Caps, you layed down good points all around. The only area I'd veer off from your post is on the buy American part.

Let me point out an example from this very same website from not more than a couple weeks ago.

I'm on my 3rd 4th gen Camaro, and I layed out the flaws in the car that made them junk to the average car buyer. In particular I layed into an obvious flaw in them, the power windows. The PW motors are pure s*it. There's no legitimate reason on the planet that justifies having them in the car. There's PW motors from cars built in the 70s and 80s that still work fine, yet these things barely last 2 years of normal use.

Know what someone actually had the ***** to write in response after defending some of the crap on the car?

"Buy an aftermarket power window motor, and the problem is solved".

What killed me is that the poster actually had no clue as to what he was actually saying with that post! I was so dumbfounded, I just simply left that thread alone from that point on. Here's someone saying:

1. It's perfectly OK to accept crap.

2. That aftermarket people with less than a fraction of the resources of the General Motors Corperation can make a routine item better.

3. That this person feels I should be willing to finance the next 4 to 6 years of a good portion of my hard earned cash not just on car payments, fixing and repairing something that everyone else seems to be perfectly capable of making right and lasting beyond the warranty.

Caps, you're right in that so many people simply don't care anymore, but what's also glaring is that people no longer hold anyone accountable. So when the public does look elsewhere for goods because of the laxidasical attitude towards even the basic standards of quality the marketplace demands, we are quick to blame them instead of blaming these people who put "Buy American" ahead of "Make our products good".

There's plenty of blame to go around, and I think your post nailed most all of it.

*We don't care.
*We have put money ahead of everything else.
*We have key decisionmakers who have intrests that aren't quite in the best intrest of the rest of the country.

So here we are today:

*Buick sells more cars in China than the US.
*Ford North America is the only division that's a disaster.
*We pay as much for gas as Australia, but the money goes to oil company executives and stockholders instead of fixing roads, bridges, or anything for the common good.
* We can't fix New Orleans 2 years after it was leveled, but we can spend 100 times that amount every 6 months in that middle east money pit called Iraq.
*The value of our money is poor next to the value of money of other countries.
*...and most ominous, China is paying most of our bills that we refuse to fund (as does any other country that funds our deficit spending).

I'd venture to say I could walk out of my apartment here or out of the house in Phoenix, and walk up to the 1st adult I see, and he or she won't have a clue about any of this. Yet, if I ask about who won the latest "Idol" competition, they'd know.

 

Seems there are 3 of us now who know this is the truth... and care.

Maybe the next President will be able to sell the American people on the fact that Iraq and Afghanistan are the next big "untapped" markets like China, and that we need to establish free trade with them too. They sure have the right political stance to be top-notch traders, and lord knows they have LOTS of things that I would love to buy.... sand, dirt, rocks, oil, and ... ummm... did I mention sand already? Hell, we'll be living like them soon enough... may as well start trading with them.

 

Does this mean buying a Canadian made Camaro is bad too? Or it doesnt matter so long as its not an asian?

 

IMO you want good neighbors. I'd like to see Mexico reach the living standards of Canada before China. Buying Mexican made isn't the same as Chinese made. The USA and Canada have a great relationship. It would be nice to see all of North America on that level.

 

Plus Canada isn't buying up US debt in an effort to exert control over policy.


Speaking of Canada, for those of you who want yet another example of how far in the toilet the US dollar has fallen to date, consider this fun fact:

The Canadian dollar in 2000 bounced between 64 and 69 cents per US dollar.

Right now the Canadian dollar is 93 cents and still climbing. It's likely to be on a $1 to $1 equality to the US dollar within a year.

Basically that means you (actually all of us here in the good ole US of A) are about 1/3 poorer to Canadians today than you were in 2000. Another way of looking at it is if the price of oil didn't change over the past 7 years, while we would pay the same price, Canada would be buying it at 1/3 cheaper than we would (oil prices are based on US dollars).

British pound is now just a hair under $2. It was as low as $1.42 in 2000.

Buying Euro was about 93 cents in 2000. Today it's $1.34.

A dollar used to buy over 1100 Korean Won. Today it only buys about 930.

Imagine if the US dollar continues falling as fas over the next 5-7 years as it has the past 7. On a global market, US land and property would have dropped well over 50% (including that house of yours), which would likely attract not just rich investors but even average middle class citizens from outside the US will be able to come here, buy up property, and live on par with the more wealthy segments here.

Guess that would push down the current middle class farther. Oh well... it's Lindsay Logan who made the front page. Seems she had another bender this past weekend, and checked herself into "Promises" rehab. 2nd time in 4 months.


If it makes anyone feel any better, Mexico's Peso is down less than 10% from 2000... but their currency is largely based on ours.

They might want to start looking at Canada.

No, you can't move there and "own" property. Only lease.

