The Canadian Dollar

[Demosthenes]

The Canadian dollar is higher than it has been in 30 years. The US dollar is falling steadily.

1977 was the last time this was the case. At the same time, the Socialist world had a very interesting year. Russia signed many treaties, and the Revolutionary Mao Era in China was ending.

Is this likely to happen again, or are the two unrelated?

[ckaihatsu]

Yeah, you're seeing it too.... I just addressed this on a Meetup board -- I'm calling it 'Vietnam Lite' -- please see:


"Re: [9-11-340] Rahm Emanuel interaction"
http://9-11.meetup.com/340/messages/1421122/


Chris

[ckaihatsu]

Also, besides the post-Vietnam similarity, notice the parallel between the rise of OPEC then and the rise of Iran now....


Iran declares victory after U.S. report

http://uk.reuters.com/article/topNews/idUKL0458777920071206


US intelligence report shows war drive against Iran based on lies

http://wsws.org/articles/2007/dec2007/nie-d05.shtml

[fire_mat99]

What does Vietnam have to do with the high Canadian dollar and low US dollar ?

[Demosthenes]

Vietnam was ending at the same time the american dollar was low and canada's was high, i beleive

[fire_mat99]

Ya but I don't think Canada never was this high ever!!

[ckaihatsu]

Historically Canada's economy has always been much smaller in volume, and less varied, than the U.S. economy. It's usually been a boutique economy, an adjunct to the U.S. -- remember the term "America's suburb" -- ?

Historically the U.S. has enjoyed a strong dollar (monetarism), but that hegemony requires being on top economically and militarily. The payoff is that the entire world must convert their goods and services into that currency, at that premium rate. An analogy is that it's like being able to pay for goods and services abroad by simply writing checks that will never be cashed. Another way to think of it is that it is like owning a video game arcade and everyone has to exchange their money for your tokens, or else they don't play. Those strong-dollar days are long gone for the U.S....

The cost of aggressive, imperialist wars like Vietnam and Iraq take their toll on the country's currency if they fail to provide returns (winning market share against China and Iran, respectively) -- imagine having to put up a bet for each turn that you move a piece in a game of chess or Risk

A weaker currency can help exports in the short term, but it comes at the cost of being in a more colonial-type position....


Chris



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[fire_mat99]

Historically Canada's economy has always been much smaller in volume, and less varied, than the U.S. economy. It's usually been a boutique economy, an adjunct to the U.S. -- remember the term "America's suburb" -- ?

So the economy in Canada is smaller and more specialized..One thing in Canada most stores and factories are own by a US capitalist .

Historically the U.S. has enjoyed a strong dollar (monetarism), but that hegemony requires being on top economically and militarily. The payoff is that the entire world must convert their goods and services into that currency, at that premium rate. An analogy is that it's like being able to pay for goods and services abroad by simply writing checks that will never be cashed. Another way to think of it is that it is like owning a video game arcade and everyone has to exchange their money for your tokens, or else they don't play. Those strong-dollar days are long gone for the U.S....

But if other countries pay for goods and services is that not more money going into the US? And if other countries give the US lots of money is that not good for the economy ?

I thought China give lots of money to the US?

[ckaihatsu]

But if other countries pay for goods and services is that not more money going into the US? And if other countries give the US lots of money is that not good for the economy ?

I thought China give lots of money to the US?

Of course any time that an entity pays for your goods and services, at prices favorable to you, you will be on the path to increased wealth.

Currently the U.S. economy is running on deficit spending. Already major banking concerns have had to sell off significant portions of their ownership to foreign interests, in order to forestall insolvency. China has been gaining in this area the way Europe has been since the post-WWII Marshall Plan.

I find that the First World - Second World - Third World framework is useful for keeping track of where countries' economies stand in the global context. Countries that are late to capitalist development find that they do not have much to leverage, and so they get stuck having to sell off natural resources and unskilled labor at bargain-basement prices. This would be a Third World type of economy.

Second World would be where a colony has managed to obtain enough market share to enable it to produce goods and services for foreign (global) markets. The early U.S. would be a good example of this.

First World countries have reached the stage at which they can finance military campaigns abroad so as to subjugate the people and governments of foreign countries. In this way they can obtain hegemony over the terms of that country's economy by dominating its financial arrangements. This is how the U.S. dollar has operated historically, though that's now waning. Worse yet for the U.S. is that up-and-coming manufacturing giants like China are easily picking up the slack, so that a fallback to a manufacturing-based economy may not be an option either. We may be seeing a slight reinvigoration of U.S. domestic industries and markets, but I doubt this could be self-sustaining, especially with such a debt and balance of trade overhang.

The entire process of capitalist globalization is at risk here, and hopefully its crisis and decay will open up opportunities for mass-based, socialist-minded struggle against many corrupt regimes throughout the world.


Chris

[fire_mat99]

Of course any time that an entity pays for your goods and services, at prices favorable to you, you will be on the path to increased wealth.

So should the US not be getting rich then? If other countries have to give lots of money to the US should the US not be getting rich?

