Wednesday, April 16, 2008

Dollar At All Time Lows

The dollar just keeps dropping. Our currency is near free fall.
The dollar sank to an all-time low against the euro Wednesday with new reports showing consumer prices heading higher and construction of new homes plunging in March to the lowest level in 17 years.

Inflation also rose overseas. The euro reached $1.5968 after the EU's statistical agency Eurostat said that annual inflation rose on higher prices for transport fuel, heating, dairy products and bread. It was the quickest rise in 16 years.
The problems effecting the United States economy are quickly spreading to other countries. What we all need to understand is how the sinking dollar is playing a major role in this worldwide downturn.

Oil is paid for in dollars. With a declining dollar it takes ever more dollars to purchase a barrel of oil. The higher oil prices are fueling a worldwide explosion in commodity prices. That in turn is leading to higher prices for everything including food.

Those higher food costs are causing political turbulence and riots throughout the world. I know that is a very simplistic explanation but it is one that can be easily understood by most people. How did we get to this place economically? A major part of this problem started with banks and mortgage companies that felt loaning huge sums to those that could not afford it was a good idea. Those bonds were sold worldwide and losses related to them just keep coming.

Those most hurt by those losses are the poor and middle class with the executives of those companies raking in millions. Does that sound at all fair? We need a fundamental change in our policies and our thinking. All too often people vote based on where they hope to be economically instead of where they are. that often makes getting where you want to go impossible. The middle class needs to understand that they are helping in their own demise.

Tuesday, April 15, 2008

Inflation Soars

Hey don't worry as long as you don't eat or drive its not that bad.
The Labor Department reported Tuesday that its Producer Price Index, which measures wholesale prices, jumped 1.1% in March, the second biggest gain in the past 33 years and much higher than forecasts.

The so-called "core" PPI number, which excludes food and energy prices, rose a more modest 0.2%, in line with expectations.
See what I mean about eating or driving? Just cut those two things out and your finacial house will be fine. With obesity such a problem in the United States we should look at this as a sign from God. Since we won't stop eating so much on our own we are getting a helping hand from the Federal Reserve.
The Fed has slashed interest rates numerous times since last September to try to get the economy out of this severe funk. But so far, the most notable consequences of the rate cuts are a drastically weakened dollar and surging commodity prices.

Oil prices hit a new record high Tuesday, as did the prices per gallon of gas and diesel fuel.

In the past twelve months, sugar prices are up 27%. Corn prices have surged 67% and wheat prices have shot up 73%.

The argument that economists should look more at "core" inflation has to ring hollow with consumers who are taking a big financial bite every time they go food shopping and fill up their car's gas tank.
The economy is a mess yet John McCain is even in polls with Clinton or Obama. Have the American people lost their minds? Have they forgotten the peace and prosperity of the 90's. Are they really that stupid to want to continue these disastrous policies? We are closer to depression era financial conditions than at any time since the great depression. Wake up before its too late and everything that has taken so long to build will be forever ruined.

Monday, April 14, 2008

Worldwide Riots Over Food

Riots from Haiti to Bangladesh to Egypt over the soaring costs of basic foods have brought the issue to a boiling point and catapulted it to the forefront of the world's attention, the head of an agency focused on global development said Monday.

"This is the world's big story," said Jeffrey Sachs, director of Columbia University's Earth Institute.

"The finance ministers were in shock, almost in panic this weekend," he said on CNN's "American Morning," in a reference to top economic officials who gathered in Washington. "There are riots all over the world in the poor countries ... and, of course, our own poor are feeling it in the United States."

World Bank President Robert Zoellick has said the surging costs could mean "seven lost years" in the fight against worldwide poverty.
"While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day," Zoellick said late last week in a speech opening meetings with finance ministers.
Just how bad is it for the world's poor?
"In just two months," Zoellick said in his speech, "rice prices have skyrocketed to near historical levels, rising by around 75 percent globally and more in some markets, with more likely to come. In Bangladesh, a 2-kilogram bag of rice ... now consumes about half of the daily income of a poor family."

The price of wheat has jumped 120 percent in the past year, he said -- meaning that the price of a loaf of bread has more than doubled in places where the poor spend as much as 75 percent of their income on food.

"This is not just about meals forgone today or about increasing social unrest. This is about lost learning potential for children and adults in the future, stunted intellectual and physical growth," Zoellick said.

Dominique Strauss-Kahn, managing director of the International Monetary Fund, also spoke at the joint IMF-World Bank spring meeting.

"If food prices go on as they are today, then the consequences on the population in a large set of countries ... will be terrible," he said.

He added that "disruptions may occur in the economic environment ... so that at the end of the day most governments, having done well during the last five or 10 years, will see what they have done totally destroyed, and their legitimacy facing the population destroyed also."
The world is on the brink of major economic and social upheaval. This is the result of Conservative policies that never saw the benefit of alternate energy sources. Those policies have strengthened the very countries that want to destroy us and placed our own nation on very shaky economic footage. When will people finally realize that these Conservative policies have damaged the world and left the United States more vulnerable than ever to terrorism. Is there anyone who believes you can stifle fanaticism while people are struggling to survive? 4.00 per gallon for gas seems like a minor issue compared to the billions who are struggling to fill their stomachs.

When will we understand that our inattention to our own political system has worldwide implications. The riots in other lands as a result of skyrocketing prices can easily be tied back to political decisions here in the United States. Right now a child is dying from starvation as a result of the conservative movement in the United States. Remember that when the images of the worldwide riots and starving children are broadcast while you eat the dinner that they will never have.