The dollar has reached all-time lows
against the euro
Posted on 10/18/2007 6:07:42 PM PDT by bruinbirdman
The dollar has plummeted to all-time lows against both the euro and a basket of global currencies amid growing fears of a disorderly rout as the US property slump spreads to the broader economy.
The greenback dived after the US 'Philly' business index dropped 10.9 to 6.8 in October, with a shock fall in new orders and inventory, raising the chances of further rate cuts by the Federal Reserve this month.
The dollar has reached all-time lows
against the euro
David Page of Investec Securities also noted that sales of toys and games were high due to fears that stocks would not meet Christmas demand following Mattel's toy recalls. Shoppers seem to have shrugged off any impact of the recent market turmoil, prompting economists to speculate that the Bank of England may wait until next year to cut interest rates.
Other data lent support to this view. Bank of England figures showed that growth in the country's broad money supply, which can fuel inflation, cooled in September but stayed high at 12.8pc.
Growth in total lending by banks and building societies, known as M4 lending, appeared entirely unaffected by the credit crisis, rising from 12.3pc to 13.1pc. Vicky Redwood of Capital Economics said: "With inflationary pressures still strong and retail sales figures supporting evidence that the economy grew more strongly in the third quarter than the Monetary Policy Committee expected, interest rates look likely to stay on hold until next year."
The housing market, however, showed signs of cooling. Data from the Council of Mortgage Lenders revealed a stark 12pc decline in mortgage lending over the month, around twice the average fall in August.
Separately, the ONS released data giving a gloomy picture of the state of the public finances, in a fresh blow for new Chancellor Alistair Darling.
Public sector net borrowing, the Government's preferred measure of the public finances, rose to £7.4bn last month, the highest September borrowing on record and above expectations of £6bn.
Howard Archer of Global Insight said: "With slowing growth, a softening housing market and substantially lower City bonuses all likely to weigh down on tax revenues, the prospects for the public finances look worrying."
I don't hear the Dems complaining. Are they behind the destruction of the dollar? And they are silently cheering? Or are they in cahoots with the Fed and love a bad economy, recession?
yitbos
New issues? Treasuries trade all day long, and if you haven’t noticed, have hung very tight. There is no overbalance of peoople selling them off, pure bs, or the yields would be higher.
The day the fed cut, the rates made a small surge higher, and people simply bought back in, the higher yield. I agree though, it is AMAZING that rates have not gone higher.
Generally, the smart money in the market is in the bond side. What they know must be good, because if all this dollar trashing stuff was true, we’d see at least 6% by now.
I do have my suspicions and thoughts why the bonds are NOT going higher... but you’d all want to crucify me, and call me a dreaming stupid idiot. Fine, y’all be that way...
I am indeed forever doomed to wander the planet cynical and faithless, skeptical of lies told by central planners and their client politicians, trying to calculate the new lie and avoid it as far as that is possible, which alas, is not actually that far. Ever I try though, as though my family’s prosperity relies on this acumen.
I think we just started a new fiscal year after deficits came in much below projections for 2007.
yitbos
PS - they have hardly started on this years budget. We get GW for two more.
Japan does just great with a strong currency. Canada does great too.
Sorry to give one line answers-——
But when you visit Europe you will be treated like a 3rd wordler with your (mine two) pathetic US Dollar
Fleeing stocks? The markets are up 20% in the last 52 weeks and up 12% YTD. If that is fleeing stocks than I say bring on more of fleeing stocks.
As I click the reply button, Gold is at the highest level it has seen in over 1/4 century....
And adjusted for inflation it’s still 70% less than it’s all time highs! Go gold go!
My Brother!!!!! Damn Man! it’s been along time my friend,How are you?
If you’re right then there will not be an increase in Treasury issues versus past ones. Check back in a few and remind me if you are right. I will eat crow and kiss the greenback full lips on the original George, rather than left and north wherein the anathema wording of “Legal Tender” resides.
Canada, too early to tell, but Japan is doing just great? Their stock market is less than half, what it was 18 years ago. Their banks are technically insolvent?
If I borrow a million dollars today, and then the USD gains in value later, as you say is important for the US, does it not get paid back, with more expensive dollars of interest and principal? Maybe you’d liek that, but I’d frankly like to borrow money today, pay back with discounting dollars and principal over the term of the loan.
I’d love to borrow canadian money right now, pay it back cheaper as the canadian dollar goes from par back down to say 80 cents on the usd. Wife is Canadian, see if we can somehow do this..
In August, analyists were saying that 800 was possible, but improbable by Dec 31. At the rate of the past two weeks, we will be there by next friday. (and around 875 by Dec.31)
Things are great dude! Long time no see.
I live in Tacoma, have 4 kids now, and golf full time, work part time...
When GW finally won, I decided to lay off FR for a while, and try to get some work done. Business is good despite every crazy darn thing that happened since Sore Loserman. My investment biz is now one of the biggest in Pierce County.
What are you up to these days?
You mean they've been Commies too long?
yitbos
Yes, highest when valued in the currency you and others think is a losing bet? So, how does breaking even feel?
Ha ha ha
Seriously, no, that is fine. I’d only say that currencies go back and forth, and we are now on the verge of going the other way. You and others, should at least consider the idea, as you might make an absolute fortune playing things the other way now.
Come on, you really think the Canadