A Bill for an act introducing a new mathematical truth and offered
as a contribution to education to be used only by the State of Indiana free of cost by paying any royalties whatever on the same, provided it is accepted and adopted by the official action of the Legislature of 1897.
Section -1- Be it enacted by the General Assembly of the State of Indiana: It has been found that a circular area is to the square on a line equal to the quadrant of the circumference, as the area of an equilateral rectangle is to the square on one side. The diameter employed as the linear unit according to the present rule in computing the circle's area is entirely wrong, as it represents the circle's area one and one-fifth times the area of a square whose perimeter is equal to the circumference of the circle. This is because onefifth of the diameter fails to be represented four times in the circle's circumference. For example: if we multiply the perimeter of a square by one-fourth of any line one-fifth greater than one side, we can in like manner make the square's area to appear one-fifth greater than the fact, as is done by taking the diameter for the linear unit instead of the quadrant of the circle's circumference.
Section -2- It is impossible to compute the area of a circle on the diameter as the linear unit without trespassing upon the area outside of the circle to the extent of including one-fifth more area than is contained within the circle's circumference, because the square on the diameter produces the side of a square which equals nine when the arc of ninety degrees equals eight. By taking the quadrant of the circle's circumference for the linear unit, we fulfill the requirements of both quadrature and rectification of the circle's circumference. Furthermore, it has revealed the ratio of the chord and arc of ninety degrees, which is as seven to eight, and also the ratio of the diagonal and one side of a square which is as ten to seven, disclosing the fourth important fact, that the ratio of the diameter and circumference is as five-fourths to four; and because of these facts and the further fact that the rule in present use fails to work both ways mathematically, it should be discarded as wholly wanting and misleading in its practical applications.
Section -3- In further proof of the value of the author's proposed contribution to education and offered as a gift to the State of Indiana, is the fact of his solutions of the trisection of the angle, duplication of the cube and quadrature of the circle having been already accepted as contributions to science by the American Mathematical Monthly, the leading exponent of mathematical thought in this country. And be it remembered that these noted problems had been long since given up by scientific bodies as insolvable mysteries and above man's ability to comprehend.
ENGROSSED HOUSE BILL
No. 246
Read first time Jany. 18th, 1897
Referred to Committee on
Canals - rep. and referred to Com.
on Education Jany. 19th, 1897
Reported back Feby. 2d, 1897
Read second time Feby. 5th, 1897
Ordered engrossed Feby. 5th, 1897
Read third time Feby. 5th, 1897
Passed February 5th, 1897
Ayes - 67 - Noes -0-
Introduced by Record
IN THE SENATE.
Read first time and referred to
com. on Temperence, 2/11/97
Reported favorable 2/12/97
Read second time and indefinitely
postponed 2/12/97
He was employed at a Los Angeles-based security firm known as 3G Communications,
The malware contained a sniffing feature that siphoned PayPal credentials from Protected Store, a section of Windows that stores passwords users have opted to have saved. Although Pstore, as the Windows feature is often called, encrypts the information before storing it, Schiefer's malware was able to read it, presumably by escalating its Windows privileges.
On one occasion, in December 2005, he moved money out of a Suffolk National Bank account to buy undisclosed domain names from a registrar by the name of Dynadot
Schiefer also used the botnet to collect more than $19,000 in commissions from a Dutch company called Simpel Internet for installing its adware on end users' machines without their permission.
>"When you consider the efficiency gains and TCO when you migrate to MS and the entire.NET framework, Microsoft practically *is* paying you to use Windows."
So I guess that by using only linux both at home and the office means I'm "practically" supporting Microsoft financially???
Actually, in a way I guess I am, since otherwise I'd switch to a Mac, and then everyone else would have iEnvy(TM) and consider switching too. And we all know, "once you go mac, you never go back."
Ever since the Lockheed bribery scandal, its been illegal for US citizens or corporations to bribe anyone, anywhere in the world, same as its illegal for them to engage in pedophilia abroad.
So, how much $$$ (campaign contributions - the only "legal" bribe) Microsoft is going to spend to "make this go away"?
> Follow the trail. This act is being brought forward by congressmen bought by lobbyists, this time the **AA. They want this bill passed so that the government can end up doing their work for them."
Elections are coming up in a year...
> "Well, at least I'm Canadian."
