Exorcist Economist is running a story (now on the cover) about the financial meltdown and the Fed's rate cut. Dramatic times. I've placed the following comment, and, if anything, I will be really popular as the apocalypse unfolds and we start to eat rats. Here's my top-rated comment, followed by some favorite ones:
linhares wrote:March 18, 2008 22:38Now take a look at this:
Ok. I am a little on the slow side. So let me get this straight.
The US is a country that lives on borrowing.
The dollar is falling like a skydiver.
Commodity prices are soaring, and lower US demand won't change much of that.
By cutting the rates, correct me if I'm wrong, those trillions of dollars held by the Chinese, Indians, Arabs, Brazilians, and so on, will lose value even faster.
So, if these countries ever decide to protect their (hard-earned) cash, they should switch. Perhaps to the new alternative in town, the Euro.
And if they switch, which they should rationally do, the dollar ceases to be the world standard, inflation in america skyrockets overnight, and the value of goods inside the usa becomes a huge unknown.
But of course I'm wrong. The best way to treat a (debt) alcoholic is to give it an ample supply of liquor, for sure.
Great Cthulhu wrote:March 19, 2008 17:14
Personally, I am doing everything I can to rack up over $1 billion in personal debt, knowing full well that the US government will bail me out, as I'll be someone "too big to let fail" at that point. The problem is in getting enough credit cards to max out. You'd think with all the junk mail those credit card companies send out, I'd have over $1 billion in my back pocket by now, but I don't. With a credit limit of even $1 million per card, I'd need a thousand of the things to hit my target debt. Most only start with $25,000-$100,000, depending on what fake information I've used to get free subscriptions to magazines that target corporate executives, and that means I'll need about 10,000-40,000 credit cards for my project.
I guess I should just face it. I'm too poor to matter to the Fed. Oh well... a dollar collapse will at least make illegal immigration a moot issue, leave the US unable to pay for its wars overseas, and will give me the opportunity to discover a new career catering to the wants and needs of foreign tourists here in the states... perhaps I could supplement my income as a taxi driver at nights and earn some precious Euros, Pounds, Canadian Dollars, and Pesos in my tips... that would be something!
Or my personal favorite:
cognate wrote:March 18, 2008 22:00========================
Ahhhh, the wonders of the welfare-warfare state.
Better brush up on your potato planting, chicken feeding, and goat milking skills - just like in Doctor Zhivago.
Humorous remarks aside, this is of sobering consequence. The real risk is that of a change of historical proportions.
The USA has benefited for over a century now, as the dollar became the world standard, the international safe haven against bad times. But there is an immense, unsustainable, amount of dollars stashed in the Bank of China, or in the Brazilian Central Bank, or with the Arabs.
If these folks decide that they want to protect their reserves, they will switch. And if there is such a switch, it will quickly become into a massive free-for-all international panic against the dollar. God knows what might happen afterwards.
And what's most eerie about the whole thing is the following set of facts:
- I've yet to see Hillary talk about the weak dollar as America's largest problem
- I've yet to see McCain talk about the weak dollar as America's largest problem
- I've yet to see Obama talk about the weak dollar as America's largest problem
(For what it's worth, I'm stacking on Euros... and I'm leaving Citibank.)
Maybe we should even start praying... please god... just prove this scenario wrong.