``The ol' dollar, it's gonna go down.'' - out of Gate's mouth

[donsu]

http://www.bloomberg.com/apps/news?pid=10000103&sid=atQjxQiQeANA&refer=us

Bill Gates, the world's richest person with a net worth of $46.6 billion, is betting against the U.S. dollar.

``I'm short the dollar,'' Gates, chairman of Microsoft Corp., told Charlie Rose in an interview late yesterday at the World Economic Forum in Davos, Switzerland. ``The ol' dollar, it's gonna go down.''

Gates's concern that widening U.S. budget and trade deficits are undermining the dollar was echoed in Davos by policymakers including European Central Bank President Jean-Claude Trichet and German Chancellor Gerhard Schroeder.

-snip-

``It is a bit scary,'' Gates said. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.''
-snip-
-----------------------------------


'brother, can you spare a dime'

[lectrobyte]

1. Well, I don't think you have to be a rocket scientist to figure that one

out. I wouldn't mind to have my 401K in Euros right now, myself.

[wadestock]

6. But who's taking notice that the effect of long term low interest rates...

means there's no one out there in the future that will finance our debt at low interest rates?

If you raise the rates to make these investments attractive....suddenly....you can't afford to make interest payments on the debt.

[lectrobyte]

8. I'm trying to remember something I read somewhere the other

day. Ah yes, it was something like If the Chinese Finance Minister wakes up on the wrong side of the bed one morning, we are in a world of shit.

[merbex]

2. It is the only positive thing in Kerry's loss -

this whole damn mess is owned lock, stock, and barrel by B*

He broke it he gets the blame

[Historic NY]

5. Thats exactly what I say to my Repuke friends........well since you voted

to break it you own it lock, stock & barrel. If they start complaining I rub their noses in it.

[Nay]

16. Exactly what I do. I say, "You bought it, now you get to own it."

[davidwparker]

22. A Repub friend of my mother was complaining tonight

about the amount of taxes he's now paying. I used it as an opportunity to point out the tax cuts cost him. He's working class and votes repug.

I'm all to happy to help link current events to the way one votes. Oh, and he also watches Fox. Can't get enough of O'Really.

[LibertyorDeath]

3. Holy Shit

NT

[cliss]

4. This has incredible implications.

Think about it. Bill Gates' Microsoft empire is located in Seattle, Washington.

Microsoft does business all over the world. And Bill Gates is publicly saying he has no confidence in his own currency.

The Ol dollar is going to go down? From what?

It's already in the toilet.

Some observations:

1. For Gates to be saying this, is alarming. He is very influential. He could start a run on the dollar.

2. What's he going to do? Start taking payments in Euros? Maybe the US should start using Euros. Problem solved.

[lectrobyte]

10. Oh yes. The dollar as a trading currency for oil is part of what props it

up now. Read up on Saddam wanting to trade oil in Euros -- some people think that sealed his fate with the U.S. when that happened.

[bearfan454]

25. When the other OPEC countries switch to the Euro, well

we're fucked. They won't be able to spin that one.

[Warpy]

11. The US can't start taking payment in Euros, but corporations can.

and the multinationals will probably start doing so. The world will convert to the Euro, and it will look like it happened overnight for people who haven't been paying attention.

That is going to mean a great deal of inflation here in the US, I'm afraid, as our dollras simply don't buy goods and services produced offshore for what they used to. In the short term, anyone who is relying on savings or the stock market is going to get killed financially. Wages, as usual, will not keep pace with inflation. After all, they still haven't recovered from the inflation of the 70s.

In the long term, though, it's good news, since it will become nearly as economical and a whole lot more convenient to start producing goods and services for US consumption here in the US.

Imported goods and services should always be more expensive. The dogma of free trade (which was only free for the US corporation) combined with the strong dollar policy has turned that on its head. The system of increasing trade debt simply can't be sustained. Either we needed a falling dollar or we needed protective tariffs. Both would be severely inflationary, especially in the short term, and both would be unpopular.

Hold onto your hats, folks, it's going to be a bumpy decade.

