< HOME  Sunday, December 25, 2005

Grinch steals Christmas; DOLLAR takes a nose DIVE

The U.S. currency had its steepest single-day fall [10 days before Christmas] against the yen since March 2002, after the Federal Reserve on Tuesday dropped the word "accommodation" from its policy statement, interpreted by some as a signal that its 18-month credit-tightening campaign was nearing an end.

[T]he dollar sank 2.7 percent to 116.73 yen , its lowest level in a month.

I'm not sure where the dollar stands today in relation to the yen (if you figure it out, give me a hollar).

But, while NYC commuters were bitching about the shopping time wasted by transit workers who called a strike just before the holidays, the real GRINCH, the little green one with a pyramid in the back, was stealing large swathes of Christmas value from right underneath everyone's nose.

Way to go, commuters, for keeping your eye on the ball!

Keep in mind that "Foreign exchange rates are always quoted in decimal points which are smaller than the actual smallest currency denomination. The reason being that rounding errors in exchange rates can be sizeable when dealing with transactions in millions of units."
Guaranteed, the 2.7 percent value drop took a significant chunk out of Americans' aggregate purchasing power this Christmas. In other words, all the 'made in China' Christmas trinkets Americans bought during the week before Christmas cost Americans more than they would have cost the week before that!

So, how does this insanity work?
Most currencies traded on the Interbank market are floating-rate currencies, meaning that they are subject to the forces of supply and demand, and their exchange rates are determined primarily by the liquidity of the marketplace.
This explains why the mere whisper of a hint that the FED will tighten or release the SCREWS on the US money supply sends money changers into a frenzy.

Another thing to keep in mind:
[E]xchange rates . . . almost always include the broker’s commission for the transaction. After all, even the simplest form of foreign exchange can be a very profitable business, especially when the exchanger has a captive audience.
There you have it folks, they PROFIT, we BLEED!

So, what's the prognosis?
If Americans continue to buy more foreign goods and services than U.S. businesses can sell overseas, the flow of dollars leaving the country will increase and if foreigners do not invest heavily in U.S. assets, the greenback‘s value will fall.

I say good riddance to foreign investors! Don't let the door hit you in the back!

Americans should ditch this filthy corrupted currency and leave foreign investors holding the useless bag of bucks!


At Sunday, December 25, 2005, Anonymous Anonymous said...

We bleed for their greed.

At Sunday, December 25, 2005, Anonymous Anonymous said...

In the 1930's a man in the loop wrote that the stock market crash was planned and carried out in such a way so that a few rich men could become rulers over all.

70 years later a fresh batch of souless Scrooges are gearing up for what seems to be the final blow.

It's deja vu all over again.

At Sunday, December 25, 2005, Anonymous Anonymous said...

Let's get totally in debt to the world then renege on our obligations. What an american you are sir. You should join congress.

At Sunday, December 25, 2005, Blogger qrswave said...

Doc and Anonymous #1: Thanks for sharing your thoughts!

Happy Holidays!


Anonymous #2:

Thanks for your comment.

Ditching a corrupted and devalued currency does not mean defaulting on all legitimate obligations. But, the operative word here is 'legitimate.'

Our so-called DEBT from Treasury obligations incurred on our behalf by our so-called democratically elected officials was unwarranted to begin with.

With the same authority that our government issued bonds at interest, it could have issued interest free bills. Thus, these debts are illegitimate. Nevertheless, I am not averse to reasonable negotiations to repay principal.

However, interest is a scam. So, debts that constitute interest on other debts are also illegitimate.

As for the only legitimate deficit which is the trade deficit for actual tangible goods and labor received, that can be negotiated and paid off in no time by an American economy unhampered by self-inflicted debt and interest.

Finally, foreign exchange of a floating currency should be abolished. It's nothing but OTB, the only difference being that foreign exchange gambles and profits from the exploitation of entire nations, not horses on a track.

Merry Christmas and come again!

At Sunday, December 25, 2005, Anonymous Anonymous said...

Fx comparisons via Yahoo

Currency markets are manipulated by nearly every government, especially the yen. The yen has fallen for the last year because the Japanese government printed something like 30 trillion yen and purchased $US. We're seeing governments all over the world printing their own money to debase it and keep it low compared to the $US. This is a major cause of high prices for commodities, like oil at this time.

What's happen now may be termed a Global Currency War.

For now the Bush administration has a relatively free hand to print trillions of dollars and do anything they want with them. Later there will be an accounting, but anything "stolen" legally now can be kept as long as taxes are paid accurately :)

At Sunday, December 25, 2005, Blogger yusuf chun said...

"All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." – John Adams, letter to Thomas Jefferson

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States" -Sen. Barry Goldwater (Rep. AR)

"The Federal Reserve bank buys government bonds without one penny..." - Congressman Wright Patman, Congressional Record, Sept 30, 1941

"Some people think the Federal Reserve Banks are the United States government's institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers" - Congressional Record 12595-12603 - Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

"When you or I write a check there must be sufficient funds in out account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money." - Putting it simply, Boston Federal Reserve Bank

...But here is the point: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an addi- tional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People. If the currency issued by the People were no good, then the bonds would be no good, either. It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold. Interest is the invention of Satan". - THOMAS A. EDISON


Solid work, bro. Keep it up. Peace.

At Monday, December 26, 2005, Anonymous Anonymous said...

Unfortunately, the writer doesn't know what he is talking about. Better to leave this subject to someone who does.

At Monday, December 26, 2005, Blogger qrswave said...

Monsieur Molineaux:

Why is it unfortunate?

If I don't know what I am talking about, then enlighten us with your wisdom, if you can. My inaccurate analysis can be laid to rest and everyone, including myself, can sleep better knowing that the world is in safe hands. That would be fortunate, I think.

Otherwise, we can assume that you have a vested INTEREST in distracting people from the truth.

At Tuesday, February 21, 2006, Anonymous Anonymous said...

Just for openers, your citation of the Japanese yen at 118 indicates that you are not aware that this is the lowest level for the yen for many years. This indicates that Japanese are selling yen and buying dollars more than ever before. The dollar has been stronger for the past few months because of rising US interest rates. All this is short term, of course, and the dollar is due to fall rapidly at some point in the intermediate future. Speculators could get rich if they knew exactly when. The overall conclusion is that the US has abdicated its responsibilities as the reserve currency, leaving the world's economies in a very unstable situation. Add peak oil to the mixture, and you have a receipe for a generalized disaster.

At Wednesday, February 22, 2006, Blogger qrswave said...

"The dollar has been stronger for the past few months because of rising US interest rates."

So what? Stronger for investors/ moneylenders, NOT for consumers.

By your own admission, I know what I'm talking about, after all. I only wish that I didn't.


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