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The US Dollar’s Fall May Bankrupt Airbus And You Should Care
26 November 2007Now this is not great news. The engines are made by Pratt and Whitney.
This industry is priced in dollars, the Airbus A380 was sold at $300 million retail price for the double-decker super jumbo. That $300 million is now, $255. A 15% loss.
This may result in massive layoffs in Europe and a restructuring of Airbus itself.
The profit margins are not great in this business, given that the competition is so fierce.
While this will probably help Boeing, but not to a large extent. Boeing outsources a considerable amount of work on it’s aircraft, so Boeing will see pricing pressure also.
Why is the dollar falling? Simply put, the amount of dollars in circulation has increased way beyond the value it represents. One way this occurs is through massive spending on credit, both governmental and private.
The decline in the dollar is reflected in the rise of global commodities such as gold and oil. Oddly enough not many politicians are talking about this and how the price of gold and oil is related to government spending. This is why a branch of conservatives want to go back on the gold standard, being on the gold standard would prevent our government from overspending by printing more dollars.
Do you know who is the largest holder of US Notes is? Actually it’s you. The US government holds the vast majority of US Notes, not China.
So when the US government overspends what they are really doing is reaching into your wallet and swiping your credit card. The world economy knows this, so they compensate by reducing the value of the dollar. And presto, your gas and heating oil costs more.
The European governments will take steps to prevent America’s sneezes from giving them the full blown flu in the future. They will de-couple their businesses and economies from the dollar, they have the means now with the creation and acceptance of the Euro.
The London Stock Exchanges equivalent of our Dow Jones Industrials is the FTSE (footse) 350. And it has shown NO appreciation in the past year. Whereas our has.
So how much of the run up in your 401K is due to government induced inflation and not because of real growth? Got your attention now?
The only politician I hear talking about this is Ron Paul.
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One Response to “The US Dollar’s Fall May Bankrupt Airbus And You Should Care”
November 28th, 2007 at 12:09 am
I have been blogging like mad about this very issue, and I am happy to hear you touting Ron Paul, especially on this debased dollar of ours. This, to me, demonstrates you to be an insightful person.
The GCN radio network has been discussing this very issue and I have been blogging like mad over the collapse of the dollar as it is also badly hurting the economy by surging the cost of not just airplanes, but energy of which translates to higher food, gasoline, electric and oil prices.
Oil is the life blood of capitalism, it is what makes our American empire possible and the debasing of the dollar has the oil barons kicking America and Americans to the curb.
Government construction contracts are up, school expenses are up, and our way of life in suburbia is under attack as the commute to work consumes more and more income.
I have written many blogs on this issue and would love nothing more than to have you share my daily updates with your readers. Hopefully my website plug will be worth your while and we can join forces in the 2008 revolution.
My Website blog is: http://www.rfrank118.com/blog.htm
Also be advised that a Ron Paul meetup is scheduled for 8:00 A.M. at the Milford CT town center Dunkin Donuts.
Rocco J. Frank Jr.
Candidate for Milford State Rep. 118th District