[Canuckistanian]

13. Don't forget higher interest rates

The Fed will probably raise the prime to make investment more attractive to foreign investors. Bad news for home, auto buyers and existing domestic debt loads.

[sweetheart]

15. What can he do?

Bill has enough money to place a neutral hedge. This is basically
a set of options contracts, that allow him to "not lose" dollar wealth
as any decline is offset by increases in the options contracts.
This sort of hedging is costly to set up and monitor, but he has the
resources to do just that. Surely the financial managers at microsoft
do similarly, as it is irresponsible not to. Think of it, in international
sales, you have people you pay in a foreign country, and fixed prices in
that countries currency, but your development and support costs are NOT
in that country... so if the currency of that nation changes radically
to the climate when the agreements were set up, the cost of the operation
could exceed the revenues. In this regard, currency hedging is normally
used around the world to protect businesses from volatility.

[LibertyorDeath]

21. That was one of my first thoughts.

"He could start a run on the dollar."

I expressed it differently

[mountainvue]

29. It Gates threatens to

start taking payments in Euros, will we invade Seattle?

[oneold1-4u]

7. Vacation time in Canada

Get there and bank all exchange in a Canadian Bank if you can.
Go on to Alaska where there is still fish and game! You wont be able to buy gas to get to the food bank or soup kitchens here!

[Nay]

17. I will be doing exactly this in June -- do you think I will be too late?

How fast does anyone expect this to happen? I am assuming that the Chinese cashing in would do the trick, but what are the possible timetables?

I agree that the one thing that will be good is that there will be more actual Americans manufacturing things for Americans.

[Fleshdancer]

9. Some no longer think the dollar is a stable currency

it scared the crap out of me when a Chinese official was quoted as saying the US dollar was no longer stable...what incentive does China have in buying our debt if our dollar isn't seen as stable? I keep hoping my fear is due to my ignorance on how all of this really works, but so far, none of the signs look promising.

[killbotfactory]

12. Reagan proved that defecits don't matter

But what the hell do Bush and Cheney and friends care? They're not going to go down with the rest of us. While the nation gets poorer, the wealthiest americans will get richer.

[anarchy1999]

14. Hi Bill, what's new?

You will keep your billions though, won't you.

"uncharted territory", my ass.

Ever read up on any history?

[Mabel Dodge]

18. What really pisses me off is that ...

Gates not only voted Republican, but contributed heavily to Bush's campaign.

[ClassicDem]

19. A lowered value Dollar actually benefits Bill Gates

I am sure he is as happy as a clam to see it drop in value.

[GetTheRightVote]

20. I am afraid now if Gates is coming out against the dollar

I am going to pay off my deft quickly with no more spending.

:kick:

[davidwparker]

23. Do that.

I did. I sold my house and used the equity to pay off all that I owe. Having bought everything I need, I don't purchase anything anymore except food and utilities. I went back to renting as I expect the real estate market will crash like the dot-com.

I took mine and ran.

It's good not owing anything to the Mastercard/Visa freaks. Vultures.

[cliss]

24. Nice. I have a feeling

you will be proven correct when the dust settles. Here's a newsletter link from Trends Research Institute.

They're saying the same thing. And these guys are quite reputable.

http://www.trendsresearch.com/journal.html

Scroll down a little ways, look on the right hand side. "The Real Estate Fizz"

[SpiralHawk]

27. The Fizz

REAL ESTATE FIZZ

The red-hot real estate market, after four straight years of gains averaging nearly seven percent, will lose some sizzle and could turn cold in 2005.

Similar to the 1929 stock market crash story of Joseph Kennedy knowing it was time to sell when the shoeshine boy gave him stock tips, now legions of job-seeking unemployed have become real estate agents and mortgage brokers, while novice speculators flip properties … all hoping to turn a quick buck.

snip...

[tjwash]

26. So your saying that a hundred and eighty thousand dollar house...

...will suddenly devalue to zero dollars like dot com stock did? In that case you had better invest in a lot of guns, ammo, freeze dried food, and other apocalyptic survivalist gear.

[LibertyorDeath]

28. ''

:kick: