Dollar to Philippine Peso — Weak Dollar or Strong Peso?
The dollar to Philippine peso exchange rate is quite low right now. A lot of people have asked me “What is up with the dollar?” Or “Why is the peso so strong?”
I don’t think it is as much of the matter of a strong peso as it is a weak
dollar. Though there is speculation that Bangko Sentral ng Philipinas will raise rates, so far they have not. This speculation caused
the value of the peso to rise a bit. That was back in February.
Inflation is up in the Philippines but still reasonable. A rising inflation rate in the Philippines will decrease its value and improve the dollar to Philippine peso rate. However, cost in the Philippines will rise and could negate or reverse any gains in the rate of exchange.
Is the Dollar to Philippine Peso Rate Low Because The Peso is Strong?
The reason the peso is strong is because the dollar is weak. I only word it that way because people are asking the question that way.
To know if the peso is strong, you need to compare it to other forms of legal tender. That is, the currency of other countries and to that of gold and silver. If the value of the peso is going up across a wide spectrum of other commodities then the peso would be considered strong.
The Dollar is Weak and That is why the Dollar to Philippine Peso Exchange Rate is so Low
The value of the dollar is falling. The reason for that is not hard to find. The supply of money in the USA is up. It is way up.
The reason for the strong peso is up is because the Federal Reserve Bank (Fed) is creating money. They are doing this in hopes to stimulate the economy. The side effect is a weaker dollar.
Other nations are putting pressure on Washington because they believe the Fed is weakening the dollar to increase exports and slow imports. This policy does have that effect.
It is a drastic measure and it seems to have had a positive effect for those living in the USA. Those of living in the Philippines are seeing a huge drop in our spending power.
Many want to see this policy stop now. I want to see the policy stop but I don’t claim to be objective. I’m loosing thousands of dollars a year now with the rate at this level.
There is discord within the Fed too. Some believe it is time to stop now. Others seem to have a plan and are going to stick with it regardless of what happens. That’s the way it seems to me but the those members of the Fed may have been well aware of this when they started. I don’t presume to know as much about these matters as they do.
Still, the people are saying prices are up. That is inflation has kicked in but the official numbers don’t reflect that yet. I will bet a dollar the next setup of numbers on inflation will reflect that.
The policy of creating money has an end point and we are getting close to it. It will stop. The dollar will rise despite some of the ridiculous things I’ve seen on the web. Some guy is making millions of dollars prophesying the end of the America is near.
The Fed has independence from politicians, once the members are picked they don’t answer to congress or the president. Of course, both can put immense pressure on the Fed and sometimes do.
I’ll be surprised if there is not congressional hearing in the USA on this soon. It gives politicians a chance to showboat. It does put some pressure on the Fed. I think though it is more psychological pressure by having the public hate them.
When the Fed stops creating money, the value of the dollar will rise again. Unless, something else comes along to hurt the value of the dollar more and send it plummeting even further. That is always possible!
I’ve provided a chart below showing important rates, including the dollar to Philippine peso rate. I have created a new page with even more data on it. You can see that by visiting the dollar to Philippine peso rate as of 4-08-2011. I will follow that up with like data ever so often so we will have a better idea of what is strong and what is weak.
| 08 April 2011 | |
| US$ 1.00 | PhP 43.112 |
| Libyan Dinar 1.00 | PhP 33.0355 |
| Repo Rate | 6.25% |
| Reverse Repo Rate | 4.25% |
| Inflation Rate (Mar ’11) | 4.3% |
| 91-day T-bill Rate | 1.125% |
| Gold Buying/ troy oz. | US$1457.55 |
| Silver Buying | US$39.55 |
I think it will be the end of 2012 before be we see the dollar to Philippine peso rate back around P48 to $1. I’d like to be wrong though.
As one commenter said not long ago, there isn’t much we can do about the dollar to Philippine peso rate of exchange.
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“I think it will be the end of 2012 before be we see the dollar to Philippine peso rate back around P48 to $1.”
…………………………………………..
While I expect the dollar will continue to fall from present levels.
Heck, the US owes the Philippines $22.8 billion !!
China and Russia are openly moving to eliminate the dollar as the world’s reserve currency. (Things like oil are priced all over the world in dollars.) When that happens the dollar will decline from whatever level at that time by about 25%.
There is no will in Washington for anything but re-election. Certainly no will to address massive fiscal problems such as social security and medicare-medicaid.
IMHO the dollar will continue to decline.
Tom
We will see but I’m certain that it will not continue to decline.
It just doesn’t fit in with the way exchange rates work. I suggest you read this: http://economics.about.com/cs/money/a/purchasingpower.htm
Thanks for the link.
As to my central point, unfortunately I remain convinced the dollar will continue to decline. The declining dollar will buy fewer PHP.
How-sum-ever, I do NOT wish to get into a duel with the boardmeister.
Tom
Rusty, the thing to watch will be the Fed’s speech this Friday. There is a lot of scuttle butt about what’s been called “operation Twist.” Actually, Kennedy employed it in 1961 to defend the US dollar exchange rate while we were on the gold standard.
If you’re not familiar with it, basically the Fed buys long term bonds driving the price up and the yield down. This, in effect, sends a low inflation signal and may help reduce mortgage rates. At the same time, however, the Fed sells short term ‘debt’ (actually just short term monetary policy.) This sends short term prices down and yields up brings in capital flows and strengthens the dollar.
This would be good news, as it seems to be one of the few tools the Fed has left, ironically. And as long as the Fed buys and sells in equal amounts, the zero interest rates on inter-bank lending will (or should) remain at zero.
It’s interesting to note that QE2 was, in effect, the first half of an operation twist. They bought mid term notes forcing investors to buy short. The second half would be to sell short term bills and cause the yield curve short end to rise overall flattening the curve. And if the Fed simply sells bonds, instead of buying longer term as it has done already, this could drain excess some (not all) excess reserves from the system which is a good thing. It’s very dollar friendly.
Friday’s announcement will be closely watched. Now, some say the markets have already priced in some longer term buying. But, the market doesn’t seem to have priced in a dollar rally just yet. So, who knows.
Cheers
I don’t think we need to make moves to stimulate the stock market. Profits are not the problem. I don’t think capital is either?
Inflation in the USA is so low, I probably wont get a COLA for the third year in a row.
Mortgage rates are at a 50 year low.
I noticed though that the Bank of American has laid off thousands with more to come because of the hit they took in the stock market. You know, that makes no sense to me. I don’t know what their income statement looks like but that should be more of a basis for hiring and firing. Actually what should be the basis is if those people can help a business make money.
The only benefit I see in this would be maybe to bring oil and other foreign commodity prices down. Which I would think could help growth.
If it is true that banks wont lend, then that is the problem and anything else that is done will just be a bandaid.
Now, if yields go down, gold prices fall, will the banks loan?
A business will borrow money when its return is expected to be greater than its cost of money or ROI. If business can’t borrow because banks wont lend then there will be no growth.
I don’t like a lot of regulation but banks are and should be heavily regulated since they are insured by the government. I’m at the pint where I think banks should be required to have a certain amount of their profits based on lending. Do we do that? I suppose we do it some through reserve requirements but that really doesn’t do it as they an invest in other assets still.
Until banks lend, we wont get out of this mess. The government can key on the stock market forever that isn’t going to fix this. Profits soared during the recession.
The dollar will be fine once the economy is healthy. FOREX traders seem to be more interest in their charts and they are as a result a fickle bunch of folks.
I’m all for a strong dollar personally but I don’t look at things as to just how they affect me. If the dollar does well, I’ll reap the benefits of that. But I’d rather the dollar just stay where it is for a while and fix the fundamentals. The dollar will react to that.
The Fed should and I think will take to appropriate action. If this action encourages bank to lend, then I’m all for it. I have my doubts.
Well, you cover a lot of ground.
