Citrus Growers Forum

dauben · Posted: Sat 01 Nov, 2008 1:39 pm

I thought this was a good article so I thought I'd post the link here:

Quote:

Call this a crisis? Just wait
Actually, don't wait, because we've got to stop a bigger economic disaster in the making: 78 million baby-boomers eligible for Social Security and Medicare.

By David M. Walker, former U.S. Comptroller General
Last Updated: October 30, 2008: 10:55 AM ET

(Fortune Magazine) -- Staring into the abyss always focuses the mind, which can help you avoid falling in. So let's take a look at the potential catastrophe that awaits us once we survive our current crisis. . . .

Rest of article is here: http://money.cnn.com/2008/10/28/magazines/fortune/babyboomcrisis_walker.fortune/index.htm

Phillip

Sylvain · Posted: Sat 01 Nov, 2008 8:06 pm

Yes, all that is true. As I said before (now the tread has disappeared Wink

) USA has a huge debt. But what is not said in this article is WHO owns the debt. In an other way, who owns USA? It used to be Arabic countries, mainly Saoudi Arabia (who also owns a big part of France) but it is now days overcome by China and India!
Yes, you read well! USA owner are Saoudi Arabia, India and China.

I don't think this mail will last for long. Wink

Too hard to read.

Sorry, Sylvain.

dauben · Posted: Sun 02 Nov, 2008 2:48 am

Sylvain wrote:

Yes, all that is true. As I said before (now the tread has disappeared Wink

) USA has a huge debt. But what is not said in this article is WHO owns the debt. In an other way, who owns USA? It used to be Arabic countries, mainly Saoudi Arabia (who also owns a big part of France) but it is now days overcome by China and India!
Yes, you read well! USA owner are Saoudi Arabia, India and China.

Here's a good link to the foreign holders of US Treasuries: http://www.ustreas.gov/tic/mfh.txt. China and Saudi (noted as "Oil exporters") are certainly at the top along with Japan.

The issue that the rest of the world faces is that the US has been the safe haven when there is economic problems such as the ones we face right now. Even as we discuss the amount of debt and economic crisis the US dollar is surging along with the US treasury bills. People are flocking to the safety of the US. I think this will last for a period of time before people realize that we no longer have the ability to even pay off the interest on our debt. Some have argued that the only way out will be for us to debase our currency so that we can pay off debt with cheaper US dollars. So those foreign countries (and US citizens) who think they're safe in our treasuries are going to get a return on their investments that won't buy much after converted into their currency. When that wake up call occurs, I suspect China and the Saudi's will dump our treasures like a hot potato. That will in turn prevent our foreign investment in our country and drive up yields.

Who wins in the end? I can't answer that right now, but I have believed all along that people and governments that are fiscally conservative (those who save and live within their means) will be the winners. I have a portion of each paycheck direct deposited into a bank account that holds my savings in Swiss Francs, Japanese Yen, Australian Dollar, and even the Euro (not that the last two are necessarily that safe). Right now the US dollar is very strong as people are looking for safety world-wide. At some point fundamentals will return and I think the dollar will tank. Foreign governments left holding the bag of US debt will end up getting burned. I also think with a debased currency, it will make it much harder for foreign governments to export to the US. The US trade deficit will decrease because we will once again be producing items that are much cheaper (because of the debased currency) and Europe may have a hard time with their economies because products made in the USA will be much cheaper than purchasing it locally (overseas). In the end we may all end up loosers.

The IOUSA movie has now been released in a 30 minute version. I haven't seen it yet, but you may want to take a look: http://www.iousathemovie.com/. I plan on buying the full length DVD when it comes out.

Quote:

I don't think this mail will last for long. Wink

Too hard to read.

Sorry, Sylvain.

As far as I'm concerned, as long as this sticks to an intelligent, clean, and factual discussion I'm fine with this discussion. The US has problems (and so does France). I'm not offended by discussing our issues (when they're true) and I hope you aren't offended either.

