Alan Greenspan Replacement - The Best Choice

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November 6, 2005

SouthAmerica: Here is what the Chinese are reading about the Summit of the Americas.

Basically, they are saying what we already knew: The US is losing all its influence in South America.


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China View – November 6, 2005
“US faces daunting challenges in Latin America”

MAR DEL PLATA, Argentina, Nov. 5 (Xinhuanet) -- The United States, having long regarded Latin America as its backyard, had huge difficulty in getting its message through concerning free trade, fight against corruption and democracy to the region at the 4th Summit of the Americas.

Moreover, the country is facing gloomy prospects as its policies are failing and its influence further declining in the region, once Washington's close political and economic partner.

In a big setback to US President George W. Bush, the summit concluded on Saturday after adopting a final declaration that failed to clearly support the resumption of stalled talks on establishing a hemisphere-wide Free Trade Area of the Americas (FTAA), which Washington had demanded.

This is regarded as an ominous signal to Washington that the US ambition to set up the FTAA might eventually end up in failure.

What is worse, Bush is suffering an image crisis as his presence here drew tens of thousands of protesters and violent clashes erupted between demonstrators and police here and across the country on Friday. Polls in many Latin American nations show Bush as the least popular US leader in decades.

President Bush's father, former President George Bush, first proposed the establishment of the FTAA in the 1990s and at the first Summit of the Americas in the United States in 1994, leaders from 34 countries who attended the summit agreed to set up such a free trade zone, setting January 2005 as the deadline.

However, talks on such a zone have bogged down because of sharp disagreement between the United States and countries like Brazil, Argentina, Paraguay and Uruguay.

President Bush has insisted that free trade is the best way to reduce poverty and create employment and he pushed for resuming such trade talks at the summit. However, Bush's call fell on deaf ears.

Argentina and Brazil, both major food exporters in Latin America, have made it clear that they do not want to join the FTAA as long as the United States does not remove agricultural subsidies. They complain that Washington's agricultural subsidies would eliminate the competitiveness of farm products from other American countries and increase poverty in Latin America.

Venezuelan President Hugo Chavez, an outspoken critic of the United States, has said the FTAA is "dead" as it only helps large US companies at the expense of Latin American workers.

Historically speaking, Latin America, especially South America, has been cool to the US proposal of free trade and economic privatization as those Latin American governments that endorsed the Washington-backed policies were toppled one after another. To the dismay of Washington, key Latin American countries such as Argentina, Brazil, Chile and Venezuela have been shifting toward the left since then.

Likewise, Bush's call for fighting corruption and strengthening democracy, a central theme in his second term, has drawn lukewarm response from his Latin American counterparts at the Summit of the Americas.

Argentine President Nestor Kirchner, in a joint press appearance with President Bush on Friday, warned that any US involvement in Latin America should be "positive and constructive," a demand that Bush might find hard to accept.

Bush's call for strengthening democracy and fighting corruption has little market in Latin America where poverty reduction is more urgent than corruption and democracy.

Moreover, Latin America has been complaining that the United States neglected the region due to the Iraq war and the war on terrorism.

Observers point out that the United States, to restore its image and influence in its traditional backyard, must first make genuine efforts to help Latin America fight poverty as nearly 40 percent of the 500 million people in the region are living in poverty and some 100 million of them are living on only 1 US dollar a day.


Source: http://news.xinhuanet.com/english/2005-11/06/content_3738539.htm


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November 6, 2005

SouthAmerica: Reply to Libertad


You said the following: “I quote my economic guru: John Rutledge”


I never heard of any economist called John Rutledge.

How do you know this guy? Is he a columnist for one of the major newspapers or magazines?


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SouthAmerica....The following clip was from the thread...The Next Big Problem¨...started by gharghur2....regarding Rutledge...

I quote my economic guru: John Rutledge

"There are two developing stories in this regard worth watching. One is the descent of vulture buyers on US manufacturers. The other is the growing equity stake the PBGC is taking in companies after bankruptcy.

The inexorable margin pressure put on American companies by global price arbitrage systematically erodes their ability to service the (pension and health care) liabilities on their balance sheets. This pushes them into bankruptcy court, where these liabilities are transformed into equity securities held by the PBGC, which is becoming the airline owner of last resort in America.

The companies, themselves, fall into the hands of vulture buyers, who operate without the burden of debt service during reorganization. this produces further pressure on prices and margins, further failures, further consolidations.

This pressure is the force keeping inflation and bond yields from rising and what will ultimately break the back of the Fed's current policy. It is not going to go away."

This is probably the next major problem we will face, and will eventually affect the stock market: large companies, overloaded with overpaid unionized workers and huge pension/health care obligations. Would advise checking your portfolio...
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The possibility of the US push of globalization could very well expedite the elimination of excessive retirement and medical costs of the larger US Companies because the companies are priced in dollars....

If 50% of petrodollars find themselves to be petroeuros...and US home values reflect the devaluations caused by new tax policies...then the core workings of the best US companies which may or may not include international subsidiaries...will be very attractive and affordable by countries with stronger currency values...

For example...if Proctor and Gamble were 50 cents on the dollar in currency conversion terms...the foreign company would strip away the excessive pension and medical costs...and start anew with the best parts of it....

The point is you are already seeing this with domestic corporate vultures with respect to GM...the airline companies...soon to be Ford etc...and thus the US Govt will be asked to print some more money to further dilute the dollar...

Another real time bomb in the US dollar projection is whether or not the other larger countries of the world will enact some form of economic sanctions against the US for its heinous acts in Iraq...

To be sure if another country in the world were to attack another under in an illegal war...there is no doubt that the US would have imposed economic sanctions...which in turn inflicts severe economic malaise to the businesses of that country...

If in fact the US has enacted an illegal war...will the countries through the UN enact economic sanctions against the US for murdering over 100.000 innocent civilians...men ..women..and their children...Or is the USA äbove the law? ¨

This alone will further expedite the movement into petroeuros...

Yeah...it looks like the USA is likely not to benefit from globalization as the US government had thought....now that their best companies belong to someone else...

OR IS THE USA ABOVE THE LAW ????????

This is a fine example whereby academics are educated way way beyond their intelligence.....
 
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November 8, 2005

SouthAmerica: These are only unexpected temporary set backs, and an illusionary pause for investors in US dollars – but after the dust settles I am sure that the US dollar will continue its decline against the Euro. You can bet on that.


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“French rioters drag euro to new low”
By Steve Johnson in London
Published: November 8 2005
Financial Times of London

The euro tumbled to a two-year low against the US dollar on Tuesday as social unrest in France continued to give the market a fresh reason to sell the currency.

The euro fell sharply in Asian trading as reports of arson attracks in Berlin and Brussels raised concerns that the trouble may be spreading to ethnic minority communities across the continent, heightening political risk for investors in the 12-nation eurozone.

“Escalating concern that rioting which has plagued the French capital for 12 straight nights may spread to other countries is the latest uncertainty to affect the single currency,” said Tom Vosa, market economist at National Australia Bank.

This pushed the euro past a key trading level of $1.1760 against the dollar - the euro’s low of 2004 - causing yet more selling as stop orders and barrier options were triggered.

“The events in France are probably the trigger, but then we moved into technical trading,” said Steven Englander, chief forex strategist at Barclays Capital.

The euro slid 0.9 per cent to $1.1711 against the dollar, its weakest level since November 2003, and also fell 0.6 per cent to Y138.00 against the yen.
However the shared currency later staged a modest recovery, fighting back to $1.1783 against the dollar, amid a series of hints as to the likelihood of a near-term rate rise from the European Central Bank, which has kept short-term rates pegged at 2 per cent since June 2003.

Jean-Claude Juncker, the finance minister of Luxembourg, speaking after a meeting between eurozone finance ministers and ECB president Jean-Claude Trichet, said: “We reminded the ECB that it shouldn’t take hasty decisions.”

He added: “We warned about the possible impact of a rise in interest rates on an economic recovery which is tangible but which is fragile given the downside risks that continue to exist.”

However Yves Mersch, a member of the ECB’s governing council, later hinted that a December rate hike was still a possibility.

The dollar continued to rally against a range of European currencies, firming 0.4 per cent to an 18-month high of SFr1.3098 against the Swiss franc and 0.7 per cent to $1.7328 against sterling, a three-month high, before retreating to $1.7421.

The pound was hurt by broadly soft economic data which kept open the possibility of the Bank of England cutting rates once more in the first quarter of 2006 - even as other major trading blocs are raising rates or at least preparing the groundwork for such rises.

The British Retail Consortium reported yet another fall in like-for-like UK retail sales, although this measure only fell by 0.2 per cent in the year to October, better than the 0.8 per cent drop reported in September and the best year-on-year number since March.