Yea, the stock market fear and panic really doesn’t make sense. Banks and businesses are on fairly solid footing and many are paying dividend like never before. I believe they are in good shape. The consumer, however, still needs work getting personal debt under control.
Yes, mortgage rates are very low. But an attempt to get folks back into homes might require them to fall even lower. I do not know how, though, when unemployment is so high as is personal debt. Maybe it’s an equity play. But, if home prices begin to rise, well, what happens if inter-bank lending rises. Banks hemorrhage money as their revenue is, say 4%, and their expenses climb to 5%. That’s a repeat of the S&L crisis.
I agree with you on a stronger dollar policy and argue such. It will tend to bring global prices down and maybe even nip the dollar carry trade (which weakens the dollar.) The Fed may decide to do so, despite trying to stoke inflation…and giving us stagflation.
Yep, banks failing to lend makes monetary policy a band-aid approach. As Japan figured out, fiscal stimulus was the key. It provided some demand in the economy and some wages. It helped the consumer net save and pay down debt.
Not sure about gold, it seems to be a safe haven play as are treasuries, the yen, and the Swiss frank. Interesting question, though. Lots of heated discussions from gold bugs on that very topic.
Banks are not reserve constrained and can lend at will, provided they have a credit worthy borrower. That’s the problem, few exist save for other stable banks and companies. But, with excess reserves, there is really little need for inter bank lending and companies are sitting on cash. The consumer is out of the picture. The problem with assets, as I understand it, is no one really knows the real market value of them. The rest is sort of fuzzy for me.
Yes, that is what Japan found out. We cannot stand on our feet until the banking system gets down to business of lending, again. Until then, it seems fiscal stimulus is one solution. Stagflation, or worse, is the other.
We should all be for a strong dollar, that’s our purchasing power…even for folks in the US who could care less for the Php exchange rate. We consume, we’re wealthy that way. And a strong dollar is good for global prices, as you said. It is just a good policy all around, you’re correct. And we’d hope the Fed will take that into account.
If the Fed does nothing, that should be dollar friendly…no more liquidity scaring everyone into hyper inflation scenarios. That will be good enough for me, just don’t make things worse.
Whew…
Balance in the dollar is key, not strength. Bush pushed it up too high and that too hurt.
I don’t understand, maybe you mean they have plenty of reserves. Yes, because the Fed is trying to get them to lend.
DIVIDENDS there is the problem. Dividends generally go to the wealthy how tend to invest in more money making paper. Fewer dividends and higher growth would be helpful.
I don’t think lowering the mortgage rates will put people in homes. If I was a lender, I’d rather put the money in Tbills until the rates go back up.
I don’t think old methods are going to fix this. Time probably wll or doing nothing. But in the least incentives and better yet a requirement to lend for banks will cause the economy to grow. Until banks lend, nothing is going to change.
I’d rather do nothing than just throwing darts while blind folded and hoping something hits the mark.
This will NEVER happen but a nice flat rate tax on unearned income would be a wonderful way to stimulate growth. I’d like to see it a temporary thing or automatically adjusted based on growth and inflation.
I can hear Fox News now, SOCIALISM, distribution of wealth. And that moron that went berserk with the Obama Hoax Hoax would be even worse.
A strong dollar feels good, it brings pride in the USA, it even sounds good. Most that want that haven’t looked into the economics. That doesn’t hold true for you. What we have now is a weak dollar and that too has proved harmful.
If rumors are out there regarding what you spoke of , it could be that The Fed is vetting the idea before they announce it. Sounds like I’ll benefit at least. I don’t know if they are vetting or if is journalist trying to find something new to write about.
I’m sure Obama is glad the Fed’s are pumping out money, if the economy doesn’t improve, he’s gone.
But he has no control over it. inflation might be the next monster to take him out.
I’m not smart enough to see how rampant inflation can be avoided.
The Fed has thrown dollars most every where. During the so-called financial ‘crisis’ of 2008, FIVE of the six largest recipents of Fed money were FOREIGN banks.
(Certainly the Fed did not tell us the above fact willingly but fought against the information release all the way to the Supreme Court. We have Bloomberg and Fox News to thank as they were the entities who fought for the release.)
Tom
Why do you think it is going to fall against the peso?
It certainly could continue to fall against a specific currency if that currency increases in value. No doubt about that.
Fall against the world? No, I don’t believe that.
I will simply say I am hopeful you are correct.
Tom
By the way, I must be on another “Tom’s” account as I only have a very few posts.
You know, I had forgotten about our propping up other banks. I wrote about that at the time.
It become fuzzy now, like everything else in my memory but having the Royal Bank of Scotland (probably of them) fail wouldn’t be good for the US economy in recession.
I don’t recall how the Fed threw money out them. If they created money to do it, that lowered the value of the dollar. I’m having a hard sorting through how this would effect the value of the dollar.
The could have loaned those banks money in their currency.
They could have bought that currency exchanging it for USD which would take their cash out of supply and raise theirs. The key though is how we funded it. If we sold bond in the USA to do it, that would reduce cash in the USA and increase the value of the money.
It is 3am, it is too late for me to be trying to figure this out right now. LOL
In any case, we likely bought their currency when it was low meaning we will pay it back when the dollar is lower and that would give us a loss.
Like I said, too late in the “day” I give up for now.
The Fed expanded it’s balance sheet and took on toxic assets in exchange for reserves. This is QE. The Fed created no new money that was not already in the banking system.
Bank reserves are the primary driver for the money supply. They are needed to cover lending. So, as long as lending remains low, the money supply barely changes despite excessive reserves. In fact, some money has disappeared as bank loans went into default.
The Fed engaged in currency swaps with foreign banks to shore up dollar liquidity. It’s the availability of dollars that drives the dollar lower, but only if those dollars are put into circulation outside the banking sector, such as commodity speculation. Transaction demand appears low, too, further weakening the dollar. Capital flows into the euro on risk appetite strengthen the euro and drive down the USD index.
On the bright side, deflationary forces are strong and this tends to make the dollar more scarce. Unfortunately, not as scarce as the British pound is becoming due to their austerity.
In effect, the dollar is falling on it’s sword for all, and it will decline a bit more. Fortunately, the forces driving the dollar down are somewhat weak as it is still a safe haven currency. The Fed can take steps to defend the dollar, and it might. Maybe it should to defend global prices.
In any case, the dollar’s woes are a result of monetary policy and not a deliberate attempt to debase the dollar to transform the US in to a net import nation. That just won’t happen intentionally. Inflation is well under control, for now, and can be battled effectively through unwinding QE and other Fed monetary tools. Hyper inflation is not a threat as long as the US has spare capacity to produce. We do.
The Fed did create more money with QE. Buy buying its own bonds it gave cash in exchange for that. No, they didn’t print money but they put more money in circulation by doing that..Most transactions are electronic. I think you know that. I’m having trouble understanding why you would say QE doesn’t increase the amount of money in circulation. That is what you said, right? Or were you just saying there wasn’t more physical currency.
Past of the USA are experiencing high inflation. And a huge part of that is for overseas purchases such as oil. That means we ship more dollars out and hurt growth. When there is less growth, retailers can’t raise prices but their cost can go up. The biggest issue is the trade deficit largely caused by higher prices overseas. Again, playing having on internal spending. People can buy fewer Fords when they are spending most of their money on products that end up in foreign countries. Great for them, terrible for us.
Rusty, the Fed did create more base money, high powered money or reserves, on it’s expanded balance sheet. Not currency in circulation. It did give banks access to those reserves buy buying bonds, this was QE2 (an asset swap.) However, bank reserves (high powered money) are not loaned outside the banking sector. They are traded between banks to cover reserve requirements when banks create money from thin air when lending.
