Posted on 07/11/2007 11:04:36 PM PDT by bruinbirdman
Yours is an interesting perspective.
The dollar is stable? When? Today? Can you read a chart?
http://preview.tinyurl.com/2th343
The dollar has been falling for over a year now and right now is on the brink of collapsing to 72. 8 points down from where it is now. It’s going to happen very soon and ALL imported goods will rise accordingly. It’s falling as I type and gold is rising and will continue to rise against a falling dollar.
Our economy as Paul Volcher stated is “the best economy money can buy”. The government and the Fed have been pumping money into this economy like there’s no tomorrow. They have to to keep it going forward otherwise we are looking at a recession/depression which nobody wants. The government has been lying their asses off to us about inflation being around 3% a year when in reality it’s about 10% right now. If you haven’t noticed rising costs you must be blind. And it’s going to get worse. Much worse.
The Euro is appreciating against the dollar because they have been raising interest rates which strengthen the Euro. The US does not have that option now as it would collapse the economy with all these sub-prime mortgages would default and go into foreclosure. Foreclosures are happening at an alarming rate and are going to get worse.
Obviously you don’t know economics or any history of fiat money and gold. History has stamped gold and fiat money like a sledgehammer for those that know it. You may think “it’s different now” but those are mighty empty words against the deluge of lessons history has to offer.
The Russian ruble, meanwhile, has been increasing in value against both the dollar and euro.
My suggestion to all of you is: get ready for a huge increase in export sales.
Those having surplus dollars will try to take advantage of the price of American goods, which just became cheaper. Think of it as a “bargain sale” in which someone gave you extra currency just before you go to the store.
Duh...
Is America's decline based on the willingness to spend a familys future for debt over cheap Chinese toys?
Double Duhh...
Right now the US is printing money or hard drive money at 13% over last year. But other countries, some even more, are doing the same thing. It’s all to stay competitive with the other currencies (keep those factories churning).
If the government were to stop printing all the “excess” money then we would have a disaster but they won’t and we won’t have one, I hope.
The decline of the dollar has everything to do with this massive over printing of money, trade deficit included. But as you say it should “self correct”. The thing is that other countries don’t want a plunge in the US dollar so they will help support a slow and downward spiral of the dollar. How far will it fall? I don’t know other than the figure of 72 that I stated. Once a equalibrium has been established we can go from there. I have no clue when that will be. Or how bad or not so bad.
...agreed. The fear of the USD adjusting internationally isn’t based on facts. We enrich other nations by importing from them, so they want more. Thus, their currencies go up in relation to ours. As currencies equalize, more manufacturing in the USA will happen. It should be a more widely accepted economic cause-and-effect occurrence.
We should be more afraid of an internationally high dollar. We need more American savings and less debt in order to own and control more of our own economy. Special interests should be stopped from trying to pressure the Fed. and mess with the dollar so much.
I agree. And our higher exports show the lower dollar is working.
After reviewing the posts on this thread, it’s appears quite obvious that allot of the posters never got past the title.
Don't forget our superior helicopters. All the printing presses in the world won't do any good if folks aren't out their borrowing, spending and bidding up assets.
Which leads to the conclusion:
"America, despite all its problems, will continue to dominate the world economy in the decades ahead."
The discussion, nevertheless, is most interesting.
yitbos
Cheap USD ought to mean increased tourism from abroad and, what about the stock market? I wonder how much of the bull market can be traced to (medium/ longterm) investment from overseas?
Its good for us to visit you, spending money left, right, and centre all day in Manhattan, but there is a flip side.
Britain’s strong economy is only propped up by massive borrowing and bloated property prices. If interest rates go up by another 1% in the next 18 months, this charade will come crashing down. It happened in the late 1970s. Then you folk will be over here spending your 1 dollar pounds !
From the article:
". . . anyone who believes that the falling dollar reflects America’s huge trade deficit and foreign borrowing should consider that the one leading currency even weaker in the past three years than the dollar has been the yen; yet Japan has the world’s biggest trade surplus and is the greatest creditor nation the world has ever seen."
yitbos
How is an overly expensive Europe that is impossible to do business in better than a high volume economy like the USA?
It me means more manufacturing and service jobs here.
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