[Jewelry making - Article 00340] - Re: [Orchid] Handmade vs mass-produced

[Christine Denayer]

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    Hi Dave and Neil, 

    First, I still need to thank Dave for his nice words he had to say
    about my post. 

    Second, I would like to make a comment to Neil George's post
    concerning the US $ - also with respect, I would beg to differ. I said
    that the $ nowadays is rather weak and I predict that it is going to
    get weaker over time. 

    For what concerns the first point, I remember that, when the Euro
    was introduced, one US $ was equal 1.04 Euro. However, when we were
    in Ireland in July, the US $ was equal to 88 Euro cents. At a certain
    point - I don't remember exactly when - the $ had been losing almost
    25 % in regards to the Euro. In the meantime, the gap is not as wide
    anymore. However, I don't think that this has anything to do with
    American policy whatsoever. I think it is entirely due to the
    recession which seems to hit Europe harder than anyone had expected. 

    Then there is the second - and more serious - point of my prediction
    that the US $ will get weaker. Neil George disagrees with me and he
    uses good arguments to make his case. Unfortunately, the same
    arguments can be made to my make case too. 

    Only a month ago a joint report of the Committee for Economic
    Development, the bipartisan Concord Coalition and the Center on
    Budget and Policy Priorities concluded that under current policies,
    the American federal debt would rise by $5 trillion over the next
    decade. $ 5 trillion ... This will coincide with the generation of
    baby boomers starting to collect benefits. At that time, debt will
    stop to grow and start to explode. Neither business leaders,
    industrialists or politicians address this problem - but it *will*
    come and it will hit us (hard). Neil writes about the Japanese and
    the Chinese and he is right to do so as these days, strange as it may
    sound, in reality the American federal budget and the value of the
    dollar depend on massive purchases of Treasury Bills by the
    governments of (basically) these two countries. One day - and no one
    knows when, the creditors will want their money back and no one
    trusts a debtor with a *lot* of debt ... It's not difficult to see
    the direction in which all of this is going: there will be higher
    import costs, a cutback in spending on cheap foreign goods (most of
    them are Asian), rising inflation, perhaps chaotic financial markets
    and, don't doubt it, a lower standard of living for the American
    worker and less money for needy people. You don't have to take my
    word for it. Paul Krugman - an economist and a human being I admire -
    explained exactly the same a couple of days ago in 'The New York
    Times'. 

    Neil refers to the 'Current Account', which is the means to quantify
    the export debt deficit. Indeed, if the Account is negative, the
    deficit is covered with debt. Nevertheless the dollar is actually a
    strong currency, so argues Neil, because the confidence that the US
    economy generates worlwide and the fact that there are more financial
    holdings and debt held in the US by foreigners than the other way
    around as far as imports and exports are concerned. This statement is
    correct and this is the reason why the argument is wrong. Cannot
    everyone see that a situation like this is unstable? It's basically
    like me owing you a lot of money. For the time being, you don't need
    it back, because you can give my friend a proof of my debt and, on
    the basis of this, he will do things for you, in other words, I am
    creditworthy. However, it is all too obvious that if my debt
    continues to grow, the day will come that my friend is going to
    refuse to do anything for you unless you pay him (in a good
    currency), which is to say that, at that moment, you will want your
    money back. Then I will be in big trouble. 

Best, Will 



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