Banks do not lend “printed money,” they create money ex nihilo and lend that, then cover it with reserve deposits at the Fed. This is why reserves, along with currency in circulation, are called high powered money because they can be used to “cover” new money creation.
http://pragcap.com/mechanics-qe-transaction
In fact, the Fed is incapable of creating anything new, it can simply lend, swap, or do any other function of a bank. Only the treasury can create new money through deficit spending, spending more than it taxes leaves us a bit better off. This is why austerity is so bad, it drains ‘net’ financial wealth.
http://pragcap.com/read-fed-print-money
Sure, QE can be inflationary. Excess reserves allow money creation, but only if lenders and borrowers sign loan contracts does new money enter the supply. And there are certainly a lot of reserves in place to allow for an explosion in the money supply…bank money. As far as I know, only a trickle of loan potential are being made to businesses or to speculators. I argue speculation is driving up prices, and of course putting dollars into circulation globally.
Hi Norm, yes I agree. I’ve covered the velocity of money in some detail in other post.
I remember the first signal that trouble was coming when the Fed reduced the reserve requirements by a factor of four over night. I think that was back in mid 2008. A few months later the banking crises emerged from which the recession started.
With the cost rising in some areas, I wonder if much of the rest of the economy is not actually in a deflationary status. That is probably a bit over my head though. I would suppose it would depend on the details in how growth is measured.
I hope for the sake of the people in the USA the job numbers continue to improve, even a little improvement at this point is a relief.
Me, too, Rusty. Are you familiar with a balance sheet recession? I wasn’t until recently. But it seems to be telling us where deflation occurred.
Recent articles seem to suggest banks and business are shored up, but the consumer may be lagging a bit.
But, to answer what will happen to the dollar peso rate, one must understand what’s happening int he Philippines, too. The best I can gather, the Philippines is doing okay, in fact the central bank raised it’s reserve ratio a bit lately to fight inflation. I think this will strengthen the peso.
The rate is also related to the yuan exchange rate. There is a strong correlation between the yuan exchange rate and the peso rate going all the way back to 2005. I don’t have any links handy, but maybe any exchange rate site can show this.
So, on one hand it seems the peso might strengthen against the dollar as the yuan does. There seems to be some incentive for exports to fill the falling demand from China. That would support the peso, but import demand in the US is falling off. So, the bottom line its anyone’s guess as to what will happen. It would be nice to foresee the future, eh?
The dollar weakens a bit, US imports should fall off…both seem to be acting on the peso rate. But, to what end? Couldn’t tell ya…wish we could do a technical analysis.
Thanks for the chat. Ran across it looking for answers to this very question. Hey, if you like, here’s an interesting take on our banking system that is opening a bunch of eyeballs, mine included. It’s a fascinating read and speaks to taxes, bonds, the EU, QE…all the stuff we experience today.
http://pragcap.com/resources/understanding-modern-monetary-system
Cheers, Rusty, et al.
I never heard it called that but I’m under the impression that banks wont loan. They are busy making safer money on t-bills and probably gold,oil and precious other metals. Though I wouldn’t call oil and metals safe.
I agree, the moves by the Bangko Sentral ng Pilipinas will strengthen the peso but inflation will weaken it. I’m afraid the affects and fears of inflation have already given the dollar a boost though and in the long run will weaken the dollar. I remember hoping the dollar would be doing better after QE2 was over. I suppose it has mostly stabilized for now.
Your not on his account but there is another Tom, the count must be based on the name which is kind of screwed up.
It should be on email.
If they don’t stop printing money soon enough, it will cause serious inflation. I think they need to stop now. It almost seems that Obama has control over them because he’s got to get people back to work if he has any chance of getting re=elected.
I don’t deny that politics could be involved. Perhaps the Fed chairman is a fan of Obama.
Inflation has been under 2% for the last two years in a row. So the Fed thinks they have room to play with and they are right. We were facing deflation! But I think the tide is changing.
I also think that some prices have been superficially low over the last 3 years because people were not spending. Some of the price increases may be catching up. People would not buy before. I wrote another article about that not long ago.
But no, it was well known that the Fed was propping up foreign banks back during the time it was happening.
“I don’t recall how the Fed threw money out them. If they created money to do it, that lowered the value of the dollar.”
Yup, money was created out of thin air. As most of the money was created digitally there was not even the cost of paper and printing.
“Foreign banks received hundreds of billions of dollars in short-term loans from the Fed. Among the biggest loans from a Fed commercial-paper lending program was one to Swiss banking giant UBS, which tapped it for $37 billion in October 2008. Barclays, the British bank that declined to rescue Lehman Brothers but later bought much of it from bankruptcy, tapped the Fed for roughly $10 billion in commercial-paper loans in October 2008.
British newspapers reported Thursday that Barclays topped the list of Fed borrowers when taking into account a combined $232 billion that the bank borrowed from several Fed financing programs.”
Read more: http://www.foxbusiness.com/markets/2010/12/02/foreign-banks-biggest-recipients-fed-loans/#ixzz1J9TUVR24
Tom
Yes, a balanced dollar is key and the reason we went to a floating exchange rate and are pushing China to revalue the yuan.
Yes, banks have plenty of reserves, which is lending capacity, for that very purpose.
Nor do I believe lower mortgages will put folks in homes. It might even spur a bit of speculation and malinvestment.
Yes, the old methods of lowering interest rates will not work today. Fiscal stimulus might, but little chance of that. So, it may be deflationary forces begin to regain control. That will strengthen the dollar, too. Painful, though. Doing nothing is a good option. We’ll see on Friday.
I hate the political bashing news, even when it get’s heated in the blogs..it just turns into ugly finger pointing.
The Fed recently mentioned it would keep rates at zero until mid 2013. So, any policy it spells out will have to be consistent. I just hope it stalls the dollar’s decline, for a change. Of course, maybe we all wish for p50 again, but that’s probably a long way off and would require the Phils govt to do something drastically wrong. Probably not gonna happen. Or a severe bout with deflation may give a rise at some point.
I dunno, these are surely interesting time. Whatever happens, I hope the Fed does not undermine confidence in the dollar. I am sure they won’t.
Cheers, need a break.
Talking politics is a double edge sword. Most expats don’t like my politics. They tend to think I’m a liberal and think they are conservative. I think I’m as conservative as they come, well a reasonable on that is. I recognize the governments proper role. I don’t think republicans do so I make a lot of people mad.
It is good for getting people engaged but it also causes comments to take a tone I don’t care for.
A stimulus package would be wonderful. I think the first one was too small, I thought at the time. It would be wonderful if the USA was in a position to do it. We are at near record deficits. The only stimulus package I would support is one that raises revenues even if the economy does not expand. I realize that a stimulus package should pay for itself but that only is true if the economy expands enough to offset the cost. I think the prior one kept us out a depression but I doubt it has paid for itself.
Forget we can’t get it to pass at the moment. With the mood of the world, I think it would do too much harm for it to be beneficial. The time is not right.
We need to stimulate the banks to loan. I wish I was a cartoonist, as I’d like to see a drawing of uncle Sam holding a gun to a bankers head and saying something, “Tell me you want loan again.” lol I’m thinking of a Beavus and Butthead skit a radio station in the USA use to play. They changed it to “Say WHAT again, I dare you to say WHAT again.” He does and that is followed with BOOM.
Rusty !
so i have made it to the philippines safely late last week – and i must tell you, that where i have stayed on and off during my time here (mostly in Makati) has very well exceeded my expectations. i have seen the country side near tagaytay, and been to boracay all within the past week. even though i have mostly been hanging around Greenbelt Mall, yes it is easy to say that things are very enjoyable, but i have seen the extreme contrast to this outside of Manila – the extreme poverty – something i had spent many weeks in preparation to experience with my own eyes, but even then, it is not what i expected. i have seen things that reminds me how much i have taken my own privileges for granted, and also serves as a reminder of how lucky we are in north america. i have extended my stay because i am just enjoying myself so much and feel this has a deeper meaning in some form for me. to be discovered soon enough i am sure.
anyway – to stay on topic – i have seen the phials peso fairly strong against the CDN dollar during this particular weekend; probavbly the strongest i have seen it in months, roughly between 42 – 44 php. this morning i was quite surprised to check my currency conversion app alerting me that the phils peso is at a strong 44.86. though this is great news for CDN-specific tourists such as myself, one has to wonder about the state of economics in the west. it seems to be taking a very gradual but strong turn in favor for eastern (asian markets), where we are seeing the US dollar in a state of a decline overall, and one may be of concern for consumer trends back at home.
just my 2 cents. i am sleepy and running on this wonderful Nescafe Mocha Cappucino drinks that come in the tall cans. cannot get these at home, and i am consuming 2 – 3 every day!
talk soon!
kris w.
Hi Kristopher!
Yes, when one first gets here they really appreciate things back home. After a while though, one learns they are not really that big of a deal. I’m really looking forward to a return to the States to see how it strikes me now.
When you say the peso is strong, that means it is rising but I think you meant the CDN is rising against the peso which would mean a weak peso or a strong CDN.
The dollar has risen a bit too. It is at 43.xxxx on XE.com.
XE always gives me what I will actually get if there are no banking fees added in. Which for me, there always are now.
Even 44P to 1 USD is pretty low. P45 to one is what I consider the average rate.
I almost looked at the data wrong. I’m so use to seeing the dollar higher than the CDN. But the CDN is higher than the dollar right now. So it makes sense that the CDN is getting a better rate than the dollar to Philippine peso rate.
At this moment the CDN is P45.xxxx to 1CDN.
Which goes points to what I have been saying, the peso is not strong, but the freaking dollar is going to the devil.
The dollar is weak!
Come on FED, it is past time to stop it!
“The Fed has kept discount window borrowers secret for 97 years. Last week’s disclosures were court-mandated after legal victories by Bloomberg LP, the parent of Bloomberg Businessweek, and News Corp.’s (NWS) Fox News Network.”
The FED only released when their case was lost at the US Supreme court.
Again, we should remember to thank Bloomberg and Fox News.
Tom
Tom, it was well known that the Fed propt up European banks during what was a very real banking crises in the USA. i wrote about it back then.
Rusty, well known that foreign banks were propped up not known at all as to which banks or how much.
Did anyoneone know a bank partly owned by Libya was bailed out ?? Certainly I did not.
…………………………………….
Now we know why the Fed fought so hard to keep the list of banks that got bailout loans a secret.
“U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.
The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.”
——————————————————-
Rusty, WHY, if everything was kosher, as you seem to believe, did Bush’s boy – Ben Bernanke – fight all the way to the US Supreme Court to prevent the information release ???
Tom
Thanks again Josie!
Rusty, ALL.
what I’m trying to say is that in my OPINION the dollar will continue to deterioate. Many expats living in the Phils are on fixed incomes and should at least be informed so they can make their own decisions about how best to protect themselves. (Most will do nothing at all and that’s fine too.)
We have only to look at federal, state and city unfunded liabilities – maybe $748,000 per US family to – to understand something is badly wrong.
We can look to prices of silver and gold to understand something is badly wrong.
We can look to the kabuki dance in Washington to see NOTHING meaningful will be done. Why do we have huge deficits ?? Easy…..cause both Dimocrats and Rethuglicans refused to make the hard choices and chose only how best to be re-elected.
I love my country – the USA – and have served her. I will miss her greatness.
Tom
Yeah, I agree that the politicians are not the least interested in us. They are interested in power. I honestly believe the Republican’s are worse on this than the dems. I’m sure others feel different.
I think Obama could cure cancer and the Republican’s and Fox news would find something that would propose why it is a bad idea.
I didn’t know that foreign banks could take out a loan at our Fed. I don’t fully understand all of this. They say the Fed is the lender of last resort but with an interest rate of zero why would I go any place else?
If I could borrow at zero from the Fed and at 1% from a bank, why go there.
I guess the next question would be why did the Fed do this. Just because they did it doesn’t make it bad. There might be very good reason for it.
And yes, this is knew money I didn’t know about. What I knew about was the guarantees the Fed made around the world. This is different.
So it sounds like the Fed made loans in USD which pumped dollars into the world economy. The discount window is generally short term though so they have likely been paid back? I don’t know.
I’m going to post a vid from PBS but some of they don’t explain everything. I once understood why the Fed is a lender of last resort but I forgot why that is so…
Watch the full episode. See more Need To Know.
From Wiki:
Though I still don’t understand except its like a bad mark on your credit rating. Almost as bad as bankruptcy and places like Moody’s manual might lower their ratings of companies that go there. Seems like they should have their ratings lowered. This might put the breaks on its use a bit. Good for Bloomberg!
You know what, much of this crises stems from the 9/11 attack. Our government doesn’t want us and the enemies of the USA to know that:
Again from wiki
Staggering information! Osama really hurt us more than I knew. I had to edit this, I typed Obama lol
With the rate at zero, I think it made people pretty quick to go to the lender of last resort. Can you blame them? I wish i could get a loan at zero percent.
I wouldn’t be surprised to find out if we some how paid people to borrow from us with some kind of discounted face value scheme that we still haven’t told anyone about.
Go find out Bloomberg!
Yes Virginia, the strange CAN get stranger.
Some of the better managed banks and brokerage firms were forced by the Fed to take money. WHY ?? To cover the banks the banks that were terribly managed of course !!
Remember boys and girls, when it comes to the Fed, high crimes and misdeamenors the BIG do not go to jail they collect dollars in the billions. The bigger and more inept the more billions. (NOT an error not a typo. The incompetent get more but only if BIG.)
The “RATINGS’ agencies…..indeed. Even thinking of these thieves drives me to distraction. Let me just say this…..two courtside seats at a Laker’s basketball game bought you the rating of your choice.
A quick look at Japan. A couple of months ago Japan’s rating was finally lowered but it took debt of about TWO TIMES Japan’s Gross Domestic Product to finally make the rating agencies move.
From soup to nuts the entire process is corrupt.
Tom
Yeah, Moody’s use to be such a trusted and respected company but it appears they were caught up in a scandal not long ago. I didn’t follow it closely but seems that people on the inside were taking payments or favors to keep ratings up? I should really research it more. I know what little snippet I caught a few months back, really surprised me.
One would think that isn’t still going on? Surely?
Moody’s, Standard and Poor’s, etc., etc the whole sorry bunch.
Bonds are rated from AAA – the highest to C – the lowest.
Mortgages that should have been rated F ….had there been such a classification…..were bundled (securitized) and rated as AAA by the ratings agencies.
No one is held accountable….no one goes to jail.
The game, and yes it is a game, is to make sure the US taxpayer is the loser…….to shift the losses to the US taxpayer. That job – shifting losses to the taxpayer – is the responsibility of the Federal Reserve Bank and that non-bank bank does its job well.
Moody’s is out of the Uk and people do go to jail. Enron and many others. Heck even Ms clean Martha Stewart got hers.
I am not so sure the snippet i read about Moody’s troubles was accurate. I just Googled it and found nothing.
Ms Clean went to jail for lying under oath and not for financial malfeasance.
(On a personal basis I cannot stand Martha. However, she was shafted…never should have gone to prison.)
I know. I use to work in law enforcement. It takes a LOT of evidence to prosecute someone.
I think it should be illegal to lie to local police too but in most cases it is not.
Actually, I don’t think she was under oath, it is illegal to lie to a Federal investigator.
Shafted no, but she was pursued because it got publicity. Not right but she did the crime.
And I can’t stand the pompous witch either.
When she went to jail I simple said “And that’s a good thing.”
Dubya Bush and Barry Obama……I loathe them both. I hold them equally responsible for the ‘current’ fiscal disaster.