Phillip

Patty_in_wisc · Posted: Sun 02 Nov, 2008 4:45 am

Good article Phillip...thanks for posting it.
And...well said response.
I am a baby - boomer, & for years now, they've talked of not having enough funds for S.S. for us (although I have several years before I get there LOL).
We had hard times before --the great depression etc., but we always bounced back as I'm sure we will again. I'm still very proud to be an American & to live & work here is an honor & pleasure. I wouldn't want to live anywhere else. There are still ppl trying to move & live here from other countries so we can't be all that bad! We'll pull thru!
When there is a catastrophy in any country, aren't we about the first to be there to help? Sometimes other countries help us (like England), & some turn away, but it makes me feel good that we are there to help as we are here - like with generous donations to Red Cross etc., we are very giving.
Sorry if I'm going OT but I got motivated somehow.
I just watched the video & holy cow....how depressing. Busch administration did not do a lot for us!!!! It shows we had several ups & downs over the years, but this will be a tough one to come out of.

_________________
Patty
I drink wine to make other people more interesting Wink

Sylvain · Posted: Sun 02 Nov, 2008 7:55 am

Phillip, this is a good analysis.
Few points:
- The document shows the debt of US. It would be much more interesting to have the debt balance, (US debt - Other country debt).There, I think Japan goes down in the list and India goes up, even Russia would go up.
No time to look for it. If you find it...
- I don't understand everything on the document but it seams it only speaks of state debt. Private (industrial) debts must be taken on account.
- I am not as sure as you are on dollar strongness.
- "Europe may have a hard time with their economies because products made in the USA will be much cheaper than purchasing it locally"
This is only true for few products. For example, in France, USA is about 2% of our trade balance. We don't buy from the US. Just for curiosity I looked in my house what is coming from US: I only found one, a garmin GPS. All the rest come from Europe or china.

Quote:

As far as I'm concerned, as long as this sticks to an intelligent, clean, and factual discussion I'm fine with this discussion. The US has problems (and so does France). I'm not offended by discussing our issues (when they're true) and I hope you aren't offended either.

Everything OK for me.

dauben · Posted: Sun 02 Nov, 2008 2:03 pm

Patty_in_wisc wrote:

Good article Phillip...thanks for posting it.
And...well said response.
I am a baby - boomer, & for years now, they've talked of not having enough funds for S.S. for us (although I have several years before I get there LOL).

I watched the IOUSA movie last night also (or at least the 30 minute version). The statistics are frightening. It sounds like we only have a few years before social security is going to cost more than we have.

Patty_in_wisc wrote:

We had hard times before --the great depression etc., but we always bounced back as I'm sure we will again. I'm still very proud to be an American & to live & work here is an honor & pleasure. I wouldn't want to live anywhere else. There are still ppl trying to move & live here from other countries so we can't be all that bad! We'll pull thru!

I agree. People will always find a way to survive and I'm proud of the principles that our country was founded on. I'm not necessarily as proud of what our country has become. Then again, I can't say there's any other country that I think too highly of either. Socialism has taken over just about everywhere and people think the "government" is the solution to their problems. What people don't realize is that they are the governement and the solution will ultimately rely on them (either through increased taxation or decrease in spending).

Patty_in_wisc wrote:

Sorry if I'm going OT but I got motivated somehow.
I just watched the video & holy cow....how depressing. Busch administration did not do a lot for us!!!! It shows we had several ups & downs over the years, but this will be a tough one to come out of.

