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kirkydu (95.52)

Ben, It's Time for a Stronger Dollar

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June 26, 2011 – Comments (36) | RELATED TICKERS: UUP

I mentioned awhile ago that at some point that Bernanke was going to have to allow the dollar to stregthen by quitting the financial crisis money creation and low interest rate policies.  We have bought time with cheap refinancing of debt and now that the Chinese are about done floating us cheap money, it is the time to allow the dollar to rise.

With Congress set to come to some budget cutting package, which will certainly have a lot of smoke and mirrors, but be a cutting package nonetheless, Bernanke has a chance to help Americans standard of living by allowing interest rates to float up and strengthen the dollar. 

This country does not need cheap money to borrow.  Low interest rates are unnecessary unless you are a banker looking for a bonus.  We are awash in debt as it is.  Allow the yield curve to normalize, it is time.

While some people who are invested in multi-nationals will scream and moan about a stronger dollar, the fact is that we are in a demographically driven downturn that IS going to last most of this decade at a minimum.  No amount of dollar weakening is going to bring back manufacturing jobs. If it were, it would have already been noticable.

Also, no amount of cash creation is going to stimulate the economy in a healthy way.  We could create anther debt bubble, but are we really that stupid and delusional???   We are much better off allowing the dollar to drift up against the Euro and Asian currencies, including the impending float sometime this decade of the Renminbi.

A stronger dollar improves the standard of living of 98% of Americans.  The other 2%, yeah it hurts their portfolios  a bit, but doesn't change their standard of living.  It's time to bring back the strong dollar.

The only reason, and I mean only reason, to allow the dollar to continue to weaken over the intermediate term is if in fact the crooks are running the country.  If they still are, then it's time for other more decisive actions. 

While I am not a fan of the social slant of some right wingers or tea partiers, at least the tea partiers have a vague idea that a stronger dollar is a good thing.  I don't like that they want to cut education and health care, I'd rather see the Bush tax cuts for the richest 1% disappear, military spending flatten and community service be required of long term welfare recipients who have no disability, but they have some notion that a stronger dollar is good for most of us.

With what little money we have in the short run to spend, it is time to actually rebuild our infrastructure and pound into solar technology in the south as solar is just about at grid parity with natural gas in places like California, New Mexico, Arizona, Texas and south eastern states.  Those projects would do far more to stimulate American growth, which we need to approach 5% quick if we want to avoid a debt armageddon, than any devaluation program.  With a stronger dollar we could afford the materials we need along with making food and energy cheaper for Americans. 

It's time that the standard of living for 98% of us mattered more than the portfolios of 2% of us. 

Ben, It's Time for a Strong Dollar

36 Comments – Post Your Own

#1) On June 26, 2011 at 9:37 PM, TheDumbMoney (64.50) wrote:

"No amount of dollar weakening is going to bring back manufacturing jobs. If it were, it would have already been noticable."

http://www.bizjournals.com/seattle/stories/2009/11/23/story3.html

http://www.pe.com/business/local/stories/PE_Biz_D_trade14.93a25.html

http://www.aboutcurrency.com/strategies/fundamental/a_weak_us_dollar_how_does_that_impact_you.shtml

http://freshvino.com/archives/3041

http://www.reuters.com/article/2011/04/21/results-dollar-idUSN2126283020110421

Does your post amount to an argument that we should continue to help "the folks" by allowing them to import cheap TVs from China, even if it means the only jobs they will be able to find will be in retail, selling cheap TVs imported from China, since we don't care about "crooks" and the portfolios of those in "multinationals," and since we will see the continued erosion of American exports? 

We live in a country where only around 1% of our companies export anything.  So I guess that's not much of a constituency for a weaker dollar....  Let's hammer 'em and keep the cheap imports a'flowin.

Also, just out of curiosity:  out of a total percentage of all factors of influence, on the dollar, taking into account all of the factors/actors that influence the value of the dollar, what percentage of influence you would estimate that Bernanke and the Fed actually have?

