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white-cossack - Re: Devaluation
I can agree with most of what you are saying, at least in terms of the inevitability of some of the things you are predicting. Campaign promises of tax cuts or limited increases should by now be old news but they are made in every election and broken in every election.
The reality is that there is no magic bullet for the economic mess that exists today, some hard times are ahead for a great many people. When increases in taxation are inevitable, luxury taxes are the most palatable and the most like user fees. It is also very likely that your country is headed for a non traditional reform of its tax system and some form of value added tax (VAT).
posted by
gomedome
on November 9, 2008 at 5:42 PM
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Corbin_Dallas - is that what you got from reading my comment?
Just remember who began the name calling. I have a background in business finance, you apparently do not. As I said, if you have an argument beyond a rudimentary level, let's hear it.
posted by
gomedome
on November 9, 2008 at 5:23 PM
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Re: Corbin_Dallas - I'm willing to entertain any argument you have that cites
Oh..my you really are as rude as they say.......I was trying to strike up a discussion......does it take a lot of practice to be an arrogant prick or is it a natural attribute.........
posted by
Corbin_Dallas
on November 9, 2008 at 4:35 PM
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Devaluation
I believe we are looking at a period of High Taxation, Inflation and the continuing Devaluation of the US Dollar. I personally believe that Obama will be able to accomplish very little at the outset, say the first 6-12 months. However once he consolidates his power base/cabinet he will be able to push just about any program he desires through the House or Senate. He does not face any of the checks and balances that could slow him down since the Democrats hold the majorities in the House and Senate which are supposed to balance the Presidents Power, and now will not. The Republicans can do nothing about what is about to be foisted upon the american people if all the democrats do is vote along party lines. Obama is not the/a "savior" contrary to what his followers profess. He is the most Liberal Democrat there is, rated #1 by "independant" watchdogs. I fully expect that his policies are going to hurt.
If you sit down and seriously look at "the numbers" the "professed" Obama Tax plan, it will not work, there simply are not enough 200-250K+ incomes to fund his agenda. What I expect to see is a taxation rate of 38-42% for incomes above 125K. If I'm wrong great, time will tell.
The 700B "bail out" was actually signed as 810B when it passed. Why everyone doesn't notice that there is an additional 110B in pork that the Democrats tacked onto the bill before the Democrats signed off on it, is beyond me. The bailout will fail - it is nothing more than a short term offset, the problems that caused the melt down have not, can not, and will not be addressed. As long as the Democrats feel that money solves everything, they will just print more of it, tax it and spend it. The markets have not hit their bottom and the economic dislocation we are experiencing will continue to spread. If we don't see a full fledged depression in the next six months we will be extremely fortunate.
In the interim I expect to see at least a 5% increase on all "luxary" items like alcohol, cigarettes, non-green vehicles, fuel (household and vehicle) as well as a continued increase in medical insurance costs. My estimate is that this set of taxs will take effect within Obama's first 6 months in office.
All is not Doom and Gloom however, gold is still maintaining its value just as it always has historically. My grandchildren are saddled with their portion of the 810B bailout because the Democrats did what was expediant, not what was necessary. On my side of this, I am setting gold and silver bullion back for my children, grandchildren, for my wife and myself. I was told thirty years ago that if I set back just 10K in numismatic gold that in 25-30 years It would be worth at least One Million dollars. Looking back I wish I had listened. On the bright side, the same bullion investment rules still apply today as it did then. I am and continue to be a hard asset investor.
I watched my 401K tank and am grateful that I did not have more in it than I did. Mr Obama is not going to give me or anyone else who lost money in the markets/401K's anything. Literally Trillions of dollars have evaporated, the banks are hoarding their borrowed federal dollars, credit is tight and the job lay offs continue. Here in Idaho Micron PC is going under and the Boise/Mountain Home area will soon have 5,000 more unemployed people on its public assistance rosters. This is just beginning of a very hard and brutal road.
