Thread: Chavez: 'Empire of Dollar is Crashing'

Chavez: 'Empire of Dollar is Crashing'
MoneyNews
Monday, Nov. 19, 2007

TEHRAN -- Venezuelan President Hugo Chavez said on Monday the "empire of the dollar is crashing", a day after his country and anti-U.S. ally Iran advocated action over the weakening U.S. currency during an OPEC summit in Riyadh.
"Soon we will not talk about dollars because the dollar is falling in value and the empire of the dollar is crashing," he told reporters in Tehran. His comments in Spanish were translated into Farsi.

"Naturally, by the crash of the dollar, America's empire will crash," Chavez said.

http://moneynews.newsmax.com/money/arch ... .cfm?s=mnh

"Naturally, by the crash of the dollar, America's empire will crash," Chavez said.

If by "America's empire" he means the non-elite majority, he is correct. Unfortunately it is also by design.

There are plusses to a falling dollar. For the last 10 or more years it's been cheaper to buy and hire foreign. So much cheaper that we simply couldn't compete, and business were shuttered while jobs flew overseas. Now, we've lost a lot of our capacity, but we could rebuild. Also, this might force us to actually do something about our dependence on the good will of foreign oil producers. Not exactly the firmest of friends.

I hear what you are saying Betsy Ross but, in order to "normalize" U.S. and Canadian wages and standards of living with that of Mexico, the former two must be taken down several pegs...and a collapsing dollar will do just that. It will also help to usher in the dreaded AMERO which, we will be told, will be absolutely necessary to get "back on track".

That may be (the Amero) but what I was told would happen with a falling dollar is that foreign commodities become more expensive. We have been a cash cow to the third world for so long, I would like some relief. In my profession, back in 2001, we were being replaced by people earning a sixth of what we made. Since then, their incomes have gone up and the dollar has gone down, and the first signs of outsourcing casualties are starting to appear. And, they are turning their greedy eyes elsewhere. I would love it if America could get back in touch with our incredible ability to make and do things locally again. I can remember when we did.

Originally Posted by BetsyRoss

That may be (the Amero) but what I was told would happen with a falling dollar is that foreign commodities become more expensive. We have been a cash cow to the third world for so long, I would like some relief. In my profession, back in 2001, we were being replaced by people earning a sixth of what we made. Since then, their incomes have gone up and the dollar has gone down, and the first signs of outsourcing casualties are starting to appear. And, they are turning their greedy eyes elsewhere. I would love it if America could get back in touch with our incredible ability to make and do things locally again. I can remember when we did.

That's not going to happen unless Americans are willing to work in factories for 25 cents a day like the Chinese do.

I don't see anything good in the collapse of the dollar.

What made offshore outsourcing go was two things: that an American dollar would buy so much over there, and that the people didn't ask for much by way of wages. Wages have been increasing at 12-15% per year in India, for the skilled ones anyhow, since 2000. And there are other overhead costs (extra management hours and expertize) when key work is being done over there. When 1 USD=50 INR, then it didn't matter how good or efficient we were. When 1 USD = 39 INR that's quite a drop in profits. And when 1 USD = 35 INR I was told that they are basically out of business where we are concerned. China is a different matter because of their society (communist) - they can basically get away with more. But there is still the issue that if Americans are paying the freight, Chinese goods will become more expensive as oil does. And, confidence in them is low now too.

I will admit I do not understand a lot about currency, devaluation, etc.

Yes, I do feel that part of the reason for outsourcing was labor savings, but not all.

These companies relocate and there is no property taxes to pay on the buildings or equipment.

They relocate and there is little or not environmental rules (precious little here - but probably none there.)

No labor laws, no employment taxes (as with illegals here), no workman's comp, no health insurance.

One of the things I have noticed about foreign made goods - even name brand foreign made goods is their lack of quality. There is no way Americans would have purchased an American name brand product as cheaply made (as in shoddy and poor quality) as we settle for with these overseas products. If they had begun putting them out while still manufacturing here - they would have gone out of business.

I think there are many reasons, labor is not the only one - although a large part of it.

Has this devaluation been orchestrated to force us to beg our government to please, please, align us with third world countries or we will perish.

Check this out - I also know a few people on either side of the Atlantic who make a shadow living fixing outsourced work.

http://www.ociweb.com/consulting/off_sh ... itservices

Of course, when they were that much cheaper it seemed worth it to the upper managers in the skybox. It was the world of 'good enough' IT, IT as a commodity, IT as a fixture like plumbing. As one colleague put it, now they pay 1/3 as much for 1/5 the support, seems like a good deal to them.

I have heard people who work with these outsourced employees that it is very hard because there is such a difference in education.

Of course, the stories we hear and see are how much better educated than Americans they are.

I remember hearing the President say we needed to provide funds for companies that are offshore 'so they can be competitive in the world'. I wondered at the time, what exactly that meant - except campaign paybacks.