Maybe Wal-Mart’s CEO agreeing on inflation will carry some weight.
Tom
———————————————–
Wal-Mart CEO: “Serious, rapid” inflation is coming
Thursday, March 31, 2011
Text Size:
The one retailer prepared to cut costs to the bone to save money for consumers now warns that prices will rise very soon — no matter what. Retailers have generally managed to hold prices low despite rising raw materials costs. They had little choice: High U.S. unemployment and lack of credit has kept people out of stores. That’s over, says Wal-Mart CEO Bill Simon. Prices will now rise across the board for all retailers, Wal-Mart included. He called the situation “serious.”
“We’re seeing cost increases starting to come through at a pretty rapid rate,” Simon told USA Today in a meeting with the newspaper’s editorial board.
Consumer prices rose by 0.5% in February, while core inflation — minus food and energy — was up 0.2%.
REMEMBER FOLKS THE .GOV DOES NOT INCLUDE ENERGY OR FUEL IN THE CPI.
Consumer confidence fell by a sharp 8.6 points in March, reports The Conference Board, after climbing in February, in part on expectations of coming inflation.
I don’t know, many members of the Fed are already there and believe the continued buying back of T-bills needs to stop. Others, they seem to have a plan and are going to stick with it. Like a kid caught in a lie but just want let it go.
I just want them to stop and stop now.
Just heard on the news moments ago.
The US must borrow an additional $2.7 trillion over the next 12 months to stay afloat.
It is so hard to tie this all together.
Let’s see, we buy back our own debt to stimulate the economy and then we borrow it back? It would seem that way but with accounting inside the government it is dangerous to apply common sense.
It seems a little crazy, we are buying back our t-bills but the way it is done doesn’t really involved cash changing hands. I mean the Treasury doesn’t actually print more money to buy back the debt. Its all electronic.
I know the gold standard doesn’t really make sense but it sure was easier to understand. Someone will jump me for that but it makes little sense to go dig up something that someone places a value on that is also just vicious then go stick it in another hole.
Now if we ever figure out a way to electronically deposit oil to power our cars without actually putting gas in the tank, they’d probably find a way to foul that up. ha-ha
I just read that China is reducing its holding in the dollar but not from a very good source but if true, that has also weakened the dollar.
There’s a guy out there, selling junk about the dollar is going to die this year. He also used Iran as an example of proof that foreign governments are dumping dollars. I mean come on, we are practically at war with Iran and they can’t legally buy our goods, of course they dumped their dollars.
China has been the chief critic of the falling dollar and if they dump their cash it will fall some more. If they hurt the dollar we can’t buy their exports. That is what keeps the whole system in check. I’m rambling…
Rusty…to complex for the average person to fig. out and as soon as you think you have it fig. out..it all changes…I know here in the USA..they pay you below 1% on most of money in bank..they they have a list of fees they charge that are out horriable….The whole system is screwed up..They try to tell the average person here that there is not much inflation….ask the average person after they go to the different stores here and there if there is not much inflation…..sure there is inflation..much more than the goverment says there is..I always thought when inflation when up..interest rates went up…does not seem to be the case the last 10 years or so…only ones making money off all of this is the very rich and those that understand how to manipulate the system..that brings to mind the banks and etc..banks are paying nothing for your or mine or any other average persons money, but the banks are still making money…a lot are still doing fancy remodel jobs and sure their hihger ups are doing just fine..so as they say…..they have’s are having more and the have nots are having less…that seems to be the trend…..enjoyed reading this post Rusty….
The gotcha fees the banks charge are insane.
Once I paid a $37 NSF fee because there was a PENDING charge on my credit card. The money was in the bank and nothing every went NSF because that pending chage was never going to be finalized. The bank didn’t care. I wish you hadn’t reminded me. Now I’m mad again. ha-ha
Yep Rusty…that still goes on..what you just said…they make big money on that one..and they are creating new ways to rip you off in one way or the other…maybe grand pappy was, or was that granny..of just put your cash in a tin can and hide it in the wall of the shack…not to bad a idea, unless the house burns down..so sorry my reminder made you mad…you have all day long to get happy again…have your honey spoil you a little and you will forget all about it.
Inflation…..the .gov does NOT include energy and food in the core inflation calculation thus able to present a low inflation number to the gullible public.
Inflation up…interest rates usually go up…..YUP. Here’s the problem. The federal debt AND city, county and state debts are so massive the Fed doesn’t dare move interest rates. How-sum-ever, inflation is increasing and interest rates WILL increase.
China, especially China, will demand higher interest rates to loan the US any more money. (Also China has told Barry Obama and Hitlery Clinton they are tired of US lectures on human rights.) China, and Russia, both understand the dollar is destined for the srap heap of failed fiat currencies so far as being the world’s reserve currency and both with countries will help US politicians speed the process.
Yep Tom your right..The towns..city..county states are all in the grand rip off of the normal person right along with the feds doing their part…Of course as you said none of them want to see interest rates go up..because then they might have to do something constructive instead of destructive, because that would…
Causing great and irreparable harm or damage to their plan of spending more than they take in, so of course they do not want to see interest rates go up and are happy with worthless printed money… and one more thing…..we are getting to be a weak country when our leaders take that kind of bull sxxt from China….of course the leaders in the USA right now are near worthless in my mind..and I mean demo’s and repukes…both kinda the same…not sure if any one in the USA goverment can save or change what is going on….I quess time will tell…
PLEASE read this guy. His opinion is worth about 1.2 trillion more than my opinion !! Gross has is dumping Treasuries AND selling T’s short.
If nothing else, please rerad this segment:
“Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates.”
———————————————————
Bill Gross, founder of Pimco, the $1.2 trillion investment management firm that used to buy bonds, has stated very publicly that he considers US Treasury securities to be high risk, low reward investments.
“If I were sitting before Congress,” Gross recently remarked, “and giving testimony on our current debt crisis, I would pithily say something like this: ‘I sit before you as a representative of a $1.2 trillion money manager, historically bond oriented, that has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden.
Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates.’”
Gross is not merely selling Treasuries, he is selling them short. His flagship, $235 billion Pimco Total Return Fund (PTTAX), now holds a net short position in “government-related” debt securities, while also sitting atop an enormous $73 billion pile of cash.
They are all ready doing this…”by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates.”…and the normal person has not a clue what they are doing…just drifting along thru life trying to make it thru a another week, month…and get this..if you are a senior…soon you will not be able to get a ss check in the mail…..you will have 2 choices….the government fancy debit card….or…direct deposit to a bank….sound ok..but then if you take a bigger look at it…the crooks…( the government and banks ) are making a small wind fall or big wind fall…depends on how you look at it…on the seniors social security check…How..well the bank has your money before you do….so they could use your money to leverage for a loan…but u make nothing on it….and then you the social security recipient…you have to write a check or use your debit card to use your retirement money and in the process of all of this the government has a nice record of what you are doing with your money and if you do not do it right will cost you some of your check….now on the feds debit card…for social security recipient….you pretty much are subject to the rules on that on that debit card deal..get this..they say no charge to use the card if you use at one of the banks approved by the feds…hello…not every little dink town has one of them fed approved banks.so..to me what a rip that is…..of course you can ride into your bank ( for now ) and take out the cash….of course the social security department take on this is they save a stamp…..and in the same sentence saying screw you the USA POSTAL SERVICE….so on and on it goes….when or where it will end..no body knows….Time for a beer….
Tom, I don’t know why your comments keep getting moderated. I looked in the settings to try to find something that was triggering it.
Couldn’t find anything.
It would be better if you didn’t quote so much from other sources. It makes Google think I’m stealing content and they’ll spank me. LOL
You know, there are a lot of really crappy policies in place right now. They have been made necessary from both internal mistakes and our enemies. Though, that attack shouldn’t have happened. Read Richard Clark’s (sp) book on it and you’ll see if you can leave the Fox news crap in the dust.
