Fears of dollar collapse as Saudis take fright

[P_Funk]

Originally Posted by flyingdane

Well said!!..

Refer to Skybird on that. I never stop being amazed at how hypocritical many 'capitalists' are. Oh boy socialism is just fantasy and utoipianism. BUT THE MARKET ECONOMY NEVER DOES ANYTHING SINISTER! As Skybird said, straight from the Capitalist text book.

You wanna talk about tyranny... sheesh every empire before democratic society was built on small groups of people with all the money. And whats changed...

People that revere Milton Freidman's ideological religion are either ignorant of what it really means, or aren't being honest about what it really means. The standard economic practises of American Foreign Policy, as directed by the business interests that control it, have basically intervened in favour of American economic interests. The US orchestrates Allende being assasinated in the coup that brought Pinochet to the throne and interstingly enough Milton Freidman was the economic advisor the Pinochet after that... funny how that all lines up.

[August]

Originally Posted by P_Funk

socialism is just fantasy and utoipianism.

Socialism is no utopia. It is the death of self improvement. A hell of nanny state mandated politicaly correct thinking that destroys individualism and leaves life bland and boring. Sinister things do happen in market economies just as they happen in socialist paradises. However in capitalist systems the greedy and evil do not control everything and everybody whereas in socialist systems that is the ultimate goal.

[Skybird]

Originally Posted by Von Tonner

Skybird, economics is not a forte of mine but I have a question. Would not the reintroduction of the gold standard help to bring some sanity and what would this do for SA if this happened?

Ou, never thought on that, but in principle it makes sense not to print money freely, but to link it on real values and economical posseions in any way. The hidden inflation started to explode in the years after Bretton Woods was abandoned. This system allowed the US almost unlimited autonomy concerning its financial policies, but the Fed hat to base every dollar on gold reserves. All other nations had to adapt and run around to keep up with the system, so it was of great comfort for America, but did not treat others as equals. For corrections eventually needed if the system lost too much balance, there was the ICF founded (so one may ask why the ICF is still there when Bretton Woods has no meaning anymore, and judging by its questionable acts and influence this is a very valid question indeed, to me it was kept alive since it prooved to be a valuable tool for manipulation of the finance markets, and especially foreign economies of perceoved weaker nations, to bring them in line with the needs and demands of the first world industry, and keep them weak). Bretton Woods was abandoned when Vietnam became simply too expensive as that the US could afford it anymore without changing the way it raised it's funds. The price was costly, even more so since the dollar also is linked to oil sales, whioch gives America a constant revenue from every drop of oil being sold anywhere i the world (at least when it is OPEC oil). The ammount of money circulating increased dramatical in the following years and decades. Most people think of inflation in terms of price raises concerning every day goods and food and such things, and think the inflation is around 1-2%. That is wrong, the so-called "hidden" inflation which is measured by the increase of money and values that are circulating, compared to the time period before, is clearly in the tw-digit range, and you will get very different values from different sources: it varies between 10-20% (per year!), depending on what source and what method to count you choose.

When people tell me we have a stable currency, I can only laugh out loud. What we have instead is a gallopping inflation. This u nhealthy trend has seen a sharp increase in the past 10-15 years, when stockmarket deals suddenly became en vogue in Europe, too, and every little john smith and Hans Schmidt suddenly thinks he must own shares. an immense ammount of money (and value) was created that way - that has no solid "grounding" by real values in terms of goods, properties, material items. These fictional values were used to create new and other fictional values, via the stockmarket. see, this is how the immense bubbles and overratings were created.

Without need, I may add.

So, yes, at first glance I tend to think that linking currencies back to gold reserves may be a reasonable thing. but the opposition to such a move would be overwheliming. It is all those private people and companies and bankers that have a lot to loose once the bubble becomes apparent, or bursts. Currently I see no chance that going back to that system has even a slight chance. Also, the Chinese with their monumental reserves would not participate, and global economy design without china is a useless effort in the future. they would loose immense values, and the strategic option to threaten America (and the West, btw.) by releasing their dollars to the market. Why should they wish for that? It is not in their interest, and would slow their growth.

