FALLOUT OF RADIATION EXPECTED TO REACH WEST COAST OF THE U.S.???????

[dbucfan]

I can see it getting to the point when mortgages will be paid to the Federal Reserve. So.......how bout that radiation folks? Anything to worry about?

Obama said no worries - so be worried - given his history of being accurate

[Vatican_Assassin]

Usually when they tell you not to panic, thats when usually you should panic. Its just like if there was Comet headed towards the Earth, they wouldn't tell you, while in the mean time they get in their underground bunkers and let us all burn. That's unless you you have a guy like Morgan, who fully trust what the government tells him. He is such a good citizen, an Orwellian like citizen who would probably turn friends and family members in if he hears them speak out against the govt. in an Orwellian like society were moving towards.

[Chief Joseph]

Yes, "they" are behind everything.

[John Galt?]

Well, I see all this radiation fallout as a good thing. All our CFL light bulbs will glow without electricity, so we'll use even less electric which means less greenhouse gasses, which is good for the environment.

Also, the rads will kill some of the Salmonella on chickens so we won't have to cook them as long. Again saving fuel.

The giant mutant insect will stop eating crops (and begin eating people instead) so less pesticides.

we now have a use for all those lead-painted Chinese toys, stack them in the windows as radiation shields.

There should be a boom in some industries like gas mask producers, giant insect wranglers, rad tag makers, and iodine infused sports drinks.

i guess I'm just the type of guy that see the glass as half full.............and glowing

[sg1977nc]

There is a lot of crazy talk here:

1) Exchange rates do not impact the US Treasury's ability to repay Tbills (the only way we borrow money), because they are denominated in USD not foreign currency.

2) A Weak USD would reduce demand for commodity type goods produced in China if  A) there are substitutes in the US, B) China does not print more money so that a weak USD does not reduce their trade surplus

Here is how a weak dollar helps:

Example 1:  A hospital in australia is thinking of buying high tech / expensive medical diagnostic equipment produced in the US, Japan, and Germany.  A weaker USD means australia is more likely to buy the good from the US company.

Example 2: A US engineer that makes 100K per year is thinking of taking his family on a vacation to Hawaii, Florida, Tahiti, Australia, or France.  The weak US dollar means that it is a lot more expensive to go overseas, and they are much more likely to stay in the US.

Example 3: A US BioTech company that is thinking opening up a research facility is less likely to do it in a foreign country where the exchange rate is unfavorable.  Instead they may choose to hire US workers.

End of story.  Turn off fox news you bunch of paranoid **CENSORED**rs and start reading some econ books. 

[John Galt?]

There is a lot of crazy talk here:

1) Exchange rates do not impact the US Treasury's ability to repay Tbills (the only way we borrow money), because they are denominated in USD not foreign currency.

Technically correct, but exchange rates do affect the overall debt, particularly the debt rollover. The Treasury issues debt in 3 forms, T-Bills (<1 year term), T-Notes (1-5 years) and T-bonds (mostly 20 year). The Treasury has to issue new T-Bills, Notes, and Bonds, constantly to pay off the older ones that are due. The new debt is issued, at auction, with a fixed rate but at a bid price, IOW a $10,000 one year note with a 2% rate may only sell for $9600.

Now the exchange rate comes into play as foreign banks and investors buy Treasuries on the secondary market (not from the Treasury, but on the Exchange), if the value of the dollar drops, the ROI for the foreign investor also drops so they are more inclined to not buy Treasuries, lowering demand on the 2ndary market and raising Yields/interest rates. Since the issue of new securities by the Treasury has to compete with the existing securities, a low dollar causes the New Issues to sell cheaper, have a higher effective interest rate, which means the Treasury has to issue MORE DEBT to cover the existing debt.  If $1 billion in 1 year notes is coming due in May and the Treasury can only sell new notes for $0.869/$1.00 or 15%, they have to issue $1.150 Billion in new T-Notes increasing the debt by $150,000,000.

So in the long run, a weak dollar leads to less investment in US bonds, Bills, and Notes, which leads to higher interest rates, which means more debt has to be issued to service the existing debt. And more existing debt = harder to pay off.

[sg1977nc]

There is a lot of crazy talk here:

1) Exchange rates do not impact the US Treasury's ability to repay Tbills (the only way we borrow money), because they are denominated in USD not foreign currency.

Technically correct, but exchange rates do affect the overall debt, particularly the debt rollover. The Treasury issues debt in 3 forms, T-Bills (<1 year term), T-Notes (1-5 years) and T-bonds (mostly 20 year). The Treasury has to issue new T-Bills, Notes, and Bonds, constantly to pay off the older ones that are due. The new debt is issued, at auction, with a fixed rate but at a bid price, IOW a $10,000 one year note with a 2% rate may only sell for $9600.

Now the exchange rate comes into play as foreign banks and investors buy Treasuries on the secondary market (not from the Treasury, but on the Exchange), if the value of the dollar drops, the ROI for the foreign investor also drops so they are more inclined to not buy Treasuries, lowering demand on the 2ndary market and raising Yields/interest rates. Since the issue of new securities by the Treasury has to compete with the existing securities, a low dollar causes the New Issues to sell cheaper, have a higher effective interest rate, which means the Treasury has to issue MORE DEBT to cover the existing debt.  If $1 billion in 1 year notes is coming due in May and the Treasury can only sell new notes for $0.869/$1.00 or 15%, they have to issue $1.150 Billion in new T-Notes increasing the debt by $150,000,000.

So in the long run, a weak dollar leads to less investment in US bonds, Bills, and Notes, which leads to higher interest rates, which means more debt has to be issued to service the existing debt. And more existing debt = harder to pay off.

You are oversimplifying this.  The correlation is not direct, because:

1) Most TBills are bought by investors in the US
2) Our biggest foreign creditor, by far is China, and they basically print more money anytime we do so that they maintain their trade surplus.
3) Even a slight increase to the Tbill yield will just mean more debt is purchased by US and Chinese investors.

So the decrease in the value of the USD relative to the Yen, Euro, etc. may result in our having to pay a higher yield, but it will be marginal.

In the grand scheme of things, in a recession this bad, a weak dollar is definately preferable.

[John Galt?]

In the short run, a weak dollar helps a weak economy. But, and this is a big BUT, only if the MS is reduced and the dollar strengthened once the recession is over. A weak dollar for 3-6 months may help, but a terribly weak dollar for years or decades would be bad. Think the late 70's with stagflation and double digit interest rates.

[sg1977nc]

In the short run, a weak dollar helps a weak economy. But, and this is a big BUT, only if the MS is reduced and the dollar strengthened once the recession is over. A weak dollar for 3-6 months may help, but a terribly weak dollar for years or decades would be bad. Think the late 70's with stagflation and double digit interest rates.

Tell that to China...

The big difference between now and then is globalization.  If you can not somehow get affordable goods to market, some other country will....by hook or by crook.

[John Galt?]

In the short run, a weak dollar helps a weak economy. But, and this is a big BUT, only if the MS is reduced and the dollar strengthened once the recession is over. A weak dollar for 3-6 months may help, but a terribly weak dollar for years or decades would be bad. Think the late 70's with stagflation and double digit interest rates.

Tell that to China...

Well, China cheats!

They actually have 2 different currencies, one for the average Chen on the street and one for international trade.

And China's economy is so tightly controlled, it just doesn't compare. The govt. can strictly control all prices, wages, interest rates, money supplies directly.

The big difference between now and then is globalization.  If you can not somehow get affordable goods to market, some other country will....by hook or by crook.

That and a "(somewhat) free market". Hard to win when you play by one set of rules and others make up their own rules on the fly. Like you said "by hook or by crook"

[sg1977nc]

It isn't just that they cheat.  You have to remember that back in the day the looming spectre of the communists seizing or damaging your assets precluded much serious investment anywhere in the developing world   Additionally, back then China did not really want to play ball...they were happy to be shut off from everyone.  After all that changed in the 90s, it was inevitable that there was going to be more investment / growth in the developing world. 


 

[dbucfan]

I can see it getting to the point when mortgages will be paid to the Federal Reserve. So.......how bout that radiation folks? Anything to worry about?

Obama said no worries - so be worried - given his history of being accurate

Oh damnit, I wanted to be wrong on this one...