There are crappy policies in place that prevented a severe depression. I’m a libertarian though most people don’t understand that and don’t see me that way. I am a practicable one though. There is a need for government, at best government is a necessary evil but it is necessary.
I haven’t seen anything done that didn’t have benefits for the people. They were drastic measure that really do have consequences. The consequences for doing nothing would have been devastating.
It would have been worse than the great depression. Which reminds me, when Obama was on the campaign trail he called the 2008 or was it 7 crises the most serious since the great depression. Fox news scoffed at that idea. They later ate their words.
Though those really crappy policies have hurt me by lowering the dollars to Philippine peso exchange rate they needed to be done.
But enough is enough. And we are at the point of enough!
My sister sent me this…..if you are on social security or going there, this may be of interest……
THIS SENIOR CITIZEN NAILED IT!
Alan Simpson, Senator from Wyoming, Co-Chair of Obama’s deficit
commission, calls senior citizens the Greediest Generation as he
compared “Social Security” to a “Milk Cow with 310 million teats.”
August, 2010. Here’s a response in a letter from a guy in Montana …
I think he is a little ticked off! He also tells it like it is !
“Hey Alan, let’s get a few things straight…
1. As a career politician, you have been on the public dole for FIFTY
YEARS!!!
2. I have been paying Social Security taxes for 48 YEARS (since I was 15
years old. I am now 63).
3 My Social Security payments, and those of millions of other
Americans, were safely tucked away in an interest bearing account for
decades until you political pukes decided to raid the account and give
OUR money to a bunch of zero ambition losers in return for votes, thus
bankrupting the system and turning Social Security into a Ponzi scheme
that would have made Bernie Madoff proud.
4. Recently, just like Lucy & Charlie Brown, you and your ilk pulled the
proverbial football away from millions of American seniors nearing
retirement and moved the goalposts for full retirement from age 65 to
age 67. NOW, you and your shill commission is proposing to move the
goalposts YET AGAIN.
5 I, and millions of other Americans, have been paying into Medicare
from Day One, and now you morons propose to change the rules of the
game. Why? Because you idiots mismanaged other parts of the economy
to such an extent that you need to steal money from Medicare to pay the
bills.
6. I, and millions of other Americans, have been paying income taxes our
entire lives, and now you propose to increase our taxes yet again. Why?
Because you incompetent basxxxxs spent our money so profligately that
you just kept on spending even after you ran out of money. Now, you come
to the American taxpayers and say you need more to pay off YOUR debt.
To add insult to injury, you label us “greedy” for calling “buxxxhit” on
your incompetence. Well, Captain Bxxxxhit, I have a few questions for YOU:
1. How much money have you earned from the American taxpayers during
your pathetic 50-year political career?
2. At what age did you retire from your pathetic political career, and
how much are you receiving in annual retirement benefits from the
American taxpayers?
3. How much do you pay for YOUR government provided health insurance?
4. What cuts in YOUR retirement and healthcare benefits are you
proposing in your disgusting deficit reduction proposal, or, as usual,
have you exempted yourself and your political cronies?
It is you, Captain Bxxxsxit, and your political co-conspirators called
Congress who are the “greedy” ones. It is you and your fellow nutcases
who have bankrupted America and stolen the American dream from
millions of loyal, patriotic taxpayers. And for what? Votes. That’s
right,
sir. You and yours have bankrupted America for the sole purpose of
advancing your pathetic political careers. You know it, we know it, and
you know that we know it.
And you can take that to the bank, you miserable son of a B.
If you like the way things are in America , delete this.
“It would be better if you didn’t quote so much from other sources.”
Very well, I shall desist as well as cease and abstain.
Tom
“I haven’t seen anything done that didn’t have benefits for the people.”
I cannot begin to articulate how much I disagree. (I’m 80% Libertarian and 20% fiscal conservative.)
“….benefits for the people……” Do you mean we the people of the United States ??? Do you mean ALL the people have benefited ?? As we seem to be focusing on the 2008 to date fiscal debacle I can think of NOTHING that benefited all the people. NOTHING.
Tom
No Tom, I don’t mean all of the people. No policy that i know of has ever benefited all the people. Many of the policies have harmed me personally. That doesn’t mean the policy is bad. I don’t look at just myself and how it affects me. I know most people do just that and vote just that way. I don’t do that.
Every policy will have a negative side. Every policy will have a negative impact in some way. There is always a consequence to a choice. But no choice, no policy also has a consequence. They tried, Hoover I think, tried to do nothing after the great depression, people languished in the streets, protesters were treated horribly and spat on by the rich and powerful. FDR came in and spent money and brought the USA back to its feet. But as always, too much of a good thing is harmful.
Policies in the USA have hurt the dollar to Philippine peso rate of exchange. It has hurt me. The policies have helped the American and world economy. If it goes too far and it may have already gone too far, it will end up hurting. Take a little medicine and get well. Take too much and it is poison.
My sister sent me this…..if you are on social security or going there, this may be of interest……
THIS SENIOR CITIZEN NAILED IT!
———————————————————————–
Dan,
certainly a fine rant and alan simpson did not get to Harvard because he was a champion of ‘we the people’.
However, the Senior Ranter is wrong where he places blame:
WE, THE AMERICAN VOTERs ARE TO BLAME. We the voters elected charlatans and thieves to congress. That in and of itself would not have killed the US but we continued to reelect them year after year after year.
Even today we believe either Dims or Rethugs will save the day. Now that we still believe at 11:45 is sad. Midnight is only about 15 minutes away.
EVERY FIAT CURRENCY THE WORLD HAS SEEN HAS FAILED. The US dollar is failing as hard as it can. The kabuki dance in Washington continues unabatted. Kindly remember boys and girls, the US dollar is backed BY NOTHING save the promises of politicians in Washington.
Tom
Hey guys, lets keep the discussion related to the exchange rate in the Philippians. Perhaps it is time for me to start posting on rustyferguson.com again. I’ve let that site die.
I really like to have comments but its going into a totally political discussion
Eusty,
present policies of the Federal Reserve have been disastrous for the citizens of the United States……..disastrous for the American dollar.
What was the ‘stated*’ reason for establishing the Federal Reserve in 1913: TO PROVIDE FINANCIAL STABILITY FOR the FINANCIAL MARKETS.
How well has the Fed performed in its only stated duty ?? One great depression and countless recessions tell me not very well.
“Hey guys, lets keep the discussion related to the exchange rate in the Philippians.”
“I really like to have comments but its going into a totally political discussion.”
The reasons behind the declining value of the dollar against the peso of the Philippines are ENTIRELY POLITICAL.
However, obviously, I will yield to the boardmeister’s request and this will be my last post.
PLEASE remember guys, every fiat (paper only) currency has failed. Now is the time for the dollar. To think otherwise would would have to believe in the Congressional clowns in Washington, DC…..hehehehe…rots of ruck on that one !!
At least consider buying a few shares of companies such as SLW (NYSE) or SSRI (NASDAQ). Both of these companies deal in silver and will go up as/if the dollar goes down. Do your own research of course.
Tom
*Though implemented in 1913 the Fed was conceived in 1910 in TOTAL SECRECY by six of the richest men in the world at that time. The real purpose of the Federal Reserve was to form a cartel and to create a vehicle to move losses from the BIG banks to the Federal government…meaning us of course…….and to discourage banking competition.
“EUSTY”…..uh that would be RUSTY !! Sorry guy.
Tom, do you realize that a strong dollar hurts most working Americans?
The weakened dollar does not hurt the average American, it increases exports and it decreases imports.
Most American’s are not travelling overseas, they are not investing in currency and the lower value of the dollar helps put them back to work.
How the dollar trades in the Forex has nothing to do with what the dollar is worth internally. That is a function of inflation.
