Fears of dollar collapse as Saudis take fright

nickb · on Sept 20, 2007

N.YC is now one step away from becoming another reddit. All we need now is one "bush/cheney is evil" story on the front page and the transformation will be complete.

yters · on Sept 21, 2007

The comment/submit buttons needs to be hidden in the source, like the down vote button was, so only hackers can figure out how to use the site.

michaelneale · on Sept 21, 2007

agreed. Who let them in.

henning · on Sept 20, 2007

According to reddit this means we're all going to fucking die.

Caligula · on Sept 20, 2007

Before or after we invade Iran?

andyn · on Sept 20, 2007

After we're beaten up and attacked with Tasers at the door of Best Buy for failing to show our papers but not before we've seen the best picture of a tree we've seen all day.

bharath · on Sept 20, 2007

One country that has a lot of gain from maintaining the peg is China and it happens to have the resources to do so if it comes to it.

ivankirigin · on Sept 20, 2007

From what I understand, currencies tend to reflect purchasing power parities. Something as arbitrary as the currency used in oil sales won't change US productivity, which is the most important component of wealth.

So I'm not too worried about this kind of thing.

I can imagine some disruption caused by reaction to this though, especially if congress tried to solve the problem.

Either way, I have a mortgage. Nothing would make me happier than to have my debt mean less which a falling dollar :-P

jraines · on Sept 20, 2007

What, do you get paid in Euros?

ivankirigin · on Sept 20, 2007

My mortgage is a fixed contract, while my salary is fluid.

sbraford · on Sept 21, 2007

Children playing with stacks of worthless currency, Germany 1923: http://sablog.com/wp-content/uploads/2007/08/weimar2.jpg

I'm not saying it'll happen in the US, but anything's possible (especially to degrees, see current subprime crisis), especially with a reckless leader at the helm who doesn't understand that we need to, you know, actually pay back all this debt we're accumulating as a country one day.

Great article on the subject: http://www.bitsofnews.com/content/view/5955/

ivankirigin · on Sept 21, 2007

That must be come foil to Godwin's Law, right? Talking about economic matters and bringing up Weimar :-P

dpapathanasiou · on Sept 20, 2007

Nothing would make me happier than to have my debt mean less which a falling dollar

Unless you get paid in Euros or Yen (or even Canadian dollars), that doesn't make sense.

tocomment · on Sept 20, 2007

Perhaps he's talking about inflation in general which would mean his income goes up but his mortgage stays fixed. Which is certainly good for him.

How is inflation related to a falling dollar? I figured they were basically the same thing, but perhaps not.

dpapathanasiou · on Sept 20, 2007

Inflation doesn't mean income goes up (unless your job contract guarantees inflationary increases), it means prices increase.

So while his mortgage may be fixed, the prices of all other things will increase, while (more than likely) his income will stay flat.

It's not a recipe for eliminating debt, so he shouldn't be cheering that scenario.

ivankirigin · on Sept 21, 2007

Why would my income stay flat in the mid term? Yes, prices would increase, which would be bad. I'm not sure if I'd end up on top on balance.

ivankirigin · on Sept 20, 2007

You're right, that's what I'm talking about. A dollar fall would hurt my purchasing power on imports and when I travel, but that is short term. My original point about PPP is that these exchanges adjust to match levels of wealth. There is little reason two countries with similar wealth should have different purchasing power on imports because of their currency.

I don't know enough about inflation vs. currency fluctuations on comment on the differences.

gojomo · on Sept 20, 2007

Fans of the 'Arab pullout causes dollar collapse, worldwide financial panic' genre may want to NetFlix 'Rollover' (Kris Kristofferson, Jane Fonda, 1981). And also stop posting such stories to YC HN, unless they've got a hacker/startup angle, like "How to profit from the coming financial collapse with AJAX Facebook Apps!"