On Thu, 25 Nov 2004 21:11:42 -0700, "John P. Mullen" <jomullen@zianet.com>
wrote:

>MacHamish wrote:
>> On Thu, 25 Nov 2004 10:49:24 -0700, "John P. Mullen" <jomullen@zianet.com>
>> wrote:
>> 
>> 
>>>MacHamish wrote:
>>>
>>>
>>>>On Tue, 23 Nov 2004 19:15:06 -0700, "John P. Mullen" <jomullen@zianet.com>
>>>>wrote:
>>>>
>>>>
>>>>
>>>>>Rykk wrote:
>>>>>
>>>>>
>>>>>>>in article 41a29357$0$24335$a8266bb1@news.titannews.com, Ian Smith at
>>>>>>>ianinhoose@btinternet.naespam.com wrote on 11/23/04 10:47 AM:
>>>>>>
>>>>>>
>>>>>>>> The entire world (the other 94%) doesn't have to use dollars, and
>>>>>>>>it certainly wouldn't be the end if the dollar collapsed. The people
>>>>>>>>of America should realise this. However, I'm not anti-American, and I
>>>>>>>>continue to buy their products/services. They have achieved much, and
>>>>>>>>many can learn from them. It doesn't make them perfect, though. The
>>>>>>>>question is, can they/are they willing to learn from the rest of the
>>>>>>>>world?
>>>>>>
>>>>>>
>>>>>>As I said.  Many countries currencies are Pegged to the dollar.  That 
>>>>>>means for every point the dollar goes up or down, that countries 
>>>>>>currency goes up or down automatically by the ratio they pegged thier 
>>>>>>currency at.
>>>>>>
>>>>>>If you don't think a depression in the US will lead to a depression 
>>>>>>everywhere else.  Read more history.
>>>>>>
>>>>>>The US is a significant percentage of the World Economy.  Other 
>>>>>>countries with large Economies, Such as Japan have a significant amount 
>>>>>>of their economy invested in the US.  Hurting the US hurts these 
>>>>>>countries.  Ruining the US economy won't be be the end of the world.  
>>>>>>But then again.  Neither is drinking from the toilet.  You just won't 
>>>>>>feel very good afterward.
>>>>>>
>>>>>>Rykk
>>>>>
>>>>>
>>>>>Interesting theory, but no relation to facts.
>>>>>
>>>>>Here are some facts
>>>>>
>>>>>http://www.x-rates.com/d/EUR/USD/graph120.html
>>>>>
>>>>>It seems like nobody tracks to the USD.  It also seems the USD is 
>>>>>falling with respect to most currencies.
>>>>>
>>>>>John Mullen
>>>>
>>>>
>>>>Chinese Yuan.
>>>>
>>>>http://www.x-rates.com/d/CNY/USD/graph120.html
>>>>
>>>>MacHamish M$(D??(Br
>>>
>>>The need to adjust the Chinese Yuan exchange rate
>>>
>>>http://english.epochtimes.com/news/4-11-4/24165.html
>> 
>> 
>> Yes.  So?  This article proves your statement above wrong.  There is at
>> least one other currency that tracks the USD.
>> 
>> How about the Qatari Rial
>> http://www.x-rates.com/d/QAR/USD/graph120.html
>> The Omani Rial
>> http://www.x-rates.com/d/OMR/USD/graph120.html
>> The Saudi Riyal
>> http://www.x-rates.com/d/SAR/USD/graph120.html
>> 
>> ISTM, those flat graphs indicate that the currencies are pegged to (track)
>> the US Dollar.
>> 
>> QED.
>> 
>> 
>> MacHamish M$(D??(Br
>
>
>Big whoop.
>
>The dollar going crosswise with the Euro is something to worry about.

I absolutely agree.  The question is, who should worry more, USAians or
EUians? 

>The countries that have pegged currencies, except for China, would have 
>no power to stabilize the USD and, as I pointed out above, China may 
>unpeg soon.

China may unpeg soon under heavy pressure from the IMF and the major
countries' central banks.  They'll resist it as long as possible because the
declining dollar benefits China by making its exports more competitive.

Certain countries whose currencies aren't pegged to the dollar have the
biggest problem.  Their exports to the USA become more expensive in the
world's biggest market, a market they've come to depend on for their
prosperity.  That's why countries like Japan and South Korea have been
intervening in the currency markets to stem the dollar's decline.  This has
happened before.  It never works over the longer term, and it obviously
isn't working now.  Intervention distorts the free market.  The "invisible
hand" will give them all a good slap before it's over.

The fact is, the US can't continue to run the massive current account
deficits of the past few years.  $50 billion + per month simply isn't
sustainable.  There has to be an adjustment.

>You argued that the countries with pegged currencies would take action 
>to keep the USD up, but there is no reason to expect such a thing. 

No, I didn't.  That was Rykk, I believe.  He's right where China is
concerned.  China, along with other major exporting countries, has been
buying US dollars to slow the decline.  It's a two edged sword, you see.  A
lower dollar is good for China in competitive terms, but it's bad for China
in that it devalues their holdings in US assets.  What the whole world wants
and needs is stability in the currency markets, even if it means a lower
USD.

>Those countries currently pegging their own currency against the USD 
>will either find a more stable currency or go along for the ride.

That's brilliant.  All you're saying is that they'll either stay as they are
or do something different.

>You certainly provided no credible evidence to support your claim.

I made no claim.  All I did was point out that the Chinese Yuan and a few
other currencies are pegged to the US Dollar, contrary to your claim that,
"It seems like nobody tracks to the USD".

I will make this claim, though.  Before this is over, there is likely to be
a round of trade protectionism bigger than ever before.  Trade wars
sometimes lead to shooting wars.  That's the scary bit.  

MacHamish M$(D??(Br