Vicky Redwood, economist at Capital Economics, longstanding bears of the UK economy, said: “This survey suggests that August’s interest rate cut and the recent pick-up in the housing market have had only modest success in drawing consumers back into the shops.

“We expect further weakness in the retail sector to continue to weigh down on economic growth, leading to interest rate cuts early next year.”

However the yen continued its recent recovery from lows, firming a further 0.4 per cent to Y117.13 against the dollar and 0.6 per cent to Y204.04 versus sterling.

HSBC argued that the fact that speculative traders are currently short the yen limited the scope for further yen selling and increased the likelihood of a correction.

The bank also saw the yen benefiting from a pullback in oil prices - decreasing Japan’s need for dollars to fund its imports, and a modest increase in speculation of a further revaluation of the Chinese renminbi ahead of President George W Bush’s visit to China later this month.


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are you un culo o que? nosotros no escribimos la basura que tu creas. es bueno que tu vives en la basura de su pais en cualquire lugar esta.

Adios hijo.
 
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SouthAmerica: Reply to areyoukidding


What are you saying on your posting?

I know that you don't have a clue - but we speak Portugues in Brazil - just for your information.


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Dr. Bernake is the best chioce for the job. He used to be a teacher at Princeton so he can dumb down his speeches but still be effective when it comes to the monetary decisions
 
Quote from davidlynch2000:

My prediction is that phony economists who can't wrap their minds around any part of the complexities of the market, who get worked up when someone questions their bizarre market calls, and who can't develop any sort of quantitative model will be wrong on their dollar predictions in 2006.
[/B]
More...

Look at that. My prediction was completely accurate, while SouthAmerica's (very public) prediction of the dollar in a range of 1.50 - 1.60 was completely wrong for the second straight year. Do you have any interest in revising your prediction at this point? How about telling us all again how you will be right some day, for the same reasons you have been mentioning for the past 3-4 years? You can't close out this loser yet (all those calls at 1.50?). It probably won't do great things for your book.
 
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Davidlynch2000: My prediction was completely accurate, while SouthAmerica's (very public) prediction of the dollar in a range of 1.50 - 1.60 was completely wrong for the second straight year. Do you have any interest in revising your prediction at this point?


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December 4, 2006

SouthAmerica: Over the years I have written many articles regarding the US dollar and the euro – and I also have posted information on this forum as I listed below.

In December 2001 I wrote: “The current US dollar based international financial system is about to go through a dramatic change because of the new competition from the euro. I don't know, when or what will trigger the coming events, since no finance minister or central banker wants to be blamed for launching the world into a major international monetary crisis.”

Today I don’t know what central bankers (such as in Brazil) with reserves of US dollars are waiting for to start dumping their US dollar reserves ahead of the herd.

What are these guys waiting for? Maybe they are waiting to hear the sound of the stamped of a herd completely out of control before they decide to take some action?

What are those central bankers from smaller countries are waiting for to convert their US dollar reserves into euros or gold?

The US dollar will continue its decline in 2007 and only fools would hold their reserves in US dollars at this point.

The fools who decide to hold their US dollars at this point should lose their shirt – and they deserve it.

It is possible that in 2007 Ben Bernanke will finally have a nightmare on his hands – we might be very close to reaching that point, but I don’t know exactly when that will happen.

Here is the scenario: Bernanke will have a US economy going into a recession and at the same time the US dollar starts declining against the euro and gold – he will have a bunch of people screaming at him to lower the Fed Funds rate and instead he has to raise the Fed Funds rate in an effort to defend the value of the US dollar.

And my big question is: “At what US dollar value against the euro and gold – Panic sets in on the international currency markets which will cause an imploding US dollar and a massive international monetary crisis bigger than anything that we have seen before.

What is the trigger point for this humongous international monetary crisis?

Which Central Banker will be the first one to cash in their US dollar assets before the herd starts the stamped and we have a US dollar meltdown?

I can see the US dollar to continue its decline in 2007 and forcing Bernanke to raise the Fed Funds rate even though the US economy starts sinking into a deep recession in turn creating a nightmare for Ben Bernanke and the Federal Reserve to handle it.

It is just a matter of time for the US dollar to be trading at
US$ 1.40 = 1 Euro

We will get there. And I repeat once again – with a little patience we will get there.

By the way, I would not write off 100 percent my prediction that the dollar could decline as low as the range of US$1.50 – US$1.60 to 1 Euro.


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