So you have to stick your 2.1 cents in:-) Maybe they should be lobbying Canadians - more "buck for the bang".
Harry Truman is the only person it could have applied to. "during the term within which this article becomes operative" waa during Truman's term. No other president, past or future, is covered by that clause.
China is sending out all the signals, and the markets are reacting. So much for your "facts be damned". Must be hard to take, the capitalists beholden to "dirty pinko commies". Just one of
todays' headlines...
The once-mighty U.S. dollar risks losing its status as the world's default reserve currency now that China has signalled plans to diversify its $1.43 trillion (U.S.) of foreign exchange reserves, analysts say.
The U.S. greenback was clobbered on foreign currency markets again yesterday, tumbling against all 16 of the most-active currencies and setting new lows against the euro and the Canadian dollar during the session. At the close of trading, the U.S. dollar was worth 92.81 cents (Canadian). The loonie, meanwhile, suffered a late-day setback, losing 0.77 of a cent (U.S.) to close at $1.0775 as traders took profits.
Fresh concerns that China could diversify its currency assets away from the greenback sent the euro to a new record against the dollar, and the pound through the psychologically significant $2.10 barrier on Wednesday.
The pound rose to $2.1051 in morning trading in London before settling down to $2.1010, while the euro hit $1.4703, before settling at $1.4674, above its $1.4554 value in late trading in New York the day before.
The trigger was remarks by Cheng Siwei, the vice chairman of China's National People's Congress that the country's forex regulator would shift its foreign exchange holdings and that China should consider moving its reserves to "stronger" currencies.
"The comments certainly spooked the market to say the least," said Peter Scullion, Vice President of the FX Currency Department of Nomura in London. He added that too much should not be read into the comments, given that Cheng was not a particularly senior official and as the Chinese government tried to retract the comments soon after they were made. "It's also not a secret that many central banks, particularly in the Middle East, have been diversifying away from dollars," remarked Scullion.
Scullion said uncertainty about the dollar would continue to drag it down, potentially sending the euro across the $1.50 threshold. "Realistically over the medium term between now and the end of the year there is no reason why markets wouldnt continue to push the dollar lower," he remarked.
Concerns about the health of the U.S. economy has been the underlying driver of the greenback's fall over the past months. "While we may see some periods of dollar buying, most market participants expect the dollar to weaken further given the tremendous uncertainty about the US economy," Scullion said.
Last week both the euro and the pound gained against greenback, as the U.S. Federal Reserve cut interest rates to 4.5%, ahead of this week's meeting of the European Central Bank and the Bank of England, in which both are expected to hold rates, thus broadening the rates differential even further. (See: " Rate Outlook Undercuts Dollar").
Worse than expected write downs at some of America's largest banks, including Citigroup (nyse: C - news - people ) and Merrill Lynch (nyse: MER - news - people ), could mean that the Federal Reserve will be forced to cut interest rates again, despite some recent positive data, including on jobs.
Scullion said that the gloomy outlook had sent the dollar lower even against the Japanese yen. The yen has remained weak thanks to the stunningly low interest rates, currently 0.75%, that have been maintained by the Japanese central bank. The dollar was trading at 113.16 yen in Tokyo late on Wednesday, from 114.66 yen the day before.
"during the term within which this article becomes operative from holding the office of President or acting as President during the remainder of such term."
The second amendment became operative in 1947. I think Harry Truman is safely dead.
If China just stops buying US T-Bills, what are you going to do - force them to? Remember, the US has an $800 billion a year trade deficit, and China is the #1 creditor. They announced today that they are diversifying their holdings of reserve currencies. That was enough to send the dollar down... again.
The US banking system was involved in a huge ponzi scheme, selling bad debt to investors all over the world, and now people don't trust the US, especially with the federal reserve lowering interest rates and flooding the markets with more "funny money." Why should anyone buy USD when:
the interest paid is lower than anywhere else
any interest earned is more than wiped out by the dollar's depreciating value
the US hasn't gotten control of its public debt (example: look at California facing another ratings downgrade)
US consumers are maxed out
US banks have flooded the world markets with "toxic waste" - investments that were rated AAA that are really just junk
The trust in the US administration, the Federal Reserve, the US banking system, the bond raters, US equities, etc., is gone. Its going to take a decade of "good behavior", and lots of painful adjustments, to change that. In the meantime, a lot of people are going to lose their homes, their jobs, their big-screen TVs, their life savings, and they are going to be VERY angry. And those who didn't take part in the foolish speculative bubble are NOT going to want to see their money go to bailing out people who they see, by and large, as getting what they deserve (if you got a mortgage by lying on the application, losing your home is a "just" punishment; you're lucky not to be going to jail for fraud).
