Less bang for a buck-Greenback's decline has more people considering foreign investments, currencies

The Union Tribune ^ | 30 Mar 2008 | Dean Calbreath

[the invisib1e hand]

by the time chatter like this starts circulating, you know the dollar is near its bottom.

Pity those geniuses who trade 'em in for euros here.

[ovrtaxt]

When the European Central Banks finally start lowering rates, the Euro will drop against the dollar. They’ve been holding off and holding off, trying to protect their exports, but it can’t go on much longer.

I think the dollar will probably end up about 1.30 per Euro. Maybe even less, depending on how much turmoil happens in Europe.

[longtermmemmory]

I see ALOT fewer tourists going to European nations.

[longtermmemmory]

why do I feel this article was written by a currency trader who is looking to dump his loses are newbies.

seriously, we see those get rich quick gold and real estate commercials now.

[E. Pluribus Unum]

Why do you think oil just hit $112 a barrel.

$112 per barrel oil might just save us from the "climate change" hucksters.

I would much rather have a market solution than a global bureaucratic solution to the perception that we consume too much foreign oil.

High gas prices are already causing people to ditch their gas-guzzlers for cars that get better mileage. Just take a look at your local craigslist car listings. There are some great deals on SUVs right now, and it's because of rising gas prices.

This will decrease our demand for gas, and possibly block the United Nations from getting their global AGW tax that they want so badly.

Once the United Nations has global taxing authority, US sovereignty's days are numbered.

[litehaus]

"The Seven Sisters"

WOW! A blast from the past.... I used to joke that 'undoing' the mergers and reporting profits of 5 Bil instead of 10 Bil would 'lessen' the headline BS re profits and perhaps make reporters look elsewhere for 'obscene profits'.....think it would help? LOL....

[be4everfree]

No mistake on my part.

I thought I explained it pretty well, however next time I’ll have to keep in mind who made be reading this.

Thanks,

[Toddsterpatriot]

No mistake on my part.

If the Euro doubles in value in relation to the dollar, that does not mean our market is worth half as much. Sorry.

I thought I explained it pretty well, however next time I’ll have to keep in mind who made be reading this.

That's a good idea. Someone who knows the difference between foreign exchange and inflation might correct you again, if you post the same mistake.

[be4everfree]

Dude

You have no clue.

see ya

[Toddsterpatriot]

Dude, I don't care if the dollar drops against the Euro or against the Yen. Most of my expenses, most of all American's expenses, are denominated in dollars. To equate foreign exchange fluctuations with inflation is to show a true ignorance of inflation.

See ya!

[be4everfree]

Try to live one day without buying or using something that was made outside of this country.

I did not equate inflation with currency fluctuations.

[Toddsterpatriot]

I did not equate inflation with currency fluctuations.

Then why add them together in post #33?

Take the Dow at 8500 in 2003 times the value of the dollar against the trade weighted index (see chart in OP) 1.24 equals 10540.

With the Dow currently around 12500 times the dollar at .71 equals 8875.

So, with inflation adjustments we are going to be down about 30%.

If you adjust for inflation, we're up since 2003. If you adjust for foreign currency, (unless you bought with those currencies, why adjust?) we're down.

Why add them together, unless you were confused?

[dennisw]

Dude, I don't care if the dollar drops against the Euro or against the Yen. Most of my expenses, most of all American's expenses, are denominated in dollars. To equate foreign exchange fluctuations with inflation is to show a true ignorance of inflation.

Dumb post of the month award

[DeaconBenjamin]

Filled up at $3.109 this morning, but diesel was at $4.089. I’ve never seen a $1.00 gap before.

[be4everfree]

I added them together because inflation and the value of the dollar against the trade weighted index are two different things that effect your buying power.

It’s clear, the confusion is on your end.

[rb22982]

Inflation is not the same thing as foreign exchange rate. And FYI the Asian markets are somewhat loosely pegged to the dollar. The Yuan has risen about 18% since 2004. The real purchasing power of a US Citizen is not down 50% since 2003 regardless of what the USD index says. The only thing up that much would be gasoline.

[be4everfree]

I have NEVER implied that inflation and exchange rates are the same.

I NEVER said US purchasing power was down 50%.

It's down approx. 30%.

Yes, you are correct about the Yuan in one sense, but it's more accurate to say that it's loosely traded and strongly pegged as a result of agreements between both governments.

[rb22982]

Inflation since 2003 has not been 30%. It's been between 18-20%. Once the commodity bubble pops (which I think will happen once the fed stops cutting rates this quarter), I wouldn't be shocked to see 0% inflation with 2% core. I also think the $ is near or is at it's bottom as well and definately will be once the fed is done cutting soon.

[be4everfree]

I never said inflation was up 30% from 03 to 08.

The dollar is DOWN over 30% from 03 to today.

The only reason the FED has been cutting rates is to rescue the banks and to help folks refinance out of adjustable rates mortgages. Those lower rates have added fuel to the declining dollar. Meanwhile, it has not stopped inflation.

The easiest way out of this mess is for the US to launch an aggressive program of oil recovery, and I mean NOW !!

Oil is the greatest factor driving costs in our economy.

The dollar could very well be at a bottom, I closed my EUR/USD long position after the Bear Sterns mess. If there are more shoes to drop in this credit crisis the bottom has yet to be seen.

[rb22982]

The next shoe to drop in the credit crises will be the housing deflation in Europe imo.