Why is there a US deficit ?? too much money going to other countries or money going to bad projects?

In this way they can obtain hegemony over the terms of that country's economy by dominating its financial arrangements

Can you elaborate here?

[ckaihatsu]

So should the US not be getting rich then? If other countries have to give lots of money to the US should the US not be getting rich?

Why is there a US deficit ?? too much money going to other countries or money going to bad projects?

fire_mat99,

Countries (or any entities) do not just *give* money to other countries and entities -- at least not much, if you're talking about donations or aid or whatever.

Money is exchanged for goods and services, so there's a real, two-way exchange going on in every transaction. If a country (or any entity) cannot afford to make an immediate payment for the goods and services rendered then it must rely on debt which incurs finance charges. I did a search and found a helpful graph that shows the total debt market as a percentage of U.S. GDP. It's at this link:

TOTAL CREDIT MARKET DEBT (ALL SECTORS) AS % OF U.S. GDP

http://photos18.flickr.com/24012562_68e2121a3d.jpg

Can you elaborate here?

I'm going to rely on the video-game-arcade analogy here again. If you have something -- let's say oil or video games -- that is in large demand, then you will be able to call the shots. If you take over a video game arcade with military force then you can be the one to set the exchange rate of money for tokens. If yours is the only arcade in town and everyone has nothing much better to do for entertainment, then there will be high demand and you can set the exchange rate so that your customers only get 4 tokens per dollar, and maybe only 1 game play per token. Or maybe you can set it so that it takes 2 or 3 tokens for one game play. You get the idea. It's the same for anything else.

In the case of the U.S. economy, the U.S. is highly dependent on oil for energy. It cannot meet its own needs for oil with its own domestic supply, and so it has to purchase foreign reserves. If the U.S. economy is strong and U.S. businesses are making large profits, then energy costs are not such a big deal. When things slow down, however, as is happening now, then the energy costs are "exposed", meaning that they take up a larger percentage of spending than they used to.

I picked through a page from Wikipedia and excerpted the parts that deal with recent economic history. Hope it helps -- take care, happy new year everyone!


Chris

http://en.wikipedia.org/wiki/History_of_the_United_States_%28since_1988%29

[...]

The Persian Gulf War

    Main article: Persian Gulf War

The considerable dependence of the industrialized world on oil, with much of the proved oil reserves situated in Middle Eastern countries, became evident to the U.S., first in the aftermath of the 1973 world oil shock and later in the second energy crisis of 1979. Although in real terms oil prices fell back to pre-1973 levels through the 1980s, resulting in a windfall for the oil-consuming nations (especially North America, Western Europe, and Japan), the vast reserves of the leading Middle East producers guaranteed the region its strategic importance. By the early 1990s the politics of oil still proved as hazardous as it did in the early 1970s.

[...]

By the end of [Clinton's] administration, the federal government had experienced the country's longest economic expansion and produced a budget surplus. The first year of the budget surplus was also the first year since 1969 in which the federal government did not borrow from the Social Security and Medicare Trust Funds for the first time since Neil Armstrong walked on the Moon.

[...]

Globalization and the "new economy"

Clinton's terms in office will be remembered for the nation's domestic focus during this period. The six years span of 1994 through 2000 witnessed the emergence of what many commentators called a technology-driven "new economy," and relatively high increases in real output, low inflation rates, and a drop in unemployment to below five percent. The Internet and related technologies made their first broad penetrations into the economy, prompting a Wall Street technology-driven bubble, which Federal Reserve chairman Alan Greenspan described in 1996 as "irrational exuberance".

After the dissolution of the Soviet Union in 1991, the United States was the world's dominant military power and Japan, sometimes seen as the largest economic rival to the U.S., was caught in a period of stagnation. China was emerging as the U.S.'s foremost trading competitor in more and more areas.

[...]

The first eight months of his term in office were relatively uneventful; however, it had become clear by that time that the economic boom of the late 1990s was at an end. The year 2001 was plagued by a nine-month recession, witnessing the end of the boom psychology and performance, with output increasing only 0.3% and unemployment and business failures rising substantially. President Bush approved a large federal tax cut with the intent of revitalizing the economy.

[...]

In 2002, the GDP growth rate rose to 2.8%. A major short-term problem in the first half of 2002 was a sharp decline in the stock market, fueled in part by the exposure of dubious accounting practices in some major corporations. Another was unemployment, which experienced the longest period of monthly increase since the Great Depression. The robustness of the market, combined with the unemployment rate, led some economists and politicians to refer to the situation as a "jobless recovery." Nevertheless, the United States between 2003-2005 has made a significant economic recovery from the post 9/11 recession.

[...]

[fire_mat99]

Countries (or any entities) do not just *give* money to other countries and entities -- at least not much, if you're talking about donations or aid or whatever.

