Kuwait kicks sand on the dollar

[froshie1]

http://articles.moneycentral.msn.com...bak.aspx?msn=1

[wildthing]

I wouldn't be surprised on that... US economy is really getting bad.

I hope they don't borrow money from WB-IMF too.

[mazdamazda]

Not a big deal really, they just stopped to pegged it on a fixed exchange rate but that doesn't mean that they'll stopped using dollars for foreign transactions.

Pegging your currency on a fixed rate is quite complicated and takes a lot of reserve dollars and internal funds to weather changes in the dollar value (see China). As a small country which is dependent on exporting oil, they might just want to ride on the euro's appreciation in the meantime.

The economy of the US has nothing to do with this. They are still the biggest producer of the world.

Borrow money from WB/IMF? Sorry... what's the connection?

[wildthing]

flame-baiting?!?

[BlueBimmer]

hey bumawi na dollar sa peso ah, 46+ na uli ehehe

[mazdamazda]

flame-baiting?!?

Huh? What flame baiting?

[empy]

I wouldn't be surprised on that... US economy is really getting bad.

I hope they don't borrow money from WB-IMF too.

while it's true that the USD is weakening substantially against many currencies (including the PhP), i'm not sure where you're getting the "US economy is getting really bad" statement.

the Dow, Nasdaq and S&P500 are at or close to all time highs this year, unemployment is holding steady, interest rates and inflation are also steady, and commercial, industrial and personal consumption are up...sure, it's not as great as during the Clinton years, but it's certainly not terrible.

balance of payments is pretty bad, and consumer debt keeps rising - which is my personal theory as to why the dollar is weakening - and the real estate market shows no signs of rebounding. so there are some warning signs. but most people who are investing in US markets right now are enjoying the benefits (thank you Apple )

you might want to do a little research before posting next time.

[VtEC]

Just to justify that US economy has nothing to do with the current situation and that its economy is doing fine.
Please read the article from forbes magazine;
http://www.forbes.com/markets/econom...markets25.html

[wildthing]

sorry mods that my reply is might be OT and have very little thing to do with Kuwait...

M54 Powered,

I am sorry I didn't consider that "paper trading" in the Dow, Nasdaq and S&P500 are already economic progress indicators - considering they change drastically (sometimes) on a day to day basis.

To shed/explain my views may I suggest that you view/read this then:

New Analysis of Genuine Progress Indicator Shows that U.S. Economic Progress Has Been Stagnant Since the Late 1970s

In stark contrast with President Bush’s rosy economic reports, the U.S. economy has actually stagnated since the late 1970s as income inequality, environmental degradation, and our flailing international position take their toll on real economic progress. This is one of the key findings the 2006 Genuine Progress Indicator (GPI) update.The GPI is an alternative economic accounting system that takes into account the benefits associated with volunteering, higher education, housework, and public infrastructure as well as the costs associated with lost forests, farmland, and wetlands, pollution, disappearing family time, and capital exported abroad......

Genuine Progress Indicator

this is the link - http://www.rprogress.org/ - for your further enlightenment

If you also have time, you can go to this site sa wiki (http://en.wikipedia.org/wiki/Economy..._United_States) and you'll read this further:

Since the stagflation of the 1970's, the U.S. economy has been characterized by somewhat slower growth. In 1985, the U.S. began its growing trade deficit with China. In recent years, the primary economic concerns have centered around: high national debt ($9 trillion), high corporate debt ($9 trillion), high mortgage debt ($9 trillion), high UNFUNDED Medicare liability ($30 trillion), high UNFUNDED Social Security liability ($12 trillion), high external debt (amount owed to foreign lenders), high trade deficits, and a rise in illegal immigration.

....As of 2006, the national debt was nearly USD $9 trillion or 64% of GDP....

... if their $9trillion national debt is 64% of their GDP e papaano pa yung corporate debt ng american companies na another $9 trillion, mortgage debt also $9 trillion.. oh and not to forget the $30 trillion MEDICARE and $12 trillion SS liability. - BRAVO!!!

Isn't that a great achievement...so ang nararamdaman pala nilang kaginhawaan ay dahil lang pala sa utang.

To add more salt on their wounds (also from wiki):

In 2006, the U.S economy had its lowest saving rate since the 1930's. These serious issues have raised concerns among economists and UNFUNDED LIABILITIES mentioned as a serious problem facing the United States in the President's 2006 State of the Union address.

Baka mga pinoy lang ang nagsasave dito...(speculation your honor)

(This is purely my opinion - so don't get offended) -
I am very sorry to be pessimistic on this, but if the US don't do anything about their REAL ECONOMY, you (as migrant pinoy in US soils) might wake-up one day with your savings na wala ng halaga...

...kasi if Kuwait can do it to US, it won't be surprising that other countries will follow suit (someday).

just my 2 cents. :peace:

[empy]

well, i agree with some of the points made by the wiki article. i did say in my original post that i was concerned with rising consumer debt. and there are very few informed americans that don't think medicare and social security are in crisis (one would be stupid not to realize this)

so once again, there is definitely cause for concern.

but since we're talking about the REAL economy - the US produces more goods and services than ever before. look at the Dow - American companies that produce real goods, equipment and services are reporting higher and higher earnings. that is very different from the "paper trading" you are referring to, which is people speculating on tech or biotech companies that don't even make any money. the reason these indices are going up is because US companies are earning more and are therefore more valuable in real terms.

on average and adjusted for inflation, the US market has shown double digit growth every year for the past six decades. yes, it has its ups and downs, but i'll take that track record any day

what else is real? on friday record job growth was reported, beating estimates. that's real. unemployment continues to stay rock solid at under 5%. that's real too. per capita income is also among the highest (if not the highest) among all nations.

two more things -
1. a national public debt of 64% of GDP is actually a better ratio than it was during the previous generation. i agree that it feels too high, but it's not the death sentence you are making it out to be.

2. the rprogress.org concept of GPI is an interesting concept, but not relevant to forex trends or US economic health. all it's saying is that economic growth (and income inequality) comes at an environmental and social cost. that is true of course, but it affects most countries equally, especially developing ones.


back to Kuwait, i actually think it's a smart move for them to stop pegging the dinar to the dollar or to any foreign currency. i think history has proven that pegging is a wasteful and detrimental practice that hasn't really proven to yield consistent economic stability anyway.