Re: Obama
- From: Rumpelstiltskin <PleaseDoNotReplyByEmail@xxxxxxxxxxx>
- Date: Sun, 04 May 2008 00:28:38 GMT
On Sat, 03 May 2008 18:15:14 -0400, Alan Lichtenstein <arl@xxxxxxxxxx>
wrote:
Rumpelstiltskin wrote:
On Sat, 03 May 2008 13:08:24 -0400, Alan Lichtenstein <arl@xxxxxxxxxx>
wrote:
Rumpelstiltskin wrote:
On Sat, 03 May 2008 08:05:29 -0400, Alan Lichtenstein <arl@xxxxxxxxxx>
wrote:
Rumpelstiltskin wrote:
<snip>
Is the Riyal locked to the US dollar? I hadn't heard
that, though that is true of some countries. There's one
country in South America I think that doesn't even have
its own money, it uses US dollars.
It's locked to the US dollar only to the extent that their oil income is
based on US dollars.
That's "not locked at all".
Without knowing more about the relationship and currency markets, I'm
not going to comment further on this 'linking.'
I do believe that it is also linked to our
currency as well. And that South American Country is Eucador. When you
visit the Galapagos Islands, you won't have any problems with changing
money. You don't have to.
I bet that Ecuadorians who own saved U.S. dollars
are not very happy campers these days!
Actually, when I was in Ecuador two years ago, I found prices then to be
relatively constant to what I would expect to pay in the United States.
What their prices are now, I don't know. I do know that I saw very
long lines of Ecuadorians lined up at the US Consulate attempting to get
work Visas to the US, so I would imagine that job opportunities aren't
great in Ecuador. You may recall that I posted to the unfairness of
allowing the Mexican wetbacks who came her illegally to be
'grandfathered' in while the Ecuadorians had to stand and wait in line,
only because they weren't fortunate to share a border with the US as
does Mexico.
If the Saudi money is not locked to the dollar, their
inflation should be going down at least to the extent
they buy stuff from the USA, since that's cheaper now.
You're forgetting that they have to import a whole lot of other things
that we don't. That's where they get the increased inflation from.
Everything the Saudis get from the USA is 40% cheaper for
them now in riyals, assuming riyals haven't crashed too.
Actually, they aren't. I believe their rate of inflation is 8%, so that
makes up for any other differences.
It would take five years to make up the difference, even if
American inflation were zero. They may have had 8% inflation
a long time as far as I know, though, so maybe the collapse
of the US dollar has just given them back a bit of breathing
room insofar as trade with the US is concerned.
That's
probably a lot of stuff, and they probably haven't increased
their consumption by 40% in just a year or two. So they're
probably enjoying all the cheap goods from America now.
There's probably some much slower "normal" increase in price
in things they get from elsewhere and in things they buy that
are produced within their own country.
I don't have particulars about the Saudi economy, so I can't comment.
I don't regard inflation as "normal" myself, though it is
"habitual". I regard inflation as slow theft, resulting from
governments being overly tempted to spend more than they
have because people would rather see them do that than raise
taxes. That's because people stupidly think they're getting
something for nothing that way. The recent collapse of the
dollar is fast theft, not slow theft, though you probably don't
agree, I'd say based on your apparent views about the crash
of the dollar. Everything's catching up suddenly now with the
deficit spending because chickens tend not to worry about
the wolves until the wolves get really close, but then the
chickens panic and fly home to roost in a flock.
I don't view inflation as theft, whether rapid or slow. I view
inflation as a consequence of economic and governmental factors. I
think that's a more realistic view of the phenomenon.
When we had gold as the standard, there were variations,
but there was no persistent trend of inflation. That should
tell you something about paper money.
Domestic chickens can fly, right? I know domestic turkeys
can't, but I'm such a city boy I don't even know if domestic
chickens can fly or not.
<snip>
Yes, the chart you wouldn't look at shows that the price of
oil in euros has risen from 30 to 70 between 2000 and 2008,
whereas the price in dollars has risen from 30 to 110.
Essentially all the 40 euros increase is price hikes, and forty
dollars out of the eighty dollar increase in price in dollars is
similarly price hikes, the other 40 dollars increase being due
to the falling value of the dollar.
No, Rumple, the only thing germane is the price of oil in dollars.
That seems to me a dumb thing to say, but obviously
you're locked into it.
Because it happens to be the way the market works. So, yes, I am locked
into the real way things work.