Pumping money into the economy puts people to work and lowers the value of the dollar. China is screaming to high heaven that we are purposely manipulating the value of the dollar. They are screaming because it hurts them.
There are HUGE massive benefits to the policy. The policy is financial it is not political. The Fed is removed from politics as it does not answer to congress or the president.
Rusty,
yes, simple as I am, I do understand a bit re economics.
In past recessions, the way out was to lower the dollar and via manufacturing exports, pull ourselves out of the recession. But not this time.
Creating trillions of dollars out of thin air is destroying the dollar. Whether the policy is financial or political makes no difference. When more dollars are chasing the same amount of goods that is inflation – to me.
I am a Libertarian-Conservative…..about an 80-20 split. I’m guessing you are a progressive politically. Prolly we will never agree on economic policy.
Tom
Rusty, please understand my fondest desire is for you to be right and me to be wrong.
http://www.fool.com/investing/international/2008/12/08/beware-of-the-rising-dollar.aspx
We must have got someone’s attention! I got an email from “Bernerke” just now. It say, in part:
Surely this is no hoax! Surely it’s not a phishing attempt. LOL
Well your good news from the ‘Federal Reserve Board’ beats my good news from the UN where I have been ‘reliabl;y’ (I mean surely the UN wouldn’t lie ?)informed me $850,000 USD awaits !!
I hope everyone remembers their experiences over the last six decades when we discuss our government. Just so many rant on about Obama and the Democrates and how they are to blame for our situation. #1. Spend money before it becomes inflated. What is debt when money is borrowed in 1965 when a mustang cost $1,600 or today when a mustang costs $45,000 ? When we pay the defecit it will be with inflated dollars so there is actually a downward slop on the magical graph the Republicans always whip out to beat up Democrates with. The same ones who started this mess when Bush signed a bill to spend $40 Billon three wiiks after 9-11 for the war on terror and he got us into 2 wars and stopped the tax on rich oil men, Shell posted the biggest profit in corporate america history in 2009.
You would be broke if you had to pay for your Mom/dads retirement and medical care. Thank God Democrate Roosevelt created Social Security and Democrate Lyndon Johnson created Medicare to take the burden off of families and share the burden with the Robber Barons of American Commerce………..that is until Republicans get in office and reduce government intervention like that A-s H-le Regan WHEN HE DEREGULATED THE BANKING INDUSTRY DA DA DA DA DA DA DA..Oh yea Reagan also fired all of the Air Traffic Controllers because they were going on strike for better working conditions DA DA DA…Now thanks to that Republican A-s H-ole the problem was not solved, both Air Traffic Controllers and Airline Pilots are over worked and FALL ASLEEP ! Good God man, we used to get rotten meat in cans and little girls worked to death by the age of 11 in the wonderful USA up until a DEMOCRATE
Man, I typed a long rant about republican foul-ups including the current air traffic controllers falling asleep an unresolved issue that those controllers went on strike for and republican idiot Regan fired them all. He also deregulated the banks…………a republican! You guys for all of your complaints have money from Social Security because Democrate Roosevelt started it. Also you have private savings because we did not have to bear the majority of our parents expenses as they grew older because another Democrate created Medicare to help them with their medical costs. We also have an excellant food and drug administration copied the world over and decades before other nations thank to Democrate Woodrow Wilson. Just what has the Republicans done for us common folk anyway? Create wars, let Banks out of control (defaulting banks 2009), let oil companies out of control (gulf spill, largest profits in American history), suspend tax increase on the richest 2% of Americans that will pay off the National Deficet (dude how about a spell checker on this site ?). The Republicans have been creating disasters and then scaring the American public into believing their is a crisis to shake the money tree. For the purpose of obtaining entitlement money and redirect it for PORK BARREL shenanigons in their districts to buy electorial votes for their re-elections. Where are we gonna be when we have tw0-yes 2 sets of aging parents living with us or not totally supporting them, FOOD-CLOTHING-HOUSING-MEDICAL-DENTAL-NURSING CARE…Where will our children be when we are so preoccupied helping our parents (everyone is not rich and pensions are disappearing) that we cannot aid in their college tuitions ? ? Come on people….
where did my comment go?
“When we pay the defecit it will be with inflated dollars”
Agreed and a new wave of inflation is well underway though still mostly hidden as energy and food are conveniently omitted from the core CPI calculation.
You still think in terms of Dimocrats and Rethuglicans and there I do not agree. My eyes finally opened in about the fifth year of Dubya Bush. Finally I realized that did not matter which party was in power the country was shafted.
Be careful on Reagan……he was a Dim before a Rethug and I believe, at heart, a Fabian Socialist.
I’ll have to do research on why food is left out. The light bulb on that is not going off. If I knew that, I forgot it.
The reason energy cost are not considered is not for convenience. Including it would distort the numbers. Including it would include the cost twice as it is factored in the cost of producing and selling items.
I think the USA can and will beat back inflation. The measures taken by the Fed will give it huge tools in fighting inflation. The same low interest rates can now be raised to slow the economy when that is needed. It isn’t needed yet as the economy is still puttering but getting better. Even more powerful is that at the beginning of the banking crises, the Treasury or the Fed, I’m not sure who controls that…. Probably the Fed, lowered the reserve requirements by a factor of four in a single night. I suspect it has been further reduced since then. Probably by a lot. This can be contracted. The Fed can start selling T-bills rather than buying them.
A strong dollar is good for those of us that travel, it isn’t all that wonderful for the American economy. Everything in capitalist economics requires balance and if policy doesn’t see it out, that old invisible hand will smite thee that does not observe it. A strong dollar is great for me as it improves the dollar to Philippine peso exchange rate.
That move to drastically reduce the reserve singled to me that something was seriously wrong. The actual crises hit a few months later. But that event caused me to email my much trusted finance professor for the first time in about 10 years. I sure wish I could tap his brain on a daily basis.
The CPI does include Food prices it does also include gasoline and fuel oil. I had my doubts about food, I didn’t know it included gasoline. So it makes a lot of sense the way it is done to me. Sounds like Fox news is up to its never ending campaign of misinformation.
CPI FAQ
You know, it does seem to that electricity purchased by consumers should be included to me. I’m going to have to research this some more now… ha-ha
Ah ha.. There seems to also be a Core Consumer price index.
It measures NON seasonal items. It does remove food an energy but the CPI does not. At least that appears to be what has been going on with this confusion to me.
Still, it seems that electricity is not included in CPI.
I’m still uncertain as I can’t find anything that explains the difference in CPI and Core CPI.
They are different, the CORE CPI removes them, the CPI does not. Seems the experts think core CPI is a better measure of inflation.
You know, the CPI doesn’t tell us what it cost to live, it tells us if it is going up or down.
Perhaps core is a better indication over time but what is a better indication on our wallets right this moment and that’s what most of us care about would be the full CPI.
However, long term policy shouldn’t be based on short term conditions. Just like it is risky to finance long term assets with short term debt.
I should have stated CORE CPI numbers…the numbers most always quoted.
An important Fed committee meets June 22….prolly will raise interest rates. If interest rates are raised prolly precious metals will decline. Interesting to watch reactions of the stock markets.
QE2 ends June 30…..will there be a QE3 ??
We should have a better idea in July where things are heading….at least short term.
The Fed plans to continue its “quantitative easing” for two more months, I suppose there is no hope they will stop sooner. I would love to see the Fed raise the repo rate but I have my doubts. Doing so will increase the value of the dollar but it will hurt exports and slow the economy. Great for me, but I don’t think they are ready to do that yet. I think a rise in interest rates in this case would help the stock market. Usually there is an inverse relationship to bond yields and stock prices.
Hi Rusty,
my name is Petr and I`m from Czech republic. I tend to relocate to Philippines, so I sometimes enter to your site.
I have a sollution for your problem,maybe a little bit unusual.
