5 ms·

As Peter Schiff has noted, if US dollar tumbles, holders of the dollar will be hurt, but the US itself will be wiped out. The situation is analogous to a stock

by dpatru 17y ago

As Peter Schiff has noted, if US dollar tumbles, holders of the dollar will be hurt, but the US itself will be wiped out. The situation is analogous to a stock market bubble. Holders of stocks with inflated values are hurt when the stocks lose their value, but the over-valued companies themselves go bankrupt. Furthermore, China would be better off if it consumed more of what it produces rather than sell it to Americans for American dollars and government bonds.

geoffc 17y ago
When stocks tumble the companies usually keep operating along, the shareholders take the big haircut.
- ericd 17y ago
  Except when the company is cashflow negative and needs to continue issuing debt to operate. Once confidence in them is shot, and they can't find money to borrow, they file for bankruptcy. See the parallel?
rortian 17y ago
I wish you had just replaced Peter Schiff with, "Ron Paul's economic advisor" to save me some time. What you assert is simply untrue. It would be a good thing, currently, for the dollar to be devalued somewhat. Our exports would be cheaper to others and thus more attractive. Please cite credible people when you attempt to make extraordinary claims like 'the US itself will be wiped out'.
- dpatru 17y ago
  Look up "peter schiff was right" and "peter schiff mortgage bankers speech" on youtube. At the time when "credible" people were predicting no recession and prosperity in perpetuity, Schiff was a contrarian voice predicting recession and a fall in housing prices. For example: see http://video.google.com/videoplay?docid=7879752717244782545# http://video.google.com/videoplay?docid=7879752717244782545# which shows side-by-side prognoses from Schiff and bullish pundits on CNBC and Fox News before the recession. You can't get to prosperity by devaluing your currency because prosperity depends on savings and investment and a falling currency encourages the opposite.
  - rortian 17y ago
    Alright, here's a problem for you, no one will assert that bullish pundits on CNBC are credible. http://www.cepr.net/index.php/dean-baker/ http://www.cepr.net/index.php/dean-baker/ Dean Baker is an actual economist and he called the housing bubble. I find your last sentence bizarre as it asserts as a truism something that is not really true at all. You believe people who are on the on the fringe of economics and seem to enjoy it so more power to you.
    - kiba 17y ago
      Your comment reeks of appeal to authority. You should at least demonstrate why "bullish" pundits are wrong. It doesn't matter if an economist is on the fringe of economics, especially a field that is notorious for not being able to predict much of anything. It matters if they are right, or wrong, how much, or it is just plain storytelling(and wrong!) in addition to lucky predictions.
      - rortian 17y ago
        It does and I'm not above making that move with certain positions. If you don't have a problem with bullish pundits then I wonder where you were in the late 90s. Regardless, predicting the future is a bit of a silly exercise and not many people come away from in being right. Appeal to authority is the way to stay sane against crazy ideological camps: Ron Paulites, 911 truthers, creationists, etc. I am not going to take the time to rebut all the nonsense they manufacture. It is important to point out where these people are coming from.
        kiba 17y ago
        Appeal to authority is the way to stay sane against crazy ideological camps: Ron Paulites, 911 truthers, creationists, etc As if libertarians are some crazy right-wing nutcases who wants drugs, believe in every single conspiracy theory about the government, and as well think free markets can perform miracles. Yes, there are probably tons of crazy and wrong ideas out there, ranging from anarcho-commiunism, labor theory of values, and the paradox of thrift. But, there are also ideas out that are right or just worth exploring. Black Swan theory, the problem of economic calculation, the broken window fallacy, etc, are examples. This is not physics or biology where everyone agree with each other and they'll be right 99.99% of the time(except the cutting edge of their field). We're discussing economics here, where politics intervenes, the subject matters difficult to study, and whole mathematical models can be invalidated because humans are positive feedback loops. You can't make shorthand judgement in that field.(With the exception of free trades. Every economists say it is a good thing and they'll be right) And where I was in the 90s? I was in elementary school.

by dpatru 17y ago

geoffc 17y ago

When stocks tumble the companies usually keep operating along, the shareholders take the big haircut.

ericd 17y ago
Except when the company is cashflow negative and needs to continue issuing debt to operate. Once confidence in them is shot, and they can't find money to borrow, they file for bankruptcy. See the parallel?

rortian 17y ago

I wish you had just replaced Peter Schiff with, "Ron Paul's economic advisor" to save me some time. What you assert is simply untrue. It would be a good thing, currently, for the dollar to be devalued somewhat. Our exports would be cheaper to others and thus more attractive. Please cite credible people when you attempt to make extraordinary claims like 'the US itself will be wiped out'.

dpatru 17y ago
Look up "peter schiff was right" and "peter schiff mortgage bankers speech" on youtube. At the time when "credible" people were predicting no recession and prosperity in perpetuity, Schiff was a contrarian voice predicting recession and a fall in housing prices. For example: see http://video.google.com/videoplay?docid=7879752717244782545# http://video.google.com/videoplay?docid=7879752717244782545# which shows side-by-side prognoses from Schiff and bullish pundits on CNBC and Fox News before the recession. You can't get to prosperity by devaluing your currency because prosperity depends on savings and investment and a falling currency encourages the opposite.
- rortian 17y ago
  Alright, here's a problem for you, no one will assert that bullish pundits on CNBC are credible. http://www.cepr.net/index.php/dean-baker/ http://www.cepr.net/index.php/dean-baker/ Dean Baker is an actual economist and he called the housing bubble. I find your last sentence bizarre as it asserts as a truism something that is not really true at all. You believe people who are on the on the fringe of economics and seem to enjoy it so more power to you.
  - kiba 17y ago
    Your comment reeks of appeal to authority. You should at least demonstrate why "bullish" pundits are wrong. It doesn't matter if an economist is on the fringe of economics, especially a field that is notorious for not being able to predict much of anything. It matters if they are right, or wrong, how much, or it is just plain storytelling(and wrong!) in addition to lucky predictions.
    - rortian 17y ago
      It does and I'm not above making that move with certain positions. If you don't have a problem with bullish pundits then I wonder where you were in the late 90s. Regardless, predicting the future is a bit of a silly exercise and not many people come away from in being right. Appeal to authority is the way to stay sane against crazy ideological camps: Ron Paulites, 911 truthers, creationists, etc. I am not going to take the time to rebut all the nonsense they manufacture. It is important to point out where these people are coming from.
      - kiba 17y ago
        Appeal to authority is the way to stay sane against crazy ideological camps: Ron Paulites, 911 truthers, creationists, etc As if libertarians are some crazy right-wing nutcases who wants drugs, believe in every single conspiracy theory about the government, and as well think free markets can perform miracles. Yes, there are probably tons of crazy and wrong ideas out there, ranging from anarcho-commiunism, labor theory of values, and the paradox of thrift. But, there are also ideas out that are right or just worth exploring. Black Swan theory, the problem of economic calculation, the broken window fallacy, etc, are examples. This is not physics or biology where everyone agree with each other and they'll be right 99.99% of the time(except the cutting edge of their field). We're discussing economics here, where politics intervenes, the subject matters difficult to study, and whole mathematical models can be invalidated because humans are positive feedback loops. You can't make shorthand judgement in that field.(With the exception of free trades. Every economists say it is a good thing and they'll be right) And where I was in the 90s? I was in elementary school.