 

Boy howdy! Being in Detroit, my friends and I used to make frequent 20 minute drives across the border to Windsor to hang out on Friday/Saturday nights. It was great. Our buying power was obscene, and made for a fun, cheap night.

I haven't been back over there in at least 2 years. It isn't worth it anymore.

 

Taking a trip abroad and it costing almost half again as much as the trip there taken a few years earlier is an eye opener. Especially when you discover it's not just that country's responsible fiscal policies, but that it's your own money that's gone into the dumpster.

But then again, I recall that US citizens are the least traveled citizens of all first world nations, so that might explain the general obliviousness and the lack of concern as a whole.

 

Heck, there's so much I have yet to see and do right here in the States that traveling to Europe is a distant afterthought right now. I'm sure a lot of people do feel the same way.

 

I seem to remember that from the mid '80s into the early '90s, the Canadian dollar was around the 90 cent level of the U.S. dollar. It has only been in the 60 cent range for a couple of years. In the '70s (not a decade to aspire to, admittedly), it was above the U.S. dollar.

 

So w/c is better? The $ going up or down? 'Cause I seem to recall a lot of people complaining that the Yen's low value give's the Japanese cars unfair advantage over domestics. Now that the $ is going down, there's a new set of complaints. W/c do u guys think would be a better scenario?

 

Ideally, you want things balenced. You want your currency low enough that what you are exporting is competitive with other countries, but you want you currency high enough that you won't be some other country's b*tch.

Some countries have artificially held down the value of their currence to promote their manufacturing base & exports. Japan and now China have held their currency down artificially (or at least consciously pursued policies that kept it down). If the US still had it's formerly massive manufacturing base instead of sending it overseas, we'd likely be seeing a trade surplus right now, pressure to increase the value of the dollar, and more federal income via more taxes coming in.


When the dollar's value goes up against other currencies, in short, we all here in the US become richer and more well off because each dollar we have is valueable. Even if wages stay the same, your buying power on the world stage (remember, economics is international nowadays) is strengthened.

When the dollar's value drops against other currency, we basically become poorer on the world stage because our money is worth less. In this instance, even if your wages remain unchanged, you are actually getting a pay cut and the value of your home and property drops, even though you're paying the same.


Put in an even more personal way:

Oil is bought and payed for in US dollars. We have most the wealth, and are the largest consumer, so it seems our currency is the standard.

Say OPEC jacks up the price of oil 30% over 5 years. Of course, our cost over 5 years increases 30%.

Now, say the value of the US dollar against the Australian dollar and the Euro for example, increases 30% over that same period.

The result is that we are paying 30% more for oil while Australia and the European Union have no change in oil prices at all.

The funny thing is that outside of things related to oil or other imports, the average person in the US has no idea that he or she has gotten 30% poorer, or that in this instance, the price of oil actually has stayed steady....That is until you pull up the price of gasoline in countries and translate from metric and convert the currency and suddenly realize that some countries that have high gasoline taxes have fuel pump prices barely more than our own.

Deficit spending and low intrest rates, or massively high deficits alone is enough to send the value of currency into the dirt.

Throw in other countries willing to buy up Treasury bonds, bills, and securities to fund your government deficit (essentially acting as lenders...who aqre going to want something in return), a manufacturing base that's been largely exported to other cheaper countries (effectively eliminating any chance for us to use low currency value to boost our manufacturing exports and earn our way out of debt), and being the only industrialized country that lays health insurence on the private sector instead of the government taking a major role (saddleling our industries with with liabilities competitors in other countries don't have to deal with), and you have a very bad train wreck in the making.

Although things might not turn into a collaspse to the degree it seems headed to, the sad thing as far as what's actually taking place, it's not an exaggeration.

 

What would be even worse for the dollar is if countries started trading it in Euros. Saddam was planning on doing just that before we went to war with Iraq in 2003 and Iran and Russia are looking into doing that now. Demand for the dollar would drop and supply of dollars would increase. http://news.bbc.co.uk/2/hi/6190865.stm

This is a really good article about the Euro/dollar/oil


Also it looks like the federal government recorded a $1.3 trillion loss last year despite the official $248 billion deficit reported.=
http://www.usatoday.com/printedition...lede29.art.htm

 

Yep. There are some conspiracy people who have theories about Saddam's plan to push Euros over dollars and the war, but I haven't bought into it.

Still, you are correct about the move now afoot to move the standard currency to buy oil from dollars to Euros. If that happens, we all better brace ourselves because things are going to get pretty ugly pretty fast.


For anyone not quite getting the picture:

1. The dollar is already very low in relation to other currencies.

2. The deficit is financed by borrowing from other country's purchases of US debt.

3. A good portion of the dollar's value is due to the fact oil prices are based in US $$.

4. Switching to Euros will drastically cut world demand for US $$

5. Those countries holding US debt would suddenly see the value of their investment (our debt) dropping. What do investors do when the value of their investment drops? They cash in and bail out.