The problem with your scenario is that the banks can't "forgive" the debt, for 3 reasons:
the banks don't own the mortgage debts - in most cases they don't even administer it. They're just liable because of the fraudulent packaging / rating of the debt.
the US isn't in a position to take over a foreign oil region. It can't even handle Iraq, and last time I looked, China had both nukes and the means to deliver them. Any attempt to "control" oil in the middle east by a US invasion won't work.
the rest of the world won't help finance an invasion either. They have some skin in the game as well, since its on their back doorstep, and they will have to contend with both the refugees, and the diversion of energy resources.
Simply put, the "game" has changed. Nobody believes the US is a credible invading force any more, in the sense of being able to keep whatever the US goes after. Iraq is another Viet Nam, just as Afghanistan was the USSR's Viet Nam.
"We should all pray that all the financial doomsayers and USA haters are wrong, because if the US is destabilized financially, the whole world will suffer, and we could all end up in a world war."
The US is already destabilized financially. Look at the federal deficit, the accumulated debt, the 16 million vacant homes, the 2 million homes that are expected to go into foreclosure over the next 2 years, the latest 39 billion dollar loss GM took in the most recent quarter, the tanking dollar, the inflation of stuff that people need on a daily basis (food, energy, mortgage payments) that isn't included in the "Core Consumer Price Index", the record increase of people using their credit cards to pay their mortgages and day-to-day living expenses...
There are a couple of trillion dollars of "false gains" that have to be removed from the US economy. That's going to be painful, just like any other hangover. Party's over. Unfortunately, we're all going to pay the price for the US's fake "economic gains" in the last 5 years, but a war? Not going to happen. You don't have the money to pay for your current war effort, never mind another one.
"To use the current real estate market as an example, there is a good chance that banks will forgive debt to avoid foreclosures and keep those monthly payments coming in
Actually, they haven't got much choice - unless the actual holders of the CDOs (Collateralized Debt Offerings) agree to restructure the payments, the loan administrator HAS to foreclose. The banks that originated the mortgages have no say - they repackaged the mortgages as SIVs (Structured Investment Vehicles). Now that widespread fraud is being uncovered, the banks are having to make good or face lawsuits - and (1) they haven't got the liquidity margins, (2) they didn't hedge them enough. and (3) some of the companies that offered the hedges are themselves facing bankruptcy if too many of their bets go the wrong way - and it looks like that's happening.
Again today, China said they want to diversify away from US dollars. Look at what happened. The US dollar lost another 2% against other currencies.
Nobody wants to be the ultimate bag-holder, so you can expect to see the US dollar continue to drift lower - probably another 10%-20% in the near term, and 50% over the next decade, as the reality of being unable to continually roll over the federal deficit and debt in the face of world-wide rising interest rates kicks in...
"As far as China buying a US bank, they better watch their pockets! The US financial markets are considered a strategic asset, and anyway the establishment firms won't even let young American firms into the inner circle."
Citi is already bordering on insolvency. The other banks are also caught with their ass(et)s exposed. Who has the money to bail them out? The feds? Nope - they're broke too. Plus, why should voters be stuck paying for other people's irresponsibility.
Let the market work it out. What that means is that 2 million people have to lose their homes to foreclosure (but they shouldn't have been in those homes in the first place, and wouldn't have been, if they hadn't played "the game", with a large number of them engaged in outright fraud). It also means let the international markets work it out - which means a shift away from the USD, a decline in individual incomes, and a transfer of assets to foreigners who step in to pick up the pieces. This is nothing new - foreigners already control more than 50% of the US economic engine.
Sure, they can't do it too quickly without hurting themselves - but if they do it right, they can end up owning a huge chunk of the US. Flood the market with USD, and when the banks crash, buy them.
>"It's erroneous to believe that China would willingly walk away as the US economy tanked... that is, until their domestic market makes our market seem like a drop in the bucket. I give it at least three generations, probably more, until the Chinese middle class has developed enough."
Your 3 generations is actually less than 1 generation. By 2039, the US economy will be smaller than China. India will be right behind the US. Also, the report goes on to say that they expect other curencies to appreciate by up to 300% against the USD - a polite way of saying that the dollar is expected to shrink in value by 2/3. This was BEFORE the current financial crisis.
And if your country owes foreigners trillions, no longer wants to extend you more credit, and you're broke, that's the banks' opportunity to p0wn all your a$$ets.
Watch for US bank failures, and China making a move to buy at least one major bank.
China doesn't have to "go to war" - just dump a trillion bucks in USD on the currency market, and buy a basket of Euros, British pounds, Australian and Canadian dollars, The Euro would immediately go to over $2, etc. This means that the US would be paying close to $150 per barrel of oil, since the US would now have to pay with a "hard" currency.
It would be over in a matter of hours, without a shot being fired.
They could then swoop in with the other trillion they have stashed away and buy up banks, etc., at pennies on the dollar.
Its not like the fed can do anything by printing even more money... they're already doing that, and debasing the USD without China's help.
"so the dollar will remain strong, and perhaps increase, due to having less debt, and the prospect of a large-scale war, which always leads to an economic boom."
The USD is already the "sick man", and the US no longer has the capability to finance wars. Just look at your current deficit, and your accumulated debt, and the ongoing crisis in the banking system. The only way out is for the government to devalue the dollar at a quick enough pace so that those trillions of debt aren't worth all that much - which is what the government is doing. Unfortunately, rapid devaluation also has the side effect of making your currency less appealing over the long term, which is also happening.
That's the new reality. The US consumer is basically broke, having spent more than 100% of income over the last few years. This christmas will probably be the last half-decent retail season, as a LOT of people have already turned to using their credit cards to help meet their mortgage payments. Bank failures are coming.
Actually, once less than 50% of all producing assets were owned by Americans (and that happened last year or the year before, iirc, while nobody was looking), even if the US were to become an exporting nation again, the majority of the profits wouldn't stay in the US, so China has a lot to gain by nuking the US dollar. Nuke it, then go in and buy up even more assets at firesale prices.
They could easily pull the reverse of the Hunt brother's attempt to corner the silver market.
Also, the US is unable to compete in many export market areas because the means of production were shipped overseas. How is the US going to export TVs, DVDs, laptops, LCDs,... no manufacturing plants domestically. Same with a lot of the steel plants that were shipped out in the '80s, and supertankers, etc. So, to export, the US would have to rebuild manufacturing capacity, in competition with plants that are already paid for. Where would the funds come from? Foreign investors... since they have the cash, further increasing the amount of profits shipped out of the country.
YOur reserve does not come from precious metals. The USD is a fiat currency, and is currently being undermined by your government, and the speculative housing bubble bust. If you think oil at $96 a barrel is high, wait until it hits $200 US, as the US dollar continues its decline against all the other currencies in the world.
You can't keep running a "War on Terror" if you're broke. The US is dependent upon foreign lenders. And like the old saying goes, the debtor is slave to the lender.
China - on track to beat last year's 232 billion dollar deficit.
OPEC - add 110 billion this year (or more likely 130 billion)
Oh, what the heck - lets just do the WHOLE DARNED WORLD Another $800 Billion Dollar trade deficit this year. The US consumer's credit card is maxed out.
Last stats I saw were net ouflows of $69 billion in one month. That's a lot of investment "pulling up stakes."
If push comes to shove, why should China not use all the levers it has - including the "dump the dollar" nuke option - if the US keeps acting stupid wrt either currency or politics?
BTW - the US economy has had real double-digit inflation for the last 5 years. Taking the three things that people actually spend money on all the time - food, energy, and mortgages - out of the index is just as bad as the ratings fiascos by Moodies and S & P, et., The rest of the world doesn't want US financial paper - not until they know the REAL value of the underlying assets. Do YOU believe Citibank is solvent? How can you know for sure, when nobody knows just how over-valued everything still is.
With 1 out of 8 homeowners facing foreclosure over the next 3 years, you're looking at 2012 before there's a real recovery, if then. The chance of a Japan-style ding to the economy is real. The next 5 years are going to be painful for the whole world, but the weight of the USD in the reserve basket of currencies of most nations is going to be lightened as quickly as they can w/o causing the dollar to crash completely.