CONVERT YOUR MONEY TO CZECH CROWN.
It is hard to find stronger currency than czech crown. I`m happy (now) to have that currency. The people sitting in the czech central bank are smart and liberal thinking. No money printing is expected and they refused accepting euro. Unfortunately they are the last people in Czech republic thinking like this. Have a look at cnb.cz – english version is awailable.
In the year 2000 we changed 42 CZK for 1 USD, Now we change about 16 CZK for 1 USD.
The next five years the czech crown should remain strong. After that, there will be a vote of new leadership of CNB. Only god know what will happen.
best regards
Petr
Hi Petr, from those numbers it does sound like the CZK is doing well now. Thanks for the info. It appears to have risen more than the dollar has fallen.
Gold just keeps going up. It is at $1500+ an once this morning.
If the dollar continues to do badly, the investing in any currency is not a good idea.
The dollar is in about the worst shape ever, gold is in just about the best shape ever. I would rarely invest in something at an all time high. In fact, with the dollar doing so poorly, there’s going to be a great time to buy dollars. Now may be the time.
The dollar will rise again. This isn’t going to last forever. It was only about six months ago people were scrambling to buy the dollar.
You know, buy low and sell high. Gold is high, some are saying it has entered a “super cycle” a term I’ve not heard before. I don’t care much for using cycles as a way to invest. I think it is better to look at policy (management) and market conditions.
Rusty: “I think it is better to look at policy (management….”
I agree and I am very worried.
Well the Fed meets today and there should be an increase in the interest rate to dampen inflation.
I’m GUESSING there will be no rate increase.
No interest rate increase is expected, it is very unlikely at this stage. Later in the year, probably.
I’m not worried, I have a lot of faith in America and its dollar.
That doesn’t mean the policy will always be good for me.
The big news on this meeting is that the Fed chairman is suppose to hold a press conference, that’s got a lot of people a bit jittery.
I don’t think there will be any surprises myself. Things will begin to change in the slow ways that governments move and with monetary policy, I don’t think huge movement would be a good thing in most cases.
I’ve been looking around the web to see what I can find. Going to Google finance now. Sleepy though.
Read something interesting yesterday, despite the Fed’s money creation program, the velocity of money fell. That’s why they are doing it. Things would be far worse without the policy but I might be a little better off.
On an inflationary note, Amazon revenues were up but earnings per share were down a bit from 66 cents a share to 61. I would like to buy Amazon today.
“slate.com— Tomorrow, the notoriously close-mouthed Federal Reserve is holding the first scheduled press conference in its entire history.”
Yes and that has some folks a bit nervous. Interesting and for the better I think. Of course, it also is another chance for government manipulation.
Rusty, Tom & everrryone,
may look weak now, US$ to rebound shortly. when Federal Reserve’s QE2 [Quantitative Ease or "electronic CASH purchases of US Treasuries' totalling $ 2.6 Trillion] ends june 30, 2011.
over the longer run, US$ will be weak, IF usa’s fed budget is not balanced.
in short: Buy weak US$ next 2-3 months [low], in order to sell [high] july 2011 and beyond.
said another way: Sell strong Philippine Peso now around 43s, and then buy it back @ >43s during 2nd half 2011. jmho.
Riva, The budget does not have to be balanced but it is at near historical highs and that wont do.
I agree, that’s why I said buying dollars now might be a very good idea.
I don’t buy too much of anything I don’t consume. LOL The only way it affects me is spending power. Hopefully that will change one day. I still have not given up. I plan to die richer than Bill Gates. haha Yeah right.
Fed just announced no interest rate increase.
Everything in the economy is just ducky. Well growth may be a little soft and unemployment a bit high but still everything is just……ducky.
Analysis of Fed report:
Dollar will continue to weaken while gold prices will increase. Silver too volatile to call.
But the dollar to Philippine peso remained virtually unchanged:
1 Peso to United States Dollars 43.2200012207
Rusty, that the dollar woll continue to weaken was a general satement not against ny specific currency.
Roubini has it right most of the time:
“FOMC: Runoff Reinvestment to Continue Post QE2; Growth Outlook Lower, Inflation Outlook Higher
In the April Federal Open Market Committee meeting, the Fed confirmed that the QE2 program would be completed by June, while reinvestment of the runoff on the Fed’s portfolio will continue beyond June: The Fed’s growth forecast was revised lower for 2011.”
Snake oil. All the prophets of doom and he included is trying to scare people into buying his products.
History does not support him. You’re more than welcome to believe it. I don’t and I won’t.
If you believe it and have any saving in cash, then you should turn it all into gold while it is selling at its highest rate ever. After all, I saw one Fox news expert saying would go to $5000. Oh yea, he’s a bullion dealer.
Test post:
Meet the press
» Ben Bernanke held a press conference at the end of the Federal Reserve’s latest policy meeting, the first time a chairman of the central bank has hosted such an event. There were no surprises as Mr Bernanke affirmed that the Fed was in no hurry to raise interest rates; its $600 billion quantitative-easing programme will end in June. See article
» After an ever-so-brief lull, gold and silver prices continued their breathless rally after Mr Bernanke’s press conference, with gold well above $1,500 a troy ounce and silver marching towards $50. The dollar sank to a new three-year-low against a basket of currencies. See article
Tom, read my comments here: http://cebuexperience.com/living-in-the-philippines/send-money-to-philippines/ It appears one post by a POSSIBLE fishing site caused all other comments to hang up and attribute new post to his IP and URL.
Thanks much for the help Rusty !
Today’s XE Rate is = 42.8100
Today’s Xoom rate is 41.9703
Today’s Central Bank = 43.018
Gold is = US$1536.30
Silver Buying US$48.35
The dollar to Philippine peso rate is still falling since the Fed meeting now at 42.7.
I posted an article at http://rustyferguson.com/politics/economics/just-how-weak-is-the-dollar that some of you might be interested in. The dollar isn’t in its worse shape ever but it isn’t far from it.
And here is proof people will say anything to sell a book
From the XE News Letter:
Dollar to Philippine Peso rate for 06/17/11 is 43.6800003052 to 1. That is a sharp one day rise! Will it hold? I have no idea.
hi guys, today is 7/29/2011, i’ve been watching this soap opera about raising the debt ceiing, which they will. and when they do, the dollar is going to have a rally in the market but not long. I can’t believe they are going to kill the dollar by keep printing the money and not cutting anything, I guess its true the dollar is unsaveable is not real money when it was not backed by gold anymore, its just a currency now. I ignored it for 2 years and now its time to get out, I already took all my stock investments and converted it to cash, when I moved to the philippines in a few months i will convert them to pesos when the exchange rate is good. I really feel bad our people in the states, no jobs or cut hours and thats just the beginning.
Jules, the “rally” will not only not be long it will be extremely short.
The dollar is not dead, it will recover most of its glory once the economy is in a boom period and it will once again be in a boom period.
However, a debt default cannot be undone. It will result in damage that last 50 years.
Five years from now, the US economy will be booming and people will start doing stupid things again that will create the next bubble.
It is a common and repeated business cycle. When things are good, people tend to think they will always be good, when things are bad, people tend to think it will always be bad.
This has been repeated over and over and it will be repeated again. If you wait until the dollar is strong to convert to peso, you wont be doing it in a few months.
“The Philadelphia Federal Reserve Bank said manufacturing contracted in mid-Atlantic states in August, with the bank’s broadest measure of business, the diffusion index of current activity, declining sharply. The index dropped from a positive 3.2 in July to negative 30.7.”
from upi
Because I thought interesting and current….today. Not quite sure what will cause the dollar to strengthen.
Rusty, the link appears automatically. Every site I frequent allows for excerpts from articles but ‘requires’ a link to the original. More and More sites are automatically posting a link when an excerpt is copied as UPI did above.
Of course remove the link if you think best.
Tom