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#2) On June 26, 2011 at 10:24 PM, ETFsRule (99.88) wrote:

"No amount of dollar weakening is going to bring back manufacturing jobs. If it were, it would have already been noticable."

I'm not sure what measures you are using to say that manufacturing hasn't improved... the ISM manufacturing index is up more than 50% since the FED lowered rates to almost 0%:

http://research.stlouisfed.org/fredgraph.png?g=VO

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#3) On June 27, 2011 at 9:26 AM, kirkydu (95.52) wrote:

dumber, if you believe that ISM is a good number than you are delusional.  We are nowhere near where we were fifteen years ago.  The policies we have followed since 2002 have wiped out entire industries.  I'm in the part of the country that leads in manufacturing and it's outrageous what has gone on largely due to DC and Wall Street catering to a very small group.

If profits do not create jobs and job security, then that is a net skim from the economy, which is not what Adam Smith advocated for capitalism.  Those people who are doing the skimming will at some point suffer the same fates as those who skim the mob.

Here's another way I know that jobs haven't come back (besides driving down the street):

http://www.shadowstats.com/alternate_data/unemployment-charts

There are 2 million open engineering jobs in America.  If we educated better that would be 2 million more Americans employed.  There is a huge skill gap in America, which if fixed, a two to four year process, that would eliminiate half of the unemployment issue.  Business and gov'ment need to make certain that educational opportunities are available.  If they don't they ares slitting their own throats.

A weakening dollar will lead to untold misery for tens of millions more.

http://www.businessinsider.com/societe-generale-on-the-dominos-teetering-in-china-that-will-lead-to-an-innevitable-increase-in-world-inflation-2011-5

A stronger dollar isn't about importing TVs.  It's about buying food and energy.

Mercantile policies (and those similar) have failed every time historically.  They are failing now.

I know this is beyond the logical ability of some, but with China rising, and their currency about to float (this year, next year, I don't know, but soon), we had better defend the dollar if we want to continue to get the benefits of being a reserve currency.  We have bought some time by helping undermine the Euro (which we have, which is a sin), but it won't last forever.  The dollar needs to be strong in the intermediate term so that when a global basket (SDR) is developed we are a big part of it.

In the short run, a stronger dollar is about preventing blood in the streets.

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#4) On June 27, 2011 at 9:34 AM, kirkydu (95.52) wrote:

Rule

manufacturing to export goods is not coming back en masse because the trend (you trade ETFs so you know about trends I presume) is too strong.  Other countries want those jobs for their own developing work force and populations.  While a small uptick over time is desirable and doable, we will never go back to 25% or 30% of our jobs being in manufacturing. 

http://www.businessinsider.com/chart-of-the-day-manufacturing-employment-as-a-percentage-of-total-non-farm-payrolls-2010-8

It wold be nice to get back to 12-16% manufacturing.  A stronger dollar is not a detriment to that.  What we need to do, and I pinch myself whenever I have to say this, is listen to Ron Paul, he's right about this, we need to force more self reliance and stop the butt kissing of certain American multi-nationals.  If a company wants to sell in America, then they need to produce in America at least the amount they sell here.

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#5) On June 27, 2011 at 11:57 AM, TheDumbMoney (64.50) wrote:

I didn't cite the ISM, ETF did.

As to my question, what percentage of the value of the dollar do you think the Fed controls?

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#6) On June 27, 2011 at 12:20 PM, ETFsRule (99.88) wrote:

kirkydu: If you think ShadowStats is useful for anything, then you're the delusional one. To be blunt, those are just made-up numbers with no accountability or reproducibility whatsoever.

"If a company wants to sell in America, then they need to produce in America at least the amount they sell here."

What you're describing is protectionism. I would recommend reading this book, where among other things he explains why protectionist policies never work:


Sadly, protectionism is the normal result of high unemployment, and politicians find it very attractive since the foreigners against whom it’s directed don’t vote in domestic elections. American consumers were for decades the buyers of first and last resort for the world’s excess goods and services via U.S. imports. But now U.S. consumers are retrenching, and the world has turned to ultimately ineffective but destructive competitive devaluations to replace their demand.

