US Downgrade

[Jadoo]

The worrying thing for those of us in the west' date=' Sriram is that, we have been flattering ourselves that we are better off than we actually are. How does it feel to wake up one week and realise that your money, your house, your pension is worth a lot less than you thought they were worth? More worryingly for the middle aged among us, will our children be poorer than we were? It's a terrifying thought.[/quote'] Absolutely right Doc. Post 2008 the West has not correctly adjusted to the real world economics, we have felt that we can can live with the same budgets and lifestyles we had prior to 2008. It's time for governments to slash budgets and get with the times, we need tolive within our means.

[Ram]

^Oh, business is doing very well. In fact, they are flush with cash both in US & here in UK. It's the governments who are bankrupt, and as a result so are the large public sectors, including NHS, Medicare, etc. And India's no refuge, believe me. There isn't one.

Why do you say that Doc? Think of it when people lose trust in one currency, they go searching for another. As America/Europe fall, Asia will rise.

[Dhondy]

While people bear the pain of a weak currency Sriram, business bears the yoke of a strong one. If you are a trading nation, a strong currency can be an unbearable burden. Look at Switzerland and Japan howling in protest. It's a blessing that the dollar is so weak. US, the great nation that she is, will eventually find a way to trade its way out of trouble. It hurts me that I have to spend a lot more of my pound sterling to visit India, but ultimately it'll help the country I live in.

[kumble_rocks]

At the risk of sounding like broken record , let me summarize my thoughts Any country which loses its manufacturing base is doomed to fail. The only valuable asset that US possess now is the paper dollar. The idea that the Fed can keep printing this without any benchmark to gold is beyond me. Simply put we do not produce anything anymore. The problem with being a service economy is that services are the first thing that consumers eliminate during difficult times. We need to become more of a mixed economy that combines industrial production with service. To strengthen the U.S. economy, the Fed has to stop printing paper dollars. The U.S. dollar has a powerful sway for the very simple reason that oil is priced in dollars. Also , encourage off shore drilling and this will enable the crude oil price to go down big time. Also, have better regulation at the market so that traders don’t have so much sway in the crude price futures. Bring back the a gold standard would put an end to the Federal Reserve’s dominance in the capital flow. BTW , for most of the United States' existence, the value of dollar had been tied to gold and it ended 1971, when President Richard Nixon decided that the dollar could no longer be converted, at a fixed rate, into gold. Also, as regards to Clinton reducing debt it was only the public debt , the intragovernmental holdings went up each year by a far greater amount. So my key points would be - 1. Reduce trade deficit .We need to increase the tariffs on foreign goods so that they are more expensive than domestic goods. Increased tariffs would only apply to countries in which we have a massive trade imbalance such as China. 2. More transparency from the FED. 3. Hybrid form of economy – both service and manufacturing 4. End all wars and foreign intervention , bases etc. 5. Start off shore drilling 6. Tie to the dollar to tangible asset like Gold.

[Jadoo]

^ Sounds like quite a well thought out plan. Doyou mind if I ask you where you apply your trade?

[punjabi_khota]

At the risk of sounding like broken record , let me summarize my thoughts Any country which loses its manufacturing base is doomed to fail. The only valuable asset that US possess now is the paper dollar. The idea that the Fed can keep printing this without any benchmark to gold is beyond me. Simply put we do not produce anything anymore. The problem with being a service economy is that services are the first thing that consumers eliminate during difficult times. We need to become more of a mixed economy that combines industrial production with service. To strengthen the U.S. economy, the Fed has to stop printing paper dollars. The U.S. dollar has a powerful sway for the very simple reason that oil is priced in dollars. Also , encourage off shore drilling and this will enable the crude oil price to go down big time. Also, have better regulation at the market so that traders donÃÕ have so much sway in the crude price futures.

Thats bullshit. We produce technology. Almost every single big breakthrough happens in the US, from Computer Science to biology.

[Ram]

At the risk of sounding like broken record , let me summarize my thoughts Any country which loses its manufacturing base is doomed to fail. The only valuable asset that US possess now is the paper dollar. The idea that the Fed can keep printing this without any benchmark to gold is beyond me

KR, MM here, Howdy! :--D I am sorry but I don’t think I agree with you here. The most valuable capital you can possibly own is not the ability to make things, but intellectual capital. Anybody can make cheap washing machines and DVD players, but its only the select few who have the ability and to create intellectual capital. And the US and other Western countries, with all their hi-tech labs and tons of PhDs and masters students who work in them, are best positioned to create this capital, not just today, but for decades to come. Think of it KR – the US has been in debt for over 60 years now. Debt isn’t something new to them. The problem now is that their borrowing is outpacing their ability to pay back their interest. They committed too much to social security, unemployment benefit and spent trillions on useless wars. The point I am trying to make here is – it is possible to have a strong currency and yet be prosperous. This idea that if you have weak currency, you will be able to make things that can then be sold to other countries, is I think flawed.

[Ram]

Thats bullshit. We produce technology. Almost every single big breakthrough happens in the US' date=' from Computer Science to biology.[/quote'] Woah - you stole it from my mouth, dude!

