In my internet marketing travels I have come across some interesting people and get some very interesting emails from time to time. Not that I believe we can put all the blame on any one person, even Bush. This seems to fit the situation.
This article comes origanially from: http://www.urbansurvival.com/week.htm
"Strong Dollars" and other Foreign Policies
As the end of the Bush Presidency rolls into view, the headlines continue to underscore that despite arguments to the contrary, we seem not to be doing so well in the foreign policy arena.
Not to picks on just one example like "Poland rejects U.S. missile shield offer", or The Wars, I’d point to the largest problem the administration has brought to both investors and regular everyday Main Street America.
That’s the often claimed "strong dollar policy" of the White House, mouthed by various Treasury and Federal Reserve officials on cue.
Let’s roll back the clock to see where the dollar was when The Decider was one day into his Presidency on January 20, 2001. But first, here’s a headline from that day to put you into the mood for this little exercise in forensic economics: "We got some dancing to do," Bush says!‘
On that day, ONE U.S. Dollar bought 1.07030 Euro according to the Oanda.com historical exchange data.
When the markets closed on Friday the Fourth yesterday, the exchange was ONE U.S. Dollar buying 0.63180 Euro.
In other words, relative to Europe, the Dollar has lost more than 40% of its overseas purchasing power under Bush. Say, that’s some "strong dollar policy" don’tcha think?
Not that the decline has been entirely relative to the Euro. When Bush took office ONE U.S. Dollar would buy $1.51340 Canadian. and the conversion to gold (or more properly, the XSAU proxy) was based on $264.55.
One U.S. dollar now buy 1.0156 Canadian, a loss of 32.9% when we’re bidding against Canadian money for world market goods. Can you say "Spot the lunies/loonies?" And the price of gold (via the XAU proxy) closed this week at $932.
And that’s without getting into how oil prices have fared…
The fact is, we continue to spend more than we make…so we water down our currency. Balance of trade deficits do come home to roost one way or t’other.
Even Wikipedia, which seems to have an answer for just about everything, seems a bit unclear on what the Bushistas have mean when they talk about the ’strong dollar policy’:
"Strong dollar policy is a U.S. policy based on the assumption that a strong exchange rate of the U.S. dollar is in the U.S. national interest and the interests of the whole world."
That works as long as you don’t remember the definition of Narcissism is:
"Narcissism describes the trait of excessive self-love, based on self-image or ego."
Strong Dollar is strong ego coupled with an untreated case of denial with a dose of spendthrift thrown in.
A simple thought experiment makes the point: With 195 countries in the world, how many can have the strongest currency relative to all others? (Hint: One, last time I checked). And we’re not even in the running, yet jingoism about strong dollars makes us look like Global Buffoons.
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Here are a couple of inconvenient results of Bush foreign & economic policy (and that mythical ’strong dollar’) after 7 1/2 years of Bush at the helm:
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The U.S. has slipped relative to India One buck buys 43.28250 Rupees now, versus 46.43 at Inauguration in 2001.
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The US has slipped versus Russia. One US buck bought 28.3540 Rubles back when and it’s down to 23.44150 Friday.
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And we’ve slipped relative to Brazil. From 1.9580 Reals to 1.6095 at Friday’s close.
I will give the Bush crowd credit for improving our position slightly vis-à-vis Mexico.. Incoming, the dollar bought 9.792 Pesos. Today it buys 10.3883 Pesos. This foreign & economic policy triumph has only cost us a drug war on the southern border, which seems to be dissolving before our eyes, while Mexican truckers undercut US drivers. And oh yeah, there’s the www.spp.gov movement, too. And rumors of the Amero persist, although a little research says nope, not yet. That’s yet..
It may seem a little harsh, but I measure foreign policy by what it puts on the tables of Mains Street Americans. Less.
Eight years of corpgov’s "strong dollar policy" has been delusional are best and deliberately deceptive at worst. We keep coming back to that "The harder we work, the behinder we get" problem. Joseph Tainter notes that’s when past civilizations have either walked away or revolted…when the marginal rate of return on harder work falls below zero, a country or siciety is in trouble.
Are we working hard/longer than we were 8 years ago? I expect so. Further ahead? LOL, you’re kidding, right?
The dollar is less sound than when Bush took office, as evidenced by the soaring values of currencies of other countries. Can the administration do anything about it in the final six months? I wouldn’t bet on it. Rumors of another BANKruptcy continue, and a further meltdown in the markets seems probable this fall.
Oh, and did I mention tourism to the US is declining, too?"