Heck, if things keep going the way they are, within a few months the Australian dollar will be trading at par. There's talk of Canada hitting $1.50 US over the medium term, because Canadian dollars are a petro-currency, and the bad lending practices of the US, and to a lesser extent England ("ninja" mortgages, no-doc and stated income mortgages, etc.) never caught on in Canada and many other countries.
Slashdot Mirror
> "Do you realise that everything you save would be more than offset by the additional energy required to fight off gravity?"
Congress already has an answer to that - they'll repeal the law of gravity, just like Indiana tried to make pi equal to 3.2 in 1897.
"Do you realize how much money spent on infrastructure (highways) would be saved if we could get cars EVEN A FEW INCHES above the surface?"
Do you realize how much MORE money spent on infrastructure can be saved by switching to the even smaller "Microsoft Flying Chair"?
Its not like it even costs anything - just say the magic word (Google) and they'll throw one your way.
I hear it gets 40fpbt (feet per balmer-toss).
> > "This is fascism."
> "No, this is a state sponsored invasion of privacy of orwellian scope."
No, this is a signal to invest in hard drive and tape storage manufacturers and distributors! To teh MOON!
>"When you consider the efficiency gains and TCO when you migrate to MS and the entire .NET framework, Microsoft practically *is* paying you to use Windows."
So I guess that by using only linux both at home and the office means I'm "practically" supporting Microsoft financially???
Actually, in a way I guess I am, since otherwise I'd switch to a Mac, and then everyone else would have iEnvy(TM) and consider switching too. And we all know, "once you go mac, you never go back."
SELECT * WHERE (color NOT 'white') AND (pol_aff NOT 'GOP') OR (pac_funding < 100000);
Ever since the Lockheed bribery scandal, its been illegal for US citizens or corporations to bribe anyone, anywhere in the world, same as its illegal for them to engage in pedophilia abroad.
So, how much $$$ (campaign contributions - the only "legal" bribe) Microsoft is going to spend to "make this go away"?
Elections are coming up in a year ...
> "Well, at least I'm Canadian."
So you have to stick your 2.1 cents in :-) Maybe they should be lobbying Canadians - more "buck for the bang".
"Because people who grew up having to make their own food from scratch are going to suddenly stop doing that and start buying the Kraft brand."
And how many people who are just trying to eat healthier and get a bit of variety in their diet are they going to snag?
Or who go there because its convenient to rent a movie (a lot of these places rent movies, etc).
Harry Truman is the only person it could have applied to. "during the term within which this article becomes operative" waa during Truman's term. No other president, past or future, is covered by that clause.
China is sending out all the signals, and the markets are reacting. So much for your "facts be damned". Must be hard to take, the capitalists beholden to "dirty pinko commies". Just one of todays' headlines ...
Of course, you could have read this yesterday
Wanna bet they discover that maple syrup or Canadian back bacon cures cancer?
"What a crock of shit. Iran may be run by religious nuts ..."
"What a crock of shit. The US may be run by religious nuts ..."
A real PKB situation if there ever was one ...
You forgot the rest of the sentence ...
"during the term within which this article becomes operative from holding the office of President or acting as President during the remainder of such term."
The second amendment became operative in 1947. I think Harry Truman is safely dead.
If China just stops buying US T-Bills, what are you going to do - force them to? Remember, the US has an $800 billion a year trade deficit, and China is the #1 creditor. They announced today that they are diversifying their holdings of reserve currencies. That was enough to send the dollar down ... again.
The US banking system was involved in a huge ponzi scheme, selling bad debt to investors all over the world, and now people don't trust the US, especially with the federal reserve lowering interest rates and flooding the markets with more "funny money." Why should anyone buy USD when:
- the interest paid is lower than anywhere else
- any interest earned is more than wiped out by the dollar's depreciating value
- the US hasn't gotten control of its public debt (example: look at California facing another ratings downgrade)
- US consumers are maxed out
- US banks have flooded the world markets with "toxic waste" - investments that were rated AAA that are really just junk
The trust in the US administration, the Federal Reserve, the US banking system, the bond raters, US equities, etc., is gone. Its going to take a decade of "good behavior", and lots of painful adjustments, to change that. In the meantime, a lot of people are going to lose their homes, their jobs, their big-screen TVs, their life savings, and they are going to be VERY angry. And those who didn't take part in the foolish speculative bubble are NOT going to want to see their money go to bailing out people who they see, by and large, as getting what they deserve (if you got a mortgage by lying on the application, losing your home is a "just" punishment; you're lucky not to be going to jail for fraud).The problem with your scenario is that the banks can't "forgive" the debt, for 3 reasons:
Simply put, the "game" has changed. Nobody believes the US is a credible invading force any more, in the sense of being able to keep whatever the US goes after. Iraq is another Viet Nam, just as Afghanistan was the USSR's Viet Nam.