Money is exchanged for goods and services, so there's a real, two-way exchange going on in every transaction. If a country (or any entity) cannot afford to make an immediate payment for the goods and services rendered then it must rely on debt which incurs finance charges. I did a search and found a helpful graph that shows the total debt market as a percentage of U.S. GDP. It's at this link

:

The US economy is very slow now and may go into a other great depression like the 30's.The Markets are going down and US government is in the hole up in the trillion of dept.And it is true money is used for exchanged for goods and services and the money goes to the capitalists and elite.

But there is  one problem here of what you are saying if this is the case money should be leaving the US mot going to the US .In other words US capitalists and government should be in dept over goods and services and other countries should hold the dept.In other words the  US capitalists and government don't have money and just print money or say okay country xx I will pay xx money over xx years for goods and services .

So the other countries should hold the dept and if one day they all called the US dept well say goodbye to the US economy it be worse than the great depression .

[fire_mat99]

ckaihatsu I will see if I can give you a other example has you do not seem to understand..

[ckaihatsu]

Bourgeois economic analysts are alreaady saying that this current downturn -- really a crisis of central bank solvency -- will dwarf the Great Depression. I would add that the bourgeoisie doesn't really have anything else left to sell to the rest of us. Worse, sections of capital are now left to bicker over energy supplies, an issue that would normally not be an issue if the plutocrats had real momentum going for them in other, *productive* sectors of the ecconomy.

In the past the capitalists, through control of the major industries of a country's economy, could bequeath or deny benefits on the public, depending on the political balance of forces between the proletariat and the bosses. In eras of nationalization, industrialization, modernization, standardization, and digitization the ruling elite could incrementally parcel out these developments based on kickbacks and loyalty, or patronage.

Now that there's nothing left that is critical to the further development of civilization, the rulers' system is peeled back to reveal the remaining surplus value at stake: energy reserves.

However you want to slice it among nations, bookkeeping-wise, the fact remains that it's difficult to make whores of people if there's nothing to pimp. Capital, out of desperation for places to go, made a bubble out of digitization -- the dot-com boom and bust. Then they plowed into housing, historically a non-speculative sector and a refuge of last resort -- today it's rampant speculation in energy (State of California, Enron), housing, food, and carbon credits.

Politically any scheme will do if it can enrapture and direct the populace, but if prospective investors are supposed to get excited about bottom-of-the-barrel, junk investments, then you can see for yourself how Wall Street got into the mess it's in now.

Producers in countries like China, Taiwan, Hong Kong, India, Pakistan, and so on, are dependent on there being markets (profit margins) to sell to. If U.S. and European consumers can not only not afford to sustain consumer spending, but also can't sustain debt financing, then the whole jig is up and champions of capitalism will have to admit that they got nothing left.

While the global imperialist, capitalist world order is hitting a wall, I think it's important to juxtapose our own, worker-based solutions into the resulting political vacuum so that we don't fall into the excruciating pattern of oscillations between local, despotic control and global schemes of world order over and over again.


Chris





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Photoillustrations, Political Diagrams by Chris Kaihatsu
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MySpace:
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[fire_mat99]

Bourgeois economic analysts are alreaady saying that this current downturn -- really a crisis of central bank solvency -- will dwarf the Great Depression. I would add that the bourgeoisie doesn't really have anything else left to sell to the rest of us. Worse, sections of capital are now left to bicker over energy supplies, an issue that would normally not be an issue if the plutocrats had real momentum going for them in other, *productive* sectors of the ecconomy.

In the past the capitalists, through control of the major industries of a country's economy, could bequeath or deny benefits on the public, depending on the political balance of forces between the proletariat and the bosses. In eras of nationalization, industrialization, modernization, standardization, and digitization the ruling elite could incrementally parcel out these developments based on kickbacks and loyalty, or patronage.

Now that there's nothing left that is critical to the further development of civilization, the rulers' system is peeled back to reveal the remaining surplus value at stake: energy reserves.

However you want to slice it among nations, bookkeeping-wise, the fact remains that it's difficult to make whores of people if there's nothing to pimp. Capital, out of desperation for places to go, made a bubble out of digitization -- the dot-com boom and bust. Then they plowed into housing, historically a non-speculative sector and a refuge of last resort -- today it's rampant speculation in energy (State of California, Enron), housing, food, and carbon credits.

Politically any scheme will do if it can enrapture and direct the populace, but if prospective investors are supposed to get excited about bottom-of-the-barrel, junk investments, then you can see for yourself how Wall Street got into the mess it's in now.

Producers in countries like China, Taiwan, Hong Kong, India, Pakistan, and so on, are dependent on there being markets (profit margins) to sell to. If U.S. and European consumers can not only not afford to sustain consumer spending, but also can't sustain debt financing, then the whole jig is up and champions of capitalism will have to admit that they got nothing left.

While the global imperialist, capitalist world order is hitting a wall, I think it's important to juxtapose our own, worker-based solutions into the resulting political vacuum so that we don't fall into the excruciating pattern of oscillations between local, despotic control and global schemes of world order over and over again.

If this is a reply to my post above I really do not understand your grammar ..Can you or some ome translate it to a grade 7 level of grammar ?