After seeing the movie last night, they do raise some good points. I am both a social and fiscal conservative. While I'm a Bush supporter and support the wars in Iraq and Afghanistan, the one area I think Bush failed at was being a fiscal conservative. As the movie points out after our prior wars our percentage of debt to the GDP skyrocketed also, but the difference between now and then is that our leaders were adamant about paying down the debt once the war was over. In today's political arena and the demagogy that takes place, we're in for more spending. The wars have driven up our debt, but the things I don't understand are why entitlement programs were expanded like the prescription drug plan. Likewise the redistribution of wealth in the form of a $600 tax rebate is a lot more liberal than it is conservative. With the promises that Obama has made, we're looking at more of the irresponsible fiscal behavior. Then again, I think his promises are lies. I don't think he's going to cut taxes for everyone making $250,000 or less. I also think he's going to expand entitlements and social programs to appease the masses. The areas that I think he is going to cut are going to be pulled out of the Clinton era. Our military will be pulled out of Iraq and Afghanistan and mothballed. Any war between Israel and Iran we'll end up staying out of. McCain has a history of opposing entitlements and irresponsible spending, but on the election trail, he's also trying to appease the masses with promises that aren't very conservative. In the end, I think both are lying about what they plan to do because I don't think it's possible for them to have the resources to do any of it.

Anyway, the above is mostly opinion and not to be taken as fact. My crystal ball may not any better than anyone elses. Smile

Phillip

dauben · Posted: Sun 02 Nov, 2008 2:26 pm

Sylvain wrote:

Phillip, this is a good analysis.
Few points:
- The document shows the debt of US. It would be much more interesting to have the debt balance, (US debt - Other country debt).There, I think Japan goes down in the list and India goes up, even Russia would go up.
No time to look for it. If you find it...

That's a good point also. I don't know what other countries owe the US. So far I haven't heard too many commentators discuss that issue. I'd be far less worried about our debt if I knew that we had other countries that owed us just as much. I don't think that's the case, but it would be a good statistic to take a look at.

Sylvain wrote:

- I don't understand everything on the document but it seams it only speaks of state debt. Private (industrial) debts must be taken on account.

Sure. With me being a novice when it comes to economics, I'll throw this out there as a wild guess. I suspect that corporate debt impacts the average citizen in the form of "jobs". If a company can't afford debt and payrolls, they either default on their debt, cut payrolls, or both.

Sylvain wrote:

- I am not as sure as you are on dollar strongness.

The dollar was very week for a while, but has become a lot stronger recently. Since I started holding my savings in foreign currency I've lost money (particularly in the higher yielding currencies such as the Austrailian dollar). The fundamentals that caused the dollar to be weak previously are still there, but between the Yen and dollar being considered as "safe", these two currencies have been a lot stronger since the global financial "crisis" started. Fundamentals I think will ultimately cause the US dollar to be weak again, but who knows when that will occur.

Sylvain wrote:

- "Europe may have a hard time with their economies because products made in the USA will be much cheaper than purchasing it locally"
This is only true for few products. For example, in France, USA is about 2% of our trade balance. We don't buy from the US. Just for curiosity I looked in my house what is coming from US: I only found one, a garmin GPS. All the rest come from Europe or china.

I think that's very true today, but at one time many items in the US were "Made in Japan" because they were cheap. Now China has taken over that status. I actually owned Garmin stock until recently and when the dollar was weak, I liked Garmin's prospects since they were buying out all of their European distributors. It was more competitive for Garmin over Tom Tom because of the exchange rate (not to mention TomTom paying through the nose for the mapping company they were in a bidding war over). You are correct though. Right now we have a trade imbalance and American products aren't seen overseas as much as foreign products are seen here (like French wine barrels. Smile

).

Sylvain wrote:

Quote:

As far as I'm concerned, as long as this sticks to an intelligent, clean, and factual discussion I'm fine with this discussion. The US has problems (and so does France). I'm not offended by discussing our issues (when they're true) and I hope you aren't offended either.

Everything OK for me.

Sounds good. Just a disclaimer I did interject a few opinions in this post. Not to be taken as fact.

Phillip

Sylvain · Posted: Tue 04 Nov, 2008 10:37 am

Nearly everything is explained here: http://moneyasdebt.net/
Free for French speaking people. Laughing

English speaking people must pay the DVD.