[mookiemookie]

Not to mention that the key to making the gold standard actually work is the faith the people place in the government actually sticking to it. After the Great Depression (caused in no small way by the gold standard and there's a strong correlation to the length of time that a country stayed on the gold standard to how greatly the Great Depression affected said country) it's clear that the gold standard can be dropped at any time.

Uncertainty in the markets is generally a bad thing and people will take a "flight to safety" into the one asset that's safe under the gold standard - gold. If the price of gold goes up, and your currency is pegged to it, then your currency is devalued....essentially paying more for gold since the supply of it is drying up because people are hoarding it. Deflation occurs and then you're in a deflationary spiral....from Wikipedia: "decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to decreases in price."

I don't think it's an idea that can work in today's deregulated currency markets.

[P_Funk]

Originally Posted by August

Socialism is no utopia. It is the death of self improvement. A hell of nanny state mandated politicaly correct thinking that destroys individualism and leaves life bland and boring. Sinister things do happen in market economies just as they happen in socialist paradises. However in capitalist systems the greedy and evil do not control everything and everybody whereas in socialist systems that is the ultimate goal.

And what is your basis for this argument? Have you examined every possible concept for socialist development? Have you personally investivgated all the many socialist microcosms which have functioned in individual contexts all around the world in random little places? Or do you just accept the mainstream's limited vision of it?

This idea that somehow capitalism has won is fallacious and frankly annoying. Many different socialist concepts for social existance have been put forward and shot down before they were even tried. The only examples you then have are 20 and 30 year old stories of failed states or terribly misleading examples of 'communist' dictatorships that never were socialist.

You say that socialism is about eliminating the individual and homogenizing the process of exitance. That is far fromt he truth. If this was the result in some cases, then that was a failed attempt. The real idea behind socialism and its many different rethinkings (some people refuse to be considered a socialist simply because of the connotation and misleading ideas associated with it) is that you eliminate the unfair obstacles that make one man succeed where an identical man fails. The basic idea is to make class advantages as unimportant as possible. You might worship the mantle of capitalism but every decade rich are richer and poor are poorer. It is still true today that if you have money and wealth you need not even bother trying since you're already won the rat race.

The much lauded American Dream is a dead idea. It thrived in the 50s in the post-war boom where basically every allied nation threw cash at New York to pay off their war debts and the military industrial complex that was born in the war continued to thrive. And even if America is pretty well off all around the world minor countries that try to achieve some independance, be it economically, or democratically, are all muscled into line by some form of economic oppression handed out by the many moneyed powers. The world bank, or just America's own questionable foreign policy.

[JALU3]

Socialism . . . to go off topic . . . is a wonderful theory. However, I don't think it will work due to the greedy, self-serving, nature of mankind. In an ideal world, socialism would work, because everyone would strive for the common good, making products and services that others need, and getting back an equal share of products and services in return. Yet, that would assume that all people are putting an equal amount of effort, and all things were valued equally.
This doesn't work due to the nature of mankind. max consumption with minimal amount of effort, self advancement over the advancement of the group/community, the needs of the self out waying the needs of the whole or the many, the not in my backyard mentality, etc. Now, if someone would like to argue that the nature of mankind is predisposed towards socialism . . . I would like to see it . . . but I think that the nature of mankind can be seen in the kindergardens and high school open areas, when people are allowed to be themselves. Sorry for the bleak outlook, but there it is, my opinion.

[Letum]

Norway is about the most socialist country in the world. It is doing quite well!

[JALU3]

Now back on topic . . . and talking of trying to keep ones currency devalued to support increased exports. The EU is now trying to urge the market to keep the EU at a lower value.

[August]

Originally Posted by P_Funk

And what is your basis for this argument? Have you examined every possible concept for socialist development? Have you personally investivgated all the many socialist microcosms which have functioned in individual contexts all around the world in random little places? Or do you just accept the mainstream's limited vision of it?

This idea that somehow capitalism has won is fallacious and frankly annoying. Many different socialist concepts for social existance have been put forward and shot down before they were even tried. The only examples you then have are 20 and 30 year old stories of failed states or terribly misleading examples of 'communist' dictatorships that never were socialist.