"We should all pray that all the financial doomsayers and USA haters are wrong, because if the US is destabilized financially, the whole world will suffer, and we could all end up in a world war."
The US is already destabilized financially. Look at the federal deficit, the accumulated debt, the 16 million vacant homes, the 2 million homes that are expected to go into foreclosure over the next 2 years, the latest 39 billion dollar loss GM took in the most recent quarter, the tanking dollar, the inflation of stuff that people need on a daily basis (food, energy, mortgage payments) that isn't included in the "Core Consumer Price Index", the record increase of people using their credit cards to pay their mortgages and day-to-day living expenses ...
There are a couple of trillion dollars of "false gains" that have to be removed from the US economy. That's going to be painful, just like any other hangover. Party's over. Unfortunately, we're all going to pay the price for the US's fake "economic gains" in the last 5 years, but a war? Not going to happen. You don't have the money to pay for your current war effort, never mind another one.
"To use the current real estate market as an example, there is a good chance that banks will forgive debt to avoid foreclosures and keep those monthly payments coming in
Actually, they haven't got much choice - unless the actual holders of the CDOs (Collateralized Debt Offerings) agree to restructure the payments, the loan administrator HAS to foreclose. The banks that originated the mortgages have no say - they repackaged the mortgages as SIVs (Structured Investment Vehicles). Now that widespread fraud is being uncovered, the banks are having to make good or face lawsuits - and (1) they haven't got the liquidity margins, (2) they didn't hedge them enough. and (3) some of the companies that offered the hedges are themselves facing bankruptcy if too many of their bets go the wrong way - and it looks like that's happening.
Again today, China said they want to diversify away from US dollars. Look at what happened. The US dollar lost another 2% against other currencies.
Nobody wants to be the ultimate bag-holder, so you can expect to see the US dollar continue to drift lower - probably another 10%-20% in the near term, and 50% over the next decade, as the reality of being unable to continually roll over the federal deficit and debt in the face of world-wide rising interest rates kicks in ...
"As far as China buying a US bank, they better watch their pockets! The US financial markets are considered a strategic asset, and anyway the establishment firms won't even let young American firms into the inner circle."
Citi is already bordering on insolvency. The other banks are also caught with their ass(et)s exposed. Who has the money to bail them out? The feds? Nope - they're broke too. Plus, why should voters be stuck paying for other people's irresponsibility.
Let the market work it out. What that means is that 2 million people have to lose their homes to foreclosure (but they shouldn't have been in those homes in the first place, and wouldn't have been, if they hadn't played "the game", with a large number of them engaged in outright fraud). It also means let the international markets work it out - which means a shift away from the USD, a decline in individual incomes, and a transfer of assets to foreigners who step in to pick up the pieces. This is nothing new - foreigners already control more than 50% of the US economic engine.
China has stated publicly as long ago as 2005 that they wanted to move away from the USD. Here's one source from January 2006 http://www.washingtonpost.com/wp-dyn/content/article/2006/01/09/AR2006010901042_pf.html
Sure, they can't do it too quickly without hurting themselves - but if they do it right, they can end up owning a huge chunk of the US. Flood the market with USD, and when the banks crash, buy them.
>"It's erroneous to believe that China would willingly walk away as the US economy tanked... that is, until their domestic market makes our market seem like a drop in the bucket. I give it at least three generations, probably more, until the Chinese middle class has developed enough."
Read this: http://www2.goldmansachs.com/insight/research/reports/99.pdf
Your 3 generations is actually less than 1 generation. By 2039, the US economy will be smaller than China. India will be right behind the US. Also, the report goes on to say that they expect other curencies to appreciate by up to 300% against the USD - a polite way of saying that the dollar is expected to shrink in value by 2/3. This was BEFORE the current financial crisis.
Nasty stuff.
And if your country owes foreigners trillions, no longer wants to extend you more credit, and you're broke, that's the banks' opportunity to p0wn all your a$$ets.
