currencies and Euros? I read this somewhere while surfing.

This is really scary: The Chinese creditors, Soros, pissed off blue staters with 401Ks, middle east oil suppliers who are thinking of trading in Euros -- it's shaping up to be the perfect storm for the dollar.

Meanwhile idiot shrub is considering "reforming" social security by privatizing it. This means that younger people's social security taxes, which are supposed to support retired people, will be diverted to their own accounts, and the federal government will have to come up with the money to support current retirees.

I've read one estimate that this will add $2 TRILLION to the federal debt -- this on top of the already blown surplus, cost of current and future military blunders and adventures, etc.

[Alpharetta]

5. I don't think the Chinese would do that

They are doing their best to modernize and build up industries via cheap exports. That's why they want to keep their yuan down and will try to keep the dollar stabile.

They're heavily invested in America so they don't want to crater our economy. But they could. It's amazing how much power they have over us now.

[HamdenRice]

6. It would be a matter of self-preservation ...

Here is one of the kind of article I was coming across. Although it is in the interest of all Asian treasury banks to protect the dollar, they individually want to stem their losses if it looks like the decline of the dollar is inevitable. They, in other words, are in the same position we would each be in -- just trying to avoid losing money needlessly because of shrub's recklessness

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mukherjee&sid=aAwTOe4JIHIo


Andy Mukherjee is a columnist for Bloomberg News. The opinions expressed are his own.

Can Asia Dump Bretton Woods II as Dollar Falls?: Andy Mukherjee
Nov. 9 (Bloomberg) -- President George W. Bush's second term may be a challenging time for Asian central bankers.

With the dollar hitting an all-time low against the euro yesterday, traders are betting that Bush may add to the $412.6 billion U.S. budget deficit, increasing the pressure on the dollar to decline. And unlike during the last three years, the brunt of the dollar's fall may not be borne by Europe alone.


<snip>

There's another important reason why Bretton Woods II may have to be dumped. Nouriel Roubini, a professor of economics at New York University's Stern School of Business, says that the current global financial system can be sustained only if Asian central banks act as a cartel and keep their existing and future reserves in U.S. dollars.

There is, however, no formal cartel. As a result, every Asian central bank will want to protect itself against an erosion in the value of its assets from a decline in the dollar.

<snip>

Losses could indeed be large. Asian central banks own more than $2.2 trillion in foreign-exchange reserves out of a global total of $3.4 trillion. At the end of last year, almost 64 percent of central bank reserves globally were denominated in U.S. dollars, according to the International Monetary Fund.

As Asia tries to diversify out of the dollar, the U.S. currency may decline further. An individual central bank ``can only protect itself if it either shifts out of dollars and into euros ahead of the others, or buys a euro/dollar hedge before everyone else,'' Roubini says.

[Eloriel]

7. What, exactly, makes you think he doesn't realize it?

This serves the globalization masters all very well: reduce American workers to serfs. Rape the Treasury (of however many countries you can), keep all the money and gold and power in the RIGHT hands.

And just what HAS the Carlyle Group been up to lately, I wonder?

[HamdenRice]

8. shrub does not want ...

a financial meltdown on his watch -- especially not one that limits his ability to fund military adventures.

Could you imagine shrub having to pull out of a chaotic, civil war torn Iraq simply because the US had run out of money?

Folks are talking about realignment -- that would realign politics in this country for a decade.