All "I" expect to see from the "president elect" is increased taxation, increased spending and an increase in "public entitlement" programs.
posted by
white-cossack
on November 9, 2008 at 4:25 PM
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I think it's impotant for a leader
to inspire the correct type of spirit in the people. Ronald Reagan had that effect on Americans, and it seems so far that Obama does as well.
posted by
calmcantey75
on November 9, 2008 at 4:14 PM
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Corbin_Dallas - I'm willing to entertain any argument you have that cites
real examples and a bit of knowledge on the subject.
But I am not interested in debating rudimentary perspectives and simple math. The problem is far more complex than that but if these things are not something you know a great deal about, I will be patient and try to explain.
As it stands today the US dollar is artificially high against most other world currencies. The 3 levers that can be pulled by an administration are 1. interest rates; 2. the money spigot; 3. currency valuation . . . With interest rates as low as they can go and the money spigot having been wide open for the last few years, manipulating currency valuation becomes the last option. It is inevitable but the consequences are far from all bad.
The loss of buying power is a legitimate concern but it is also a factor that has a direct correlation with a country's ability to sell to others. You are probably not aware of recent trends with your country's largest trading partners. The recent artificially high value of your currency has allowed then to syphon billions in trade and jobs from your economy in just the past few months. This is an acceleration outside of the long evolving trend. As an example, a 10% devaluation would put the brakes on this accleration immediately.
posted by
gomedome
on November 9, 2008 at 4:05 PM
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Also.....
Since the US dollar is the world trading currency, which means all goods and services are priced in U.S. dollars. With a U.S. dollar devaluation, won't the impact on international trade be tremendous? I would think any countries trading with the US will Immediate raise their prices in anticipation of this devaluation.
That would mean all commodities, such as oil, coffee, chromium, copper, iron, etc., would again be setting record prices due the dollar decline and anticipation of the US dollar devaluation. The oil producers know that the dollars they are receiving for their oil is declining in purchasing power, so they raise their prices to protect their investment. I also would think no one would want to hold a currency that is declining in value. Thus they would drop their vast stashs of dollars causing a faster decline?
posted by
Corbin_Dallas
on November 9, 2008 at 4:00 PM
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The devaluation of the U.S. dollar means a decline in the purchasing power of the dollar, which leads to a decline in living standard. For example, if the US dollar declines 40% and you had a million US dollars, the million dollars will only buy $600,000.00 worth of goods and services. You would have lost $400,000.00 in purchase power.
posted by
Corbin_Dallas
on November 9, 2008 at 1:35 PM
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kooka_lives - I stated from the outset that the bank bailout package is
doomed to failure.
It is a band aid applied to a rotting wound. I agree that the "peace dividend" is a prerequisite to any comprehensive economic stimulus package but there is so much more that needs to be done. It is time for a truly effective Buy American campaign orchestrated in conjunction with a controlled devaluation of the US dollar. Ironically, all the aspects of an effective Buy American campaign are already in place. With most US manufacturers registered as NAFTA participants, stimulus at the domestic level should include tax credits for the purchase of American made products to a certain level of gross income. Sending checks in the mail and having consumers purchase offshore products with it does more for foreign countries than it does for the US.
To envelop US produced goods in domestic stimulus would produce a double bang for the buck. The devaluation of the US dollar would reduce the buying power for offshore goods and make US goods more affordable to foreign markets. The premise is simple enough, an incredible amount of US dollars are flowing out of the country, producing burgeoning trade deficits, an effort to repatriate a segment of the manufacturing involved in that trade will produce jobs. Some jobs will never return and the tide is flowing in one direction at the moment, to stop the outflow of manufacturing jobs and eventually turn the tide is the ultimate goal.
posted by
gomedome
on November 9, 2008 at 11:02 AM
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Nicely stated...fine post!
posted by
teddypoet_TheGoodByeFade
on November 9, 2008 at 8:58 AM
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