Watch for US bank failures, and China making a move to buy at least one major bank.
China doesn't have to "go to war" - just dump a trillion bucks in USD on the currency market, and buy a basket of Euros, British pounds, Australian and Canadian dollars, The Euro would immediately go to over $2, etc. This means that the US would be paying close to $150 per barrel of oil, since the US would now have to pay with a "hard" currency.
It would be over in a matter of hours, without a shot being fired.
They could then swoop in with the other trillion they have stashed away and buy up banks, etc., at pennies on the dollar.
Its not like the fed can do anything by printing even more money ... they're already doing that, and debasing the USD without China's help.
"so the dollar will remain strong, and perhaps increase, due to having less debt, and the prospect of a large-scale war, which always leads to an economic boom."
The USD is already the "sick man", and the US no longer has the capability to finance wars. Just look at your current deficit, and your accumulated debt, and the ongoing crisis in the banking system. The only way out is for the government to devalue the dollar at a quick enough pace so that those trillions of debt aren't worth all that much - which is what the government is doing. Unfortunately, rapid devaluation also has the side effect of making your currency less appealing over the long term, which is also happening.
That's the new reality. The US consumer is basically broke, having spent more than 100% of income over the last few years. This christmas will probably be the last half-decent retail season, as a LOT of people have already turned to using their credit cards to help meet their mortgage payments. Bank failures are coming.
Actually, once less than 50% of all producing assets were owned by Americans (and that happened last year or the year before, iirc, while nobody was looking), even if the US were to become an exporting nation again, the majority of the profits wouldn't stay in the US, so China has a lot to gain by nuking the US dollar. Nuke it, then go in and buy up even more assets at firesale prices.
They could easily pull the reverse of the Hunt brother's attempt to corner the silver market.
Also, the US is unable to compete in many export market areas because the means of production were shipped overseas. How is the US going to export TVs, DVDs, laptops, LCDs, ... no manufacturing plants domestically. Same with a lot of the steel plants that were shipped out in the '80s, and supertankers, etc. So, to export, the US would have to rebuild manufacturing capacity, in competition with plants that are already paid for. Where would the funds come from? Foreign investors ... since they have the cash, further increasing the amount of profits shipped out of the country.
YOur reserve does not come from precious metals. The USD is a fiat currency, and is currently being undermined by your government, and the speculative housing bubble bust. If you think oil at $96 a barrel is high, wait until it hits $200 US, as the US dollar continues its decline against all the other currencies in the world.
You can't keep running a "War on Terror" if you're broke. The US is dependent upon foreign lenders. And like the old saying goes, the debtor is slave to the lender.
China - on track to beat last year's 232 billion dollar deficit.
Japan - another 80 or 90 billion
OPEC - add 110 billion this year (or more likely 130 billion)
Oh, what the heck - lets just do the WHOLE DARNED WORLD Another $800 Billion Dollar trade deficit this year. The US consumer's credit card is maxed out.
Last stats I saw were net ouflows of $69 billion in one month. That's a lot of investment "pulling up stakes."
If push comes to shove, why should China not use all the levers it has - including the "dump the dollar" nuke option - if the US keeps acting stupid wrt either currency or politics?
BTW - the US economy has had real double-digit inflation for the last 5 years. Taking the three things that people actually spend money on all the time - food, energy, and mortgages - out of the index is just as bad as the ratings fiascos by Moodies and S & P, et., The rest of the world doesn't want US financial paper - not until they know the REAL value of the underlying assets. Do YOU believe Citibank is solvent? How can you know for sure, when nobody knows just how over-valued everything still is. With 1 out of 8 homeowners facing foreclosure over the next 3 years, you're looking at 2012 before there's a real recovery, if then. The chance of a Japan-style ding to the economy is real. The next 5 years are going to be painful for the whole world, but the weight of the USD in the reserve basket of currencies of most nations is going to be lightened as quickly as they can w/o causing the dollar to crash completely.
Heck, if things keep going the way they are, within a few months the Australian dollar will be trading at par. There's talk of Canada hitting $1.50 US over the medium term, because Canadian dollars are a petro-currency, and the bad lending practices of the US, and to a lesser extent England ("ninja" mortgages, no-doc and stated income mortgages, etc.) never caught on in Canada and many other countries.