6. The US would suddenly see it's debt jump from the stratosphere to deep space: we would have to not only fork over the value of the debt, but we'd be faced with the ugly choice of either paying the intrest due or going into default. Both are more than capable of sending the dollar into a freefall.

7. The result of a freefalling dollar would be catastrophic inflation. Oil prices in the US would rise as quickly as the dollar falls, as would anything imported. Since most every manufactured good we buy from TV to tableware to Heiniken is imported (not to mention most all of our oil)....well...you get the picture.


The only thing that would hold everything in check is any world dependence on the US economy to buy the goods and services these other countries produce. The US being the world's largest (and ominously, unrestricted) marketplace would probally guarantee that we won't wake up suddenly on the same level as, say, India. But we could very easily end up much like Russia is today. Only difference is that the only restriction we'd have on leaving the country (instead of fear of Russia's government attention) is that here, only the well off could afford it.

 

Just paying $8 USD for a BigMac Meal at McDonalds in Manchester, UK was sobering enough!

I've harped on this for 3 or 4 years now - some get it, some don't.
At any rate, I am glad you are putting your .02 in on this... You are spot-on and I agree 100% with everything you put down.

As for the best trading position - being balanced is optimal - but ONLY if all other intangible issues are on parity as well... things like environmental policies, humanitarian policy, civil rights, free trade, free speach, advertising control, free market, etc. A nation like China could theoretically manipulate their currency to "match" the dollar in face value and debase the "trading issue" as far as finances go, but if they are destroying their land, people, and infrastructure to get there, we will all eventually fall into the black hole they are creating. Remember, we are all living on one big rock hurling through space together... it's not like we in America are not affected by what China is doing to the earth.

Personally, I subscribe to a theory known as "insect politics" when it comes to foreign trade policy. It's pretty simple actually... it goes like this...
"EAT, or GET EATEN."
It's up to us to keep ourselves in the lead - nobody else.
Also, we do not have the luxury of being guaranteed the top rung on the ladder by birthrights (contrary to what 95% of the youngest generations think these days) - you have to fight for freedoms and leadership.

While I have no problem with any person of any nation wanting to better themselves and their lives, I don't want it to come 100% at my expense. I prefer to maintain control of my destiny and sanctity, and provide charity or assistance to others as I can. I do NOT subscribe to the theory that every person on this earth should live the same lifestyle and enjoy the same benefits. This is where "globalism" falls short in my eyes. The USA is (and will keep) losing ground if things don't change, and personally I don't think that's a good thing. I want better for my kids than I had. I want a better place for them to live and work, and I want them healthier than I. These are basic things to want for, but they are getting harder to facilitate when my $USD's are harder to come by, harder to keep, and they are going less and less distance for me in so far as buying the things I need to provide for my family and their future interests. Hence - frustration.

I've exchanged USD's for just about every other major currency around the world during my travels in the last few years, and I can tell you first hand what it is like to pay $1.50 for a BicMac meal as opposed to $8 for the same in another country, and even not be able to buy one at all in some countries because McDonalds is not allowed there. To me, $3-4 USD for a BigMac meal is plenty, and fine... less is a bargain, more is robbery.
This is a goofy, but very simple and understandable, example of how our currency fluctuations affect our daily lives (or decisions to eat a meal anyways).
Imagine living where your salary is what you make now, but it costs you $10 to eat a BigMac meal at lunch every day and that's the cheapest meal you can get. With everything else being proportionately higher, like $5/gal milk, $4/loaf bread, $10/lb meat, $7/gal gas, $60 jeans (levi or Lee or Wrangler basics), $5 bath soap, $100 Bo-Bo tennis shoes, etc... how would YOUR lifestyle change?
You BETTER be thinking about it boys and girls... it's already coming... it's just coming slow and easy so your radar doesn't go off with an alarm.

These words are written... you can print 'em out and bank on them.

 

The thing is...Our dollar would be fine if we were out of debt. The economy is roaring right now, which usually means a country is financially strong or will be strong. Our debt is killing us and needs attention yesterday.

We also need more incentives for "home" companies to stay here. Foreign trade has always been one of the U.S.A's strong suits. Not this service industry ilk our government is trying to expand (your country is dead if you can not produce goods).

Proud, I like your insect analogy. Someone has taken ECON. People that believe in the "We are the world” will cause the whole planet to be poor. That is just how it works.

We have some serious pollicies that need revamped but people will not take notice until it is too late. Every country in the world is fighting for economic superiority. I feel that we forget that and assume that the U.S. will always be on top. I will not. Especially when Government and citizens become complacent.