I wonder what will happen to the mighty dollar and indeed all countries that deal with the petro-dollar ( namely china ) if it continues to de-value...perhaps countries will start to trade more in the Euro...or even pound sterling…that will certainly put a limit on the coffers of the Americans huge war chest….perhaps America can solve this by invading someone! I know Iran-wait, some else has already had that idea…..

mike pain wrote: As long as the so called leaderz have no domcestic economic plan, war will continue to be the tool they use to drive a sector of the economy and keep americans distracted from their own predicament.

Few minutes ago on BBC WORLD they had some economics experts and one of them is an analyst with investment bank Goldman Sachs based in Newyork..This dude kept emphasising that the the only solution lies with trade talks with China AND he kept going on about China revaluation will solve the US deficit issue.The interviewer (Daljit)failed to understand the real reason why US has such a massive deficit.

the answer is LOW SAVINGS RATE BY AMERICANS!!

Simply put, the Chinese save and the Americans spent. By saving, the Chinese use that savings to sell products, NOT BUY PRODUCTS and the Americans BUY THESE CHINESE PRODUCTS WITH BORROWED MONEY!!

The US senators using the China revaluation issue are just plain "political talk" to get votes. They just could not think of any other ways so they have to find a "culprit" to justify protectionist legislation like slapping tariff for Chinese products.

The US legislators should think of ways to improve US ability to sell goods abroad at LOW PRICES BASED ON LOW COST!! That's pure economic sense, and the Chinese understand this basic economic rule. The Americans, including the US legislators, don't want to deal with this basic rule. What the US legislators are doing is TRYING TO LEGISLATE ECONOMICS!!! IT WILL NOT WORK AND NEVER WILL!!

So far markets in Singapore are about to close and it doesnt look good

of course America, could simply suspend the stock exchange to solve this problem, short term...but I’m concerned with those other countries that have been Coerced into accepting the dollar as their own...if the dollar falls they're screwed.....they only thing keeping the American economy afloat now is the constant circular spending, essentially American dollars are paying into keep Americans in jobs...I wonder what will happen if china suddenly decides America has to pay back it’s dept or be declared bankrupt ( a practice several American firms have done onto many African countries)

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mike pain wrote: That would be very interesting indeed. Cant say the outcome wouldnt B well deserved.

Most of the Major Commodity markets such as Gold, Silver,Coco, etc trade in Dollar so countries ( of Companies in Foreign Countries) have to hold dollar reserves this gives the U.S trading advantage (like britain used to have within it's Empire using Sterling).

In the short to medium term I would sell the dollar buy the Euro as a recession has been in the pipeline now for some time.

In respect to China the main issue as I see it is that as an economy it's manufacturing base is growing steadily and under cutting Western products, this can be seen in the Clothing sector in a big way most of the clothes made in the u.k shops are from China.

So labour costs make china competitive at the same time the Chinese Government have a huge reserve of U.S government bonds that is virtually holding the U.S economy to ransom for it the chinese decided to sell it's Bonds it would mean economic melt down.

It has been argued that the real reason behind the Iraq war was the idea of starting a rival Oil Exchange in Iraq or Iran and use the Euro as the currency medium. This would have an adverse effect on the Dollar when you think of it why don't the developing countries have stronger exchanges and use them as the centres of trading commodities rather than all that business going to the U.S and Europe ( Liffe or NYMEX or even the London Metal Exchange)

basically stock market crash is the consequence of an unstable economy, not the cause of it. The primary cause for the erractic behaviour of western economies during the 20th century was due mainly to the existence of central banks. Central banks were introduced under the belief that you could eliminate economic cycles forever by controlling the money supply; history has shown that certainly wasn't the case. To stimulate an economy, a central bank will keep the discount lending rate low.

However, as the money under a central banking system is usually fiat the expansion of the money supply devalues the purchasing power of the money already in the system, also known as inflation. This is the reason why we are seeing the first of a series of market corrections that will inevitably lead to a major crash - years of money expansion in a desperate attempt to ensure that recessions are brief.

I read an article quite a while ago that listed about 40 different factors, a Chinese economic recession being one of them, that any one of those factors by themself could lead the economy into a recession and that the possibility of any of those factors not occuring is unlikely. The only way you can ensure that an economy remains relatively stable is to eliminate central banks and return to a commodity based money supply.

There are Four main potential factors for an economic crises as defined in the book "The Future of Money"

1. The Growth in the Older Generation of the Baby Boomers



2. Environmental Problems with the world like Global Warming



3. The increased use of Derivatives Especially currencies



4. Knowledge Abundance .....................The democraization of information, ideals and tranactions evento flow at the speed of light.

One of the most obvious actions that the world could do to stop this mad rush to economic and environmental destruction and decimation of societies is to revert back to not having Interest on Money...............usury. This is one of the single destructive features in our society that will never be addressed it would be interesting if people campaigned to abolish the use of interest.

In the future fiat money as Coltrane mentioned will not be back to commodity basised but will be digital in it's entirity.Money is simply a concept. And with current technology a smart card will do nicely.

Another thing I believe that the Asian community will do ( as it as a community has the POWER to do so) will be the establishment of an asian community currency that will and can be used side by side with the host countries currency. This would strenghten the Asian Community considerably.

The AfricanCaribbean community simply doe'snt have the organisational or political maturity to carry of a simply idea in this country.

As the great man said: "Money is neither made or lost, simply transfered from one illusion to another."

Gordon Decko,

Wall Street