Rising protectionism is one of nine forces leading to slow global growth in the next decade, as discussed in my book. Furthermore, protectionism and persistent financial woes threaten to turn chronic slow global growth into a worldwide depression.

"...we had better defend the dollar if we want to continue to get the benefits of being a reserve currency."

Don't worry about that. The dollar will be the reserve currency for at least the next few decades. There is no viable alternative.

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#7) On June 27, 2011 at 12:30 PM, TheDumbMoney (64.50) wrote:

I agree with ETFs, there is no viable alternative to the dollar as reserve currency.  That is why China is making noises about a basket.  The Euro has indisputably proven itself to be a non-viable primary reserve currency, though I do not see the Euro-zone breaking up.  (France and Germany will ultimately use this crises to consolidate political power over the periphery, creating a sort of tri-part Euro-government, with itss "heads" in Brussels, Paris, and Berlin.)  The renminbi will never be a primary reserve currency while China remains, in the end, after all the excitement, a country run by an autocratic regime that will manipulate its currency egregiously, in ways that would make Ben Bernanke turn purple.  Nobody will except a reserve currency run by the Chinese government, least of all the other asian nations.  So in this environment, with the U.S. dollar also experiencing weakness, we also see the rise of alternative "hard" currencies as a hedge, because of all fo the uncertainties. 

Note that I am not even per se against a strong dollar.  It's just that A) I think the impacts are far more nuanced than you apparently think; and B) I think you are overestimating the impact of Ben Bernanke's actions thus far on the dollar, and C) you are underestimating impacts on the dollar that nobody in our government can control at all.

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#8) On June 27, 2011 at 12:34 PM, kirkydu (95.52) wrote:

ETFsRule, you are very wrong about two things:

1. The way you see the world.  Every country on earth protects their domestic population.  We should be no different.  Allowing our own corporations to benefit a handful of people at the expense of the vast majority is tantamount to allowing treason.  What I am describing is not protectionism- no reasonable person would see it that way- it is common sense for the welfare of the nation.

2.  I wouldn't be so certain we will be the reserve currency past the middle of the next decade unless what I am saying comes to pass.  The dollar has reached or is very close to reaching the point where it's value no longer commands reserve currency status.  While we have the greatest geography on the planet and half the world's military, we only have about 23% of the world's economy and that will be halved in the next decade or so. Supporting the dollar both fiscally and monetarily is now an issue.

I am a very centrist person and economist advising on millions of dollars for hundreds of people from middle class to CFOs and Presidents of small and mid-size companies.  My understanding is quite good of all of this.  While I veer away from the alarmists, the numbers clearly show that we have a wealth disparity that is too big, a misdirected spending pattern and the largest corporations are not carrying their end of the donkey.  A weaker dollar is likely to create civil unrest, unless the three things in the previous sentence change quickly.

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#9) On June 27, 2011 at 12:56 PM, ETFsRule (99.88) wrote:

"1. The way you see the world.  Every country on earth protects their domestic population.  We should be no different.  Allowing our own corporations to benefit a handful of people at the expense of the vast majority is tantamount to allowing treason.  What I am describing is not protectionism- no reasonable person would see it that way- it is common sense for the welfare of the nation."

I agree with some of your ideas. We should take measures to limit CEO pay, decrease wealth inequality, etc.

However, earlier you described something completely different:

"If a company wants to sell in America, then they need to produce in America at least the amount they sell here."

This is a textbook example of protectionism.

"A weaker dollar is likely to create civil unrest"

A strong currency is much more likely to create civil unrest and higher unemployment, in much the same way that it has been catastrophic for countries like the PIIGS and Japan. Right now, the countries with the lowest inflation rates are the ones suffering the most.

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#10) On June 27, 2011 at 1:51 PM, kirkydu (95.52) wrote:

Well dumber, if you believe Uncle Milt, then the Fed controls most of the value of the dollar via money creation.  I believe they can manipulate it by about third to half.  Other factors contribute, i.e. a massive financial collapse in 2008, chronic debts at gov'ment and personal levels...

ETF, that is hardly text book protectionism.  Read a different book if you think it is.

Oh ETF, you just don't get it on the dollar.  A weaker dollar has not increased employment.  What numbers would you be looking at.  Since the 1980s the dollar has weakened and employment has become less certain and paid less in real terms.  That's fact.

If you don't like Shadowstats, you don't like stats.

We created SDRs boys via the IMF which we used to own more of.  We're the noise makers.  We need to quiet down and fix our currency if we want to buy a few more decades of the massive advantages that being reserve currency brings.  Ultimately other currencies will rise if for no other reason the size of populations, but why accelerate it by wrecking our currency?  There might have been an argument for weakening the dollar in the 1970s to 1980s, there isn't anymore.

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#11) On June 27, 2011 at 1:54 PM, kirkydu (95.52) wrote:

ETF, a question, I know you know the answer.

Why do execs at big companies send jobs off shore?  We know it hasn't benefitted shareholders  the past decade or more.  

...

Right, to enrich themselves.  Requiring an employment level, some ratio of total employment/employment needed to produce domestically sold goods, would act as a defacto limit on executives who have sent jobs off shore simply to get bigger bonuses. 

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#12) On June 27, 2011 at 2:01 PM, TheDumbMoney (64.50) wrote:

"Since the 1980s the dollar has weakened and employment has become less certain and paid less in real terms.  That's fact."

Corrollation, not causation.  I can think of a number of different systemic changes that initiated in the early to mid 1980s (changes to tax code to get rid of high marginal rates, deregulation (especially of financial markets), and free trade mania come to mind), and they do not have to do with Fed policy, or even with the weakening of the dollar more broadly.

Ultimately, the value of the currency depends upon the productivity of the economy, krkydu.  That is why, even when the Chinese peg their currency to ours nominally, real currency exchange causes them to experience inflation in proportion to the amount by which their peg does not match their greater productivity gains.   If the Fed were strongly "devaluing" our currency, we would have significant inflation, which we do not.  (This is one of the reasons China DOES have significant inflation; their central planning authority has outright pegged the renminbi at a grossly undervalued level.)  If the dollar loses its status as reserve currency, it will have virtually nada, nadisimo, nothing, to do with Fed policy, which is precisely designed to maintain a relatively stead price level.  It will have to do with: 1) a decline in our economic might relative to the might of the world, which is happening; and 2) a decline in the perceived economic and political stability of the US, which has HUGELY contributed to the status of the dollar as a reserve currency, and which goes way beyond the actions of the Fed.

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#13) On June 27, 2011 at 5:29 PM, awallejr (79.96) wrote:

Why do execs at big companies send jobs off shore?

Because they can pay their workers 50 cents an hour.  Seriously you really want those type of manufacturing jobs back? The minimum wage, assembly-line jobs?

I do think we have a shortage of skilled workers more than anything, as you seem to acknowledge with your 2 million engineering job openings reference.  But all this has little to do with the dollar, but more to do with educational shortages, economic evolution and globalization.

I am not a fan of a strong dollar mainly because I see little benefit to the average American, although I am sure the wealthy would love it.  I see basically 2 ways to strenghten it (well aside from robust economic growth), reduce supply and/or jack up interest rates.  Now what effect do you suppose that would have on an economy trying to recover from one of the greatest recessions in history?

I am also tired of this weak dollar caused oil to skyrocket argument.  Oil went to $110 because of 2 factors seasonality (which Bernanke was trying to tell everyone with his "transitory" remark) and speculation.  I said several times that it would retreat to $90s and maybe $80s, and it has.  Yet the dollar didn't strenghten by any significance during that drop.

As for food, this country is awash with it.  In fact this country has a serious obesity issue.  You can buy a frozen dinner for $1 at Stop and Shop, or buy an obscenely calorie rich meal for less than 5 bucks at many fast food restaurants.

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#14) On June 27, 2011 at 7:09 PM, kirkydu (95.52) wrote:

Sigh, I guess I do have to repeat myself.  I hate that.  Come, read what I've written the past four years.

yes Dumber, I simplified, I understand everything you said and in fact have said similar many times.  However, the Fed and U.S. gov'ment in general has embarked on a devaluing policy for decades.  Early on that was to offset what you rightly point out as the positives of our currency, i.e. political stability, productivity, etc...  The reasons for devaluing the dollar have lessened, by a lot, since 2007, and we knew it was going to happen years before.  It is time to change course is my point.  Further devaluation will lead to massive inflation within a decade and trying to stop it then will be very painful.  An ounce of prevention could be taken now by stablizing and gradually strengthening the dollar.  Hopefully Kudlow is right (he's usually not).

Awall, you are correct sir, we don't want the low end jobs back.  However, we need to stop off shoring the types of jobs we just spent two decades training people for at the University of Phoenix.  Also, we need to get our skilled people back to work yesterday.  While I voted for President Obama, because I know anything resembling Bushonomics is a extremely damaging to the nation, the Administration has been unfocused and partisan, as opposed to the Republicans who have been focused and partisan, and that has kept jobs from coming back.  We need to rebuild infrastructure at a pace to get every skill person off the bench.  We also need to scream at young people to learn how to do something, anything, related to math and science, from engineering to almost anything the boomer medically need.  There's more of course. 

The point is that a weaker dollar is no longer helping America on net.  It used to make sesne when the strengths of the dollar needed weighting down.  It is not anymore.  We need to lose some ballast wieght on the dollar.  As the world continues to develop, we need a stronger, not weaker dollar.  Gradually, but definitely.

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#15) On June 27, 2011 at 8:07 PM, TheDumbMoney (64.50) wrote:

"Hopefully Kudlow is right (he's usually not)."

Anytime you hope that Kudlow is right, you are begging for disappointment.  If Kudlow were a baseball statistic, he would be an Error.

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#16) On June 27, 2011 at 9:57 PM, ETFsRule (99.88) wrote:

"ETF, that is hardly text book protectionism. Read a different book if you think it is. "

Your plan consists of placing restrictions on imports. Of course that's protectionism.

I understand that you have a specific goal in mind, and your restrictions will be placed in a very deliberate way... but that's how protectionist policies are always implemented.

"Requiring an employment level, some ratio of total employment/employment needed to produce domestically sold goods, would act as a defacto limit on executives who have sent jobs off shore simply to get bigger bonuses"

So, your plan is to limit executive compensation indirectly, by decreasing the profitability of their company. I think we can come up with a better idea than that.

"If you don't like Shadowstats, you don't like stats."

Their numbers are just "estimates", with no accountability, transparency, or reproducibility. Dig into their methods a little bit and you'll see what I mean. I'll post a more in-depth response to Shadowstats in my blog at some point (probably not for a couple weeks).

"Ultimately other currencies will rise if for no other reason the size of populations, but why accelerate it by wrecking our currency?"

Population growth is a very small part of it. Do you realize that the US actually has had higher population growth than China, over the past 5 years?

Productivity growth is a much more significant factor... and your solution is to impose protectionist measures which would inhibit our productivity growth.

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#17) On June 28, 2011 at 1:45 AM, awallejr (79.96) wrote:

we need a stronger, not weaker dollar.  Gradually, but definitely.

Except you haven't given sufficient justification for it for the average Joe in light of my comments.

 

Good discussion btw.

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#18) On June 28, 2011 at 2:19 AM, awallejr (79.96) wrote:

And as for Kudlow, he was arguing how we needed a stronger dollar back in 2008.  And when we got it back then we had one of the greatest crashes in history.  I like his format of opposing viewpoints, I think his personal viewpoints, however, are a different ballgame.

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#19) On June 28, 2011 at 2:53 AM, FourthStooge (88.23) wrote:

You guys could throw as much FUD at the dollar argument as you want. I earn Euros and have been for the last decade. My marginal tax rate is 43%. But I pay less taxes in $US terms than I did when I worked in the US with a 27% marginal tax rate, because my Euro buys about twice as many $US than it did when I left the US.

Also, I have pretty good health insurance, the streets are clean and safe, there is government sponsored education that produces highly paid world-class workers, low unemployment and the general standard of living is pretty high for a vast majority of the people. I almost forgot to mention the fact that I get six weeks vacation per year (and I'm not afraid to take all of it).

With the collapse of the US housing market combined with the anemic $US and my good job earning Euros, I (as well as other foreign currency earners) will be able to buy a nice beach house for a smaller proportion of income than most people in the US with the same type of job. 

So keep arguing that a weaker dollar is okay. I'll be happy if it loses half its value again. 

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#20) On June 28, 2011 at 10:56 AM, kirkydu (95.52) wrote:

Thank you FourthStooge.  A handful of mercs don't see it that way, but they are powerful and own a lot of media.  They are happy to take a bigger piece of a shrinking pie, than earn from a growing pie.

That is the crux of it in America.  Too many people who don't understand that real growth, both in production and strength of currency is what will save us from a demographic kick in the gut that will take decades to overcome if we don't address the issues now.  We can have both, it does not take a weak currency to grow.  Any company that requires a weak currency to compete really isn't that competitive is it?

I have honestly considered selling my businesses and working for a company that will pay me in a stronger currency.  It is rediculous that we have to work harder to offset the falling dollar so that some guys, a percent or two of the population, can skim off the top.

==============

ETF I did not say we should have restrictions on imports, not at any point.  And yes, mechanisms to limit (or reward) exec pay tied to domestic employment make a lot of sense. 

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#21) On June 28, 2011 at 12:25 PM, awallejr (79.96) wrote:

Except Fourth you probably weren't as happy about this time last year when the Euro was crashing, and quite possibly can again.  The unemployed in Ireland, Portugal, Spain, Italy,  and Greece are probably not as joyful as you.

By your second paragraph I assume you don't live in the US and seem fortunate enough to earn a good living.  Others in the Eurozone can't say the same thing.

Unless that beach house of yours is located in the US (which actually might be a smart place to invest), Euro/USD value really is irrelevant in your own locality since it is all relative.

 

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#22) On June 29, 2011 at 9:18 AM, outoffocus (24.49) wrote:

Raise Interest Rates?

and 

Raise Interest Rates Part II

You're preaching to the choir....

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#23) On June 29, 2011 at 10:28 AM, awallejr (79.96) wrote:

Depends on the choir ;p

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#24) On June 29, 2011 at 6:41 PM, kirkydu (95.52) wrote:

Since we have allowed the dollar to become weaker (the past 30 years or so post Volker), real wages have fallen for all but the top 2%, employment has become less certain, national debt has exploded, weath has become more consolidated and the stock market hasn't beaten inflation when health care, food and energy are included (not sure about you but in my house those things count).

A stronger dollar policy is a no brainer.  Problem is, so many people with no brain.

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#25) On June 30, 2011 at 12:48 AM, ETFsRule (99.88) wrote:

"I did not say we should have restrictions on imports, not at any point."

Yes you did. You just don't understand your own idea.

You said (referring to multi-nationals):

"If a company wants to sell in America, then they need to produce in America at least the amount they sell here. "

Well, if a multi-national corporation wants to hire people in other countries to make all their products, you can't stop them, can you? The United States has no authority to prevent a multi-national corporation from hiring workers in other countries.

Instead, your solution is to prevent them from selling their products in the US. That's a restriction on imports, despite your attempts to portray it as something else.

"the stock market hasn't beaten inflation when health care, food and energy are included (not sure about you but in my house those things count)."

Wow, you could not be more wrong if you tried. Here is the relevant graph (both lines are scaled to 100 at the start of the graph to clearly show their respective changes over the past 30 years). And yes, this CPI figure includes health care, food and energy costs.

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#26) On June 30, 2011 at 12:54 AM, awallejr (79.96) wrote:

 kirkydu

You make the right rants but for the wrong reason.  The strength of the dollar wasn't the cause.

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#27) On June 30, 2011 at 2:53 AM, kirkydu (95.52) wrote:

ETF,  I said "stop the butt kissing of certain American multi-nationals." which apparently you disagree with.  I also said "If a company wants to sell in America, then they need to produce in America at least the amount they sell here."  That doesn't imply limiting imports if it's an American company, I specifically said "American multi-nationals".  

I understand the ideas completely. I think what you need to understand is that the standard of living of 98% far outweighs the financial interests of 2%.  When a few hundred thousand people hoard because they think they are entitled, even though all they have generally done is find an invisible hand moving economic inefficiency and exploited it, then it shouldn't suprise those people when tens of millions become frustrated. To support a system that has become increasingly inefficient and corrupt is shameful.  It is time to bring the efficiency back.  And an honest dollar policy would help a lot.

Awall, I didn't say the dollar was the cause directly.  But, a falling dollar absolutely has hurt the standard of living in America the past decade as the reasons for weakening the currency have vanished.

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#28) On June 30, 2011 at 6:51 AM, ath002 (< 20) wrote:

Very interesting discussion.

Awall, would you mind sharing what you think IS the cause of the problems Kirkydu has highlighted?

Kirkydu, your policy regarding the importing into USA would be a very tough sell to the rest of the world. Most people would regard it as protectionism. I think at this moment in time when world economy is so fragile, it would be risky to implement these policies. 

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#29) On June 30, 2011 at 1:37 PM, awallejr (79.96) wrote:

ath002

A strong dollar only works if the US economy was robust.  It isn't.  You pump up the dollar through tightening the money supply or jacking up interest rates during this current crisis and you WILL throw this country into a depression.

You can probably trace the problem back to 1999 with Congress and Clinton removing the restrictions of Glass-Steagal.  With the flames of less lending restrictions begining you then had the SEC, courtesy of Christopher Cox, allowing lenders to jack up their leverage rates.  Then you had Greenspan throw ever more fuel on the fire with cheap money, and finally you had good old fashion greed where lending standards were irrelevant and money was lent, packaged, broken into pieces and sold off to suckers.

I submit to you that the economy's growth under Bush (with Clinton's help by not vetoing the Glass-Steagall changes) was fake in the end.  It created millions of jobs that inevitably had to disappear since they were literally based off an inevitable bubble.

The strength of the dollar was completely irrelevant.  So the bubble burst, the economy crashed and millions were thrown out of work.  The ones who benefited were your CEOs and executives whose incomes increased over 300 times that of the average worker during the last decade. 

Those jobs aren't coming back anytime soon.  And strengthening the dollar isn't going to make it so although you would make the rich very happy.

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#30) On June 30, 2011 at 3:53 PM, kirkydu (95.52) wrote:

ohh awall

you get so much right, then completely misuderstand the dollar.  If the dollar were stronger 98% of America would live better off.  Only a handful of investors would get burned short term.  To that I say so what.  If they get burned they weren't that good anyway, let 'me fall.  There are plenty in the next 20% to take most of those 2% place. 

How many times do I have to point out that a weak dollar has not helped this country the past decade.  Point to one thing it has made better beyond a few multi-national companies being able to squash domestic companies.  A strong dollar would help small business by a ton.  Isn't that supposed to be the growth engine and standard of individual freedom in America.  Help the little guy, let the dollar rise again from it's self induced destruction!!!

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#31) On June 30, 2011 at 3:58 PM, kirkydu (95.52) wrote:

fine, call it a restriction on imports, even though it's not.  If it were, so what!?!  Free trade agreements have hurt the American worker while enriching a small handful of financial overlords.  If those execs want to keep making money on America's labor, treat them better, otherwise, face strict regulation.  There is no reason why the most Americans haven't seen an increase in standard of living in thirty years.  The decisions that have been foisted on them are borderline treasonous and for certain unethical and bad for America's long term.

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#32) On June 30, 2011 at 4:10 PM, ETFsRule (99.88) wrote:

"If the dollar were stronger 98% of America would live better off."

You can keep repeating this, but it's still not true.

"fine, call it a restriction on imports, even though it's not.  If it were, so what!?!"

Like I said earlier, these policies never work - this is explained in the book I mentioned. If we refuse to buy Chinese-made products, then China and other emerging markets will respond with their own protectionist policies. Maybe they'll restrict exports of the stuff we really want. Or, maybe they'll only buy airplanes from Airbus instead of Boeing. Once you start playing these games, everyone loses.

We can use all the restrictions we want against a country like Cuba, because Cuba can't do anything to hurt us... with China it's a different story.

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#33) On June 30, 2011 at 7:07 PM, kirkydu (95.52) wrote:

ETFs, can you read???

What part of "American Multi-Nationals" says limit imports from China???

Jebus.

And really, protecting your own country's standard of living is a policy in failure???  China has done it and passed us because of it.  Wake up.

A weaker dollar hasn't improved standard of living, employment, portfolios etc...  What is good about it?  

ETFs, you are a shill, a liar, a theif or a student.  Maybe more than one.

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#34) On June 30, 2011 at 7:14 PM, awallejr (79.96) wrote:

That was one of the problems during the Great Depression, protectionism became the norn.

But kirk, the strength of the dollar doesn't create a robust economy, strong economic growth does.  Last true robust economic period I can think of really was in the 1950s.  Thereafter the US economy continued to shift away from manufacturing and more to being a services economy.

All predictions for future US GDP are basically in the 2s. That isn't robust.

You want to create jobs you need to get the money into the hands of the small and mid cap companies.  Banks aren't doing it, tho BDCs have.  See here:

  http://caps.fool.com/Blogs/banks-or-bdcs/578607

I ask you this kirk, what specific steps do you want seen that would strengthen the dollar?

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#35) On July 01, 2011 at 2:02 AM, kirkydu (95.52) wrote:

Small and Medium sized businesses are our hope, I agree, I've stated so quite a bit.  A weaker dollar doesn't benefit them for the most part.  A stronger dollar puts them more on par with large companies.

How to make the dollar stronger.  No more QE.  A trillion $ reduction in deficits over the next decade.  I'm good with the $ being 85% from cuts as Repubs said they'd accept (well, until yesterday when they walked out of negotiations). 

Redirection of some budget $ to math/science/engineering education and alternative energy R&D.  Ultimately, scarcity will get us too, so we must have a better domestic energy policy within about a decade or we're uber uckfeyd.

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#36) On July 08, 2011 at 9:43 PM, ETFsRule (99.88) wrote:

"What part of "American Multi-Nationals" says limit imports from China???"

How about this: explain your proposal again, and this time use as much detail as humanly possible. Your idea includes banning the sale of products that were manufactured outside the US, correct?

Do you have any historical examples showing the long-term pros and cons of this type of policy?

"And really, protecting your own country's standard of living is a policy in failure???"

Uh... no, protecting your own country's standard of living is a great idea. Higher standard of living = good.

However, your idea will not protect our standard of living, because, based on historical examples, these types of policies are not effective. Maybe you should try listening for a change.

"China has done it and passed us because of it. Wake up. "

Wake up, eh? Why not expand on this idea?

Isn't it generally accepted that China has protected their manufacturing base by keeping their currency artificially undervalued? In other words, weaker currency = more jobs? I think everyone understands that by now.

"A weaker dollar hasn't improved standard of living, employment, portfolios etc... What is good about it? "

This has already been addressed. Try listening.

"ETFs, you are a shill, a liar, a theif or a student. Maybe more than one. "

Your idiotic policy recommendations are completely indefensible, so you have no choice left but to resort to childish insults. Nice.

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