The
fact that the value of the dollar vs. the Euro is variable has to do
with how currencies are valued. I tried to explain why that difference
occurs to you, but you seem insistent on ignoring the fact that the two
variables that you seem to think are directly related to each other,
really are not. When you realize that, you realize why your chart is
mostly irrelevant. And I don't see rehashing this, as it would only be
beating a dead horse.
That doesn't seem to me recognizable as anything I was
talking about, but I guess somehow it seems to you that I was.
Oil used to cost 30 euros or 30 dollars. Now it costs 70 euros
or 110 dollars. If you feel we should all look the other way
and talk about something more comfy whenever I bring up the
collapse of the dollar against other currencies, I guess it's
time for me to stop arguing with you about it and just say "I
disagree".
If what you're trying to say is that we should have a strong dollar, I
don't disagree with you. I'm only telling you why things are the way
they are. I'm not condoning them, I'm simply explaining them. You seem
to think that any explanation that is not yours is condoning the
opposite. Despite the fact that your explanation does not jibe with the
way things actually work. But to get a stronger dollar there is going
to have to be bitter medicine we have to take.
As far as I can recall, you haven't even admitted that the
40% drop in the dollar against other currencies means we'll
have to pay 40% more for imports, and also have to pay
more for home-based goods that are affected by imports.
What OPEC
does is manage production, which permits the marketplace to use supply
and demand to price oil. And because the demand is rapidly increasing
in relation to the supply, the price goes up. It helps the dollar
because if we have to purchase oil in some other currency, we will have
to pay in dollars, thereby increasing even more the number of dollars in
foreign hands, and lowering the price even more than it is today.
Unless the riyal is locked to the dollar, that doesn't make
any sense at all, it's just P.T.Barnum stuff. The price of oil
in dollars has in fact gone up much faster than the price in
euros, so the Saudis have not been acting in a haze of
oblivion about the fall of the dollar at all. It makes little
difference whether one pays in dollars or euros or riyals,
since it's easy to exchange money at whatever the going
rate is at the moment. We're not getting a price break
because we pay in dollars: We pay as much in dollars,
above what people pay who pay in euros, as the dollar has
depreciated compared to the euro, so that's a wash.
Again, I repeat: OPEC hasn't raised the price of oil. The marketplace has.
Machts nicht. Oil has gone up, and by more for
Americans than for Europeans.
So? Are you jealous?
I sure wish I'd bought euros, pounds, Canadian dollars
or Aussie dollars in 2000. Even if I sold them now, I'd
still have nearly double the number of dollars. If that's
"jealous", which I don't really see but let's say it is for
the sake of argument, yes I am.
Maybe you're not paying enough attention to what
Voltaire said, that "Louis XIV was a magician, who could
make people believe that paper was money". A dollar
bill is not money, it only represents money, and the merit
of that representation is only based on trust. There's
nothing magical about a dollar bill, it doesn't create
wealth out of nothing. For castaways on desert islands,
dollar bills are only good for burning to heat up their
iguana meat and skua eggs for breakfast.
Voltaire knew little or nothing about currency markets.
He clearly knew more than anybody in the Bush
administration!
Well that isn't hard to do. but he still knew nothing about currency
markets.
He knew how to handle money, there's no doubt about
that. He was born a man of modest means, but became
very rich and eventually powerful enough to defy Louis XVI.
Here's his chateau:
http://www.visitvoltaire.com/voltaire's_later_life_chateau_ferney.htm
Too bad we couldn't have had him
for president, as long as he'd agree not to insult or
persecute the Jews, which to our modern eyes was
a spectacular failing in such an otherwise great man.
It can be understood somewhat as how everybody
behaved in that age, but in Voltaire it's still more
unforgivable than it would have been in a lesser
man.
I don't necessarily think that having a philosopher running government
is a prudent thing to do. After all, there are different skills
required beyond sidewalk philosophy. However, if the American public
goes off its meds, they just might elect Obama and we'll get such a
failure running the government.
I completely agree on most philosophers. I can't
imagine Nietzsche running a government. But Voltaire
was very much the exception. I remember grinning
once while reading an account of Voltaire's early life
that went roughly that "His father wanted to be sure
that he studied law, so that he would always have a
secure means of getting income. His father need not
have worried."
On the other hand, he did piss Frederick the Great
off, when Frederick gave him a very generous income
to stay with him at the German court, and Voltaire
promptly embarrassed him by loaning it out at 20%
interest. They he wrote a pamphlet, anonymously
but everybody realized who had written it, ridiculing
Frederick's belovèd college that he had founded in
order to showcase German intellectual
accomplishment to the world.
.
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