[yoda]

KR is partially right. There are only so many jobs you can provide with facebook and google and Genentech. You need the blue collar shyte too.

[Rajiv]

..but doesnt small business do OK? you are more than likely to have job security while working at a convenient store with running income

[Jadoo]

Thats bullshit. We produce technology. Almost every single big breakthrough happens in the US' date=' from Computer Science to biology.[/quote'] True, but the problem is that the level of investment; and talking about labour investment which will invaribly drive economy, is far greater in manufacturing these technologies which is currently done outside the US.

[Brainfade]

http://www.geldpress.com/2008/07/us-budget-reporting-deception/ Interestingly this guy says 1957. He claims that the Clinton surpluses were hogwash. The most obvious and interesting trading call at the moment is a short CHF, however I would like to warn you that you need courage for this. I called the Long dollar in early 2008 and long gold in mid 2009. :--D

Not having read the whole thread (and I doubt I will be able to), here is my one and only thought: Folks need to distinguish DEBT and DEFICIT before making any informed comments. What does being in the black mean? No debt? Or budget surplus? If it is the latter, then yes, Clinton left with a budget surplus. But that just meant interest payments on the debt were being made along with other expenses being accounted for with revenue coming in for that year. The overall balance sheet was still red. Most people don't bother to make this distinction, and that is exactly why politicians and the media are able to get away with mis-reporting. Today the debt = annual GDP. Horrible.

[Brainfade]

At the risk of sounding like broken record , let me summarize my thoughts Any country which loses its manufacturing base is doomed to fail. The only valuable asset that US possess now is the paper dollar. The idea that the Fed can keep printing this without any benchmark to gold is beyond me. Simply put we do not produce anything anymore. The problem with being a service economy is that services are the first thing that consumers eliminate during difficult times. We need to become more of a mixed economy that combines industrial production with service. To strengthen the U.S. economy, the Fed has to stop printing paper dollars. The U.S. dollar has a powerful sway for the very simple reason that oil is priced in dollars. Also , encourage off shore drilling and this will enable the crude oil price to go down big time. Also, have better regulation at the market so that traders donÃÕ have so much sway in the crude price futures. Bring back the a gold standard would put an end to the Federal ReserveÃÔ dominance in the capital flow. BTW , for most of the United States' existence, the value of dollar had been tied to gold and it ended 1971, when President Richard Nixon decided that the dollar could no longer be converted, at a fixed rate, into gold. Also, as regards to Clinton reducing debt it was only the public debt , the intragovernmental holdings went up each year by a far greater amount. So my key points would be - 1. Reduce trade deficit .We need to increase the tariffs on foreign goods so that they are more expensive than domestic goods. Increased tariffs would only apply to countries in which we have a massive trade imbalance such as China. 2. More transparency from the FED. 3. Hybrid form of economy both service and manufacturing 4. End all wars and foreign intervention , bases etc. 5. Start off shore drilling 6. Tie to the dollar to tangible asset like Gold.

You sound like you want to vote for Ron Paul. Good luck with trying to reconcile his position on healthcare with yours :-)!

[Lurker]

[rant mode on] Freaking disgusting to see so many Indians pop up with a "we" for United States. [/rant mode off] Thoughts on the subject: a) Was a ticking time bomb waiting to happen thanks to blowing away of the manufacturing base. b) Finance and IT services should have been just that, services. When Financial Institutions, read hedge fund managers, and IT companies (read Facebook) are worth more than Supermarket chains and Automobile giants there is something fundamentally wrong. c) Greed to satisfy Share Market is going to collapse most economies, let alone USA. On one hand every economist suggests more jobs, on other hands companies hiring people are slammed for not doing cost cutting! A fairly recent example. A leading BI software manufacturer, made some good numbers and decided to hire more people. The powers that be slammed it for "hurting the bottomline" impacting share value. In this day and age where Execs are paid by stocks would they really dare to hire? d) Lastly America today is no different than say India. It is not US of 1990s, or earlier, where politicians would quabble but ultimately do what was right for the country. This is more like India where Lalloo will bring the Govt down without any worry about the country. xxx

[Yoda-esque]

[rant mode on] Freaking disgusting to see so many Indians pop up with a "we" for United States. [/rant mode off] xxx

Has it not occurred to you that some of them might be citizens???

[Lurker]

Has it not occurred to you that some of them might be citizens???

It was made in a lighter vein mate. :winky: which is why i put it under rant header..

[Yoda-esque]

It was made in a lighter vein mate. :winky: which is why i put it under rant header..

Maybe I should grow a sense of humour? :(( Might take some time to get used to the lingo

[Lurker]

Maybe I should grow a sense of humour? :(( Might take some time to get used to the lingo

:hysterical: no worries..I am only glad I didnt use Gen-X or u would have chased me down the streets...:((

[Yoda-esque]

:hysterical: no worries..I am only glad I didnt use Gen-X or u would have chased me down the streets...:((

:giggle: aap jaise aadmi ke saath kaun panga lega?

[punjabi_khota]

Yeah, greed to satisfy stock market is SUCH a new phenomenon in the US. In the good old 60s, 70s, 80s and 90s, there was no stock market pressure, was there. :phehehe: