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Global currency-US Dollar vs. Euro

HghDnsty
Posts: 10
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9/15/2009 8:13:31 PM
Posted: 7 years ago
I'm starting this topic to spur discussion around the U.S. dollar being the global U.S. currency and to discuss how the spending trends of U.S. consumers effect global economies (including our own). I'm curious to have both issues addressed. To start off, here is conversation that started the discussion:

********
I'll answer but I don't want this considered part of the debate, as it's an altogether different and complex area. If we inflate our currency (print more money) we devalue our spending power and put ourselves in crucial economic turmoil in the global economy. The current global stand is the U.S. dollar and if it becomes hyperinflationary, compared to foreign currency, like the Euro, the foreign powers that be could decide to conduct business in a different currency. This would lead to us Americans having to pay more money for foreign imports. Since Americans consume 80% (and I'm pulling this statistic from memory so could be off) of foreign imports this would devastate the U.S. economy. Manufacturers would have more costs of doing business, which, in turn, would result in more layoffs, creating less jobs, having to shift jobs overseas, and put us into an economic black hole. It's all theoretical of course but the end result wouldn't be good for the U.S.

Luckily, the foreign governments know this as well. They also depend on the U.S. to buy the 80% of goods that they manufacturer. This is why China, for example, needs the U.S. to survive, they suffer when we suffer and they also want our dollar to be strong so that when we buy from them they can use those dollars to support their own economy. A weaker U.S. dollar (global currency) hurts EVERYBODY.

The worldwide economy depends on the U.S. I could go on for many hours on this topic but we'll save it for another day.

Cheerio,
HghDnsty
Ragnar_Rahl
Posts: 19,297
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9/15/2009 8:36:34 PM
Posted: 7 years ago
In real terms, the US buying goods from China with the Chinese government's money amounts to the Chinese giving the stuff away.

How is this "vital" to China? Why would they be unable to hand out welfare to locals to the same effect? What the heck do they get out of it anyway?
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Floid
Posts: 751
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9/16/2009 4:38:18 AM
Posted: 7 years ago
China with the Chinese government's money amounts to the Chinese giving the stuff away.

Except that we pay China something like 350 billion a year in interest payments alone for the money they lend us. So China lends us money, which we use to buy Chinese goods (which bolsters their economy)... on top of that we pay them hundreds in billion in interest (we fund their government) and all they have to do is turn around and continue to lend us back some of the surplus they got from all the goods we bought from them. Obviously they have began to see (if they didn't all along) that we will never be able to repay the principle we owe them.

Why would they be unable to hand out welfare to locals to the same effect? What the heck do they get out of it anyway?

The locals will not pay them hundreds of billion in interest every year. They also are able to destroy their biggest rival just like we did to the Russians: they are bankrupting us.
DATCMOTO
Posts: 6,160
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9/16/2009 6:18:03 AM
Posted: 7 years ago
At 9/15/2009 8:13:31 PM, HghDnsty wrote:
I'm starting this topic to spur discussion around the U.S. dollar being the global U.S. currency and to discuss how the spending trends of U.S. consumers effect global economies (including our own). I'm curious to have both issues addressed. To start off, here is conversation that started the discussion:

********
I'll answer but I don't want this considered part of the debate, as it's an altogether different and complex area. If we inflate our currency (print more money) we devalue our spending power and put ourselves in crucial economic turmoil in the global economy. The current global stand is the U.S. dollar and if it becomes hyperinflationary, compared to foreign currency, like the Euro, the foreign powers that be could decide to conduct business in a different currency. This would lead to us Americans having to pay more money for foreign imports. Since Americans consume 80% (and I'm pulling this statistic from memory so could be off) of foreign imports this would devastate the U.S. economy. Manufacturers would have more costs of doing business, which, in turn, would result in more layoffs, creating less jobs, having to shift jobs overseas, and put us into an economic black hole. It's all theoretical of course but the end result wouldn't be good for the U.S.

Luckily, the foreign governments know this as well. They also depend on the U.S. to buy the 80% of goods that they manufacturer. This is why China, for example, needs the U.S. to survive, they suffer when we suffer and they also want our dollar to be strong so that when we buy from them they can use those dollars to support their own economy. A weaker U.S. dollar (global currency) hurts EVERYBODY.

The worldwide economy depends on the U.S. I could go on for many hours on this topic but we'll save it for another day.

Cheerio,
HghDnsty

Up the corridor, turn left, third door on your right: Politics Forum.
Toodle pip!
The Cross.. the Cross.
JBlake
Posts: 4,634
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9/16/2009 7:02:15 AM
Posted: 7 years ago
At 9/16/2009 6:18:03 AM, DATCMOTO wrote:
Up the corridor, turn left, third door on your right: Politics Forum.
Toodle pip!

The society forum is an acceptable place for this topic.
Ragnar_Rahl
Posts: 19,297
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9/16/2009 7:26:02 AM
Posted: 7 years ago
At 9/16/2009 4:38:18 AM, Floid wrote:
China with the Chinese government's money amounts to the Chinese giving the stuff away.

Except that we pay China something like 350 billion a year in interest payments alone for the money they lend us.
We keep getting deeper in debt. If we can't repay any principal, therefore, in the long run our interest costs are less than the money paid to us-- therefore, again, how is it vital? Subtract the total interest paid from the total debt acquired in the long run and it's still a freebie.

So China lends us money, which we use to buy Chinese goods (which bolsters their economy)
Buying things with currency that gets progressively worth less as it's bought in rough proportion to the amount of things bought does not bolster an economy, it bolsters the illusion of one temporarily.

Why would they be unable to hand out welfare to locals to the same effect? What the heck do they get out of it anyway?

The locals will not pay them hundreds of billion in interest every year.
So reduce the welfare amount to account for the interest, since the interest is not a sound investment :)

They also are able to destroy their biggest rival just like we did to the Russians: they are bankrupting us.
That much fits with my point. You can't claim the US being destroyed is harmful to you and then claim it is beneficial to you.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
brian_eggleston
Posts: 3,347
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9/16/2009 8:24:24 AM
Posted: 7 years ago
China aside, it's a double-edged sword, as with every currency.

If the dollar is strong, it is cheaper to import raw materials, oil, food, etc. which is good for US manufacturers. Also, travelling abroad becomes cheaper for Americans.

However, it also makes the cost of products manufactured abroad cheaper, which is bad for US manufacturers. Plus, products produced in the US for export suffer because they become relatively more expensive. Also, incoming tourism suffers because visitors from abroad get fewer dollars for the Euros, Yen, Pounds, Pesos or whatever.

It's a difficult balance to strike.
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HghDnsty
Posts: 10
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9/16/2009 9:27:24 AM
Posted: 7 years ago
This is a social topic, not politics. We're talking about global trends and the impacts it can have on our society and other societies.
HghDnsty
Posts: 10
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9/16/2009 9:28:08 AM
Posted: 7 years ago
At 9/16/2009 6:18:03 AM, DATCMOTO wrote:
At 9/15/2009 8:13:31 PM, HghDnsty wrote:
I'm starting this topic to spur discussion around the U.S. dollar being the global U.S. currency and to discuss how the spending trends of U.S. consumers effect global economies (including our own). I'm curious to have both issues addressed. To start off, here is conversation that started the discussion:

********
I'll answer but I don't want this considered part of the debate, as it's an altogether different and complex area. If we inflate our currency (print more money) we devalue our spending power and put ourselves in crucial economic turmoil in the global economy. The current global stand is the U.S. dollar and if it becomes hyperinflationary, compared to foreign currency, like the Euro, the foreign powers that be could decide to conduct business in a different currency. This would lead to us Americans having to pay more money for foreign imports. Since Americans consume 80% (and I'm pulling this statistic from memory so could be off) of foreign imports this would devastate the U.S. economy. Manufacturers would have more costs of doing business, which, in turn, would result in more layoffs, creating less jobs, having to shift jobs overseas, and put us into an economic black hole. It's all theoretical of course but the end result wouldn't be good for the U.S.

Luckily, the foreign governments know this as well. They also depend on the U.S. to buy the 80% of goods that they manufacturer. This is why China, for example, needs the U.S. to survive, they suffer when we suffer and they also want our dollar to be strong so that when we buy from them they can use those dollars to support their own economy. A weaker U.S. dollar (global currency) hurts EVERYBODY.

The worldwide economy depends on the U.S. I could go on for many hours on this topic but we'll save it for another day.

Cheerio,
HghDnsty

Up the corridor, turn left, third door on your right: Politics Forum.
Toodle pip!

This is a social topic, not politics. We're talking about global trends and the impacts it can have on our society and other societies.
Ragnar_Rahl
Posts: 19,297
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9/16/2009 3:11:29 PM
Posted: 7 years ago
The global trends-- of the use of a currency established by a government that has nothing to back it but a government.

Sounds pretty political to me.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
DATCMOTO
Posts: 6,160
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9/17/2009 6:45:53 AM
Posted: 7 years ago
At 9/16/2009 3:11:29 PM, Ragnar_Rahl wrote:
The global trends-- of the use of a currency established by a government that has nothing to back it but a government.

Sounds pretty political to me.

Thank you Sir.
The Cross.. the Cross.
HghDnsty
Posts: 10
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9/23/2009 9:48:08 PM
Posted: 7 years ago
At 9/17/2009 6:45:53 AM, DATCMOTO wrote:
At 9/16/2009 3:11:29 PM, Ragnar_Rahl wrote:
The global trends-- of the use of a currency established by a government that has nothing to back it but a government.

Sounds pretty political to me.

Thank you Sir.

The intelligent conversation here would be to discuss the issue rather than where the topic is posted in the forums. I believe that if you aren't going to provide insightful feedback on the topic at hand you should keep your opinions to yourself. But hey, we are on a debate forum so knock yourself out wasting time on trivial matters.
DATCMOTO
Posts: 6,160
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9/25/2009 5:53:13 AM
Posted: 7 years ago
At 9/23/2009 9:48:08 PM, HghDnsty wrote:
At 9/17/2009 6:45:53 AM, DATCMOTO wrote:
At 9/16/2009 3:11:29 PM, Ragnar_Rahl wrote:
The global trends-- of the use of a currency established by a government that has nothing to back it but a government.

Sounds pretty political to me.

Thank you Sir.

The intelligent conversation here would be to discuss the issue rather than where the topic is posted in the forums. I believe that if you aren't going to provide insightful feedback on the topic at hand you should keep your opinions to yourself. But hey, we are on a debate forum so knock yourself out wasting time on trivial matters.

Up the corridor, turn left, third door on your right: Politics Forum.
The Cross.. the Cross.