You say that socialism is about eliminating the individual and homogenizing the process of exitance. That is far fromt he truth. If this was the result in some cases, then that was a failed attempt. The real idea behind socialism and its many different rethinkings (some people refuse to be considered a socialist simply because of the connotation and misleading ideas associated with it) is that you eliminate the unfair obstacles that make one man succeed where an identical man fails. The basic idea is to make class advantages as unimportant as possible. You might worship the mantle of capitalism but every decade rich are richer and poor are poorer. It is still true today that if you have money and wealth you need not even bother trying since you're already won the rat race.

The much lauded American Dream is a dead idea. It thrived in the 50s in the post-war boom where basically every allied nation threw cash at New York to pay off their war debts and the military industrial complex that was born in the war continued to thrive. And even if America is pretty well off all around the world minor countries that try to achieve some independance, be it economically, or democratically, are all muscled into line by some form of economic oppression handed out by the many moneyed powers. The world bank, or just America's own questionable foreign policy.

Yeah right, well foreigners have been predicting my countries imminent demise ever since we became independant. That is over two centuries of market based economy and we've done pretty darn well for ourselves so far.

Socialist governments on the other hand have always either failed or turned despotic rather quickly, except in a few small communities which, imo, are the only places that such a political system can work.

[Letum]

Originally Posted by August

Socialist governments on the other hand have always either failed or turned despotic rather quickly, except in a few small communities which, imo, are the only places that such a political system can work.

That rather depends on how broad your description of sociolism is.
There are many, many social democracys in Europe and a few in other parts of the
world. Most noteably the Scandinavian democracys, but also the UK.

Wiki says:
[2]

Originally Posted by Wiki

Social democracy is a political ideology that emerged in the late 19th century out of the socialist movement.[1] Modern social democracy is unlike socialism in the Marxist sense, which aims to replace the capitalist system entirely; instead, social democrats aim to reform capitalism democratically through state regulation and the creation of state sponsored programs and organizations which work to ameliorate or remove perceived injustices inflicted by the capitalist market system.

[Skybird]

Originally Posted by JALU3

Socialism . . . to go off topic . . . is a wonderful theory. However, I don't think it will work due to the greedy, self-serving, nature of mankind.

For the same reason, capitalism in the meaning of "seeking your own wellbeing will serve the communal wellbeing" cannot work, too. It's just survival of the strongest, the winner takes it all, the looser has to fall (preferred silently, and never critizising the winners).

That's why someone came up with the idea of social market economy. Which actually was hoped to be a mixture: competition yes, but not to a degree that a competitor is allowed to seek his wellbeing at the disproportionate cost of the many, or the almost execution of his rival. Social solidarity, meant to make a certain minimum of help for the the weaker ones and investing into the communal funds not voluntary, but obligatory. State control in so far as it is needed to guarantee a minimum of euqality of chances for those entering the competition.

Unfortunately, this concept - in theory maybe the most reasonable sounding of all these - got destroyed or perverted for the same rasons like capitalism and socialism before.

It seem we are always doomed to return to the law of the jungle, no matter what coverup-story currently is en vogue.

In the end, I see materialism (and the resulting "anti-ethic") at the root of the problems of both capitalism and socialism. I do not really like both.

[P_Funk]

Originally Posted by JALU3

Socialism . . . to go off topic . . . is a wonderful theory. However, I don't think it will work due to the greedy, self-serving, nature of mankind. In an ideal world, socialism would work, because everyone would strive for the common good, making products and services that others need, and getting back an equal share of products and services in return. Yet, that would assume that all people are putting an equal amount of effort, and all things were valued equally.
This doesn't work due to the nature of mankind. max consumption with minimal amount of effort, self advancement over the advancement of the group/community, the needs of the self out waying the needs of the whole or the many, the not in my backyard mentality, etc. Now, if someone would like to argue that the nature of mankind is predisposed towards socialism . . . I would like to see it . . . but I think that the nature of mankind can be seen in the kindergardens and high school open areas, when people are allowed to be themselves. Sorry for the bleak outlook, but there it is, my opinion.

I'm sure that there was a time when they thought the idea of democracy on the scale which we have as being as ridiculous as your own assertions. People grow, and so do societies. Its all about development. Within the lifetime of every strand of genetic code disseminated through my family from beginning til ultimate disapperance from the gene pool I'm sure we won't see the kind of 'socialist' ideas in practise that I think about. Does that mean it will never happen? I don't think so. I think its rather arrogant to sum up the potential of human nature. And, should you choose to believe it, evolution adds many special advantages over time. The way I see it the ego and self-serviance of people is related to natural instincts of animals mixing with emotional self-awreness born in our own evolution. Whos to say this is the end, aside from the christians, of our growth?

Originally Posted by August

Yeah right, well foreigners have been predicting my countries imminent demise ever since we became independant. That is over two centuries of market based economy and we've done pretty darn well for ourselves so far.

Socialist governments on the other hand have always either failed or turned despotic rather quickly, except in a few small communities which, imo, are the only places that such a political system can work.

So America is the example of success. Does the existance, however long, of America's predominance as an economic power (and to say over 200 years is a bit of a stretch, much the same as calling the Roman empire as going as far back as the moment the Republic was formed prior to its conquests) immediately preclude the success of any other system? This single minded capitalism or naught business is rather pig headed and small minded. History is much bigger than America and the world will out live this brief period of American dominance. Systems have grown dominated and disappered in favour of others. Maybe you could approach the subject with a bit less emotional bias face it as a neutral entity.

What can work? Citing examples of failures is by no means exhaustive. You interpret the broad and very negotiable nature of socialist concepts with very pejorative slants and by imposing very limited imaginings of them on the entire circus. And within the very restrictive environment of a capitalist dominated world the growth of socialist ideas has been severely retarded by countering forces invested in preserving the status quo. Did many ideas fail because they couldn't work? Or were they prevented from succeeding before they had a change to sh1t the bed?

Its never so simple as saying "Capitalism Won".

[Bosk]

I certainly don't think America can keep going around invading whoever it pleases, for whatever reasons it pleases and expect the rest of the world to grin and bear it, and keep happily buying it's dollars. Nor does it's "you're either with us or with the terrorists" style of diplomacy seem to be winning it any friends either.

I've also no idea how anyone in America could think that moving most it's manufacturing sector to China could possibly be healthy for it's long term economic outlook.

[P_Funk]

Originally Posted by Bosk

I certainly don't think America can keep going around invading whoever it pleases, for whatever reasons it pleases and expect the rest of the world to grin and bear it, and keep happily buying it's dollars. Nor does it's "you're either with us or with the terrorists" style of diplomacy seem to be winning it any friends either.

The other thing to bear in mind is that it isn't just America generally invading nations. When you characterize it that way it sounds like something thats not very nice but also tolorable inevitably. Its not just about people or nations getting miffed, its a matter of the stability of the world economy. If America somehow ends up invading OR Attacking Iran its likely going to end our era of economic prosperity. Iran has the means to effectively halt the flow of oil from the Middle East, between their own reserves and the military capability to sink any tankers that want to run the waters within Iran's reach, and that reach is ample enough to affect enogh oil routes that comprise enough of a bulk to crash the market.

After that you have America truly losing all credibility as a superpower. Being the most powerful nation doesn't mean you can invade everyone, it means that everyone trusts you and is willing to work with you or at least respect you. America's brazen and irrational foreign policy since 2003 and earlier is a serious threat to itself. People say that everyone predicts America's decline incorrectly, but invading a major nation such as Iran would be the ultimate gaff in America's long history of questionable military moves.

Lets just pray Bush is satisfied with keeping the numbers in Iraq high until his term runs out.

[Skybird]

Originally Posted by P_Funk

After that you have America truly losing all credibility as a superpower. Being the most powerful nation doesn't mean you can invade everyone, it means that everyone trusts you and is willing to work with you or at least respect you.

Show me a single small or huge empire in the past where it worked like that. the Sassanides? Athens? The Romans? Egypt? The Medieval european kingdoms? the mongoles? China? The geman emperor? The Arabs? The almohades? Napoleon? The dutch traders? The Spanish, Portuguese? Austria? Prussia? The British empire? the third Reich? Russia, before and during Stalin? the US?

An empire cannot escape the necessity to act, and intervene, else it falls apart. It cannot tolerate endless turmoil in it's outer periphery, this becomes the more threatening the more the centre of turmoil is away from the empirial centre. In the network modern world today is, the separation of centre and periphery is not as important anymore as it once has been. This means, the dangers could become threatening everywhere - not just in some far away borderlands.

This is not meant as a comment of morals of politics. It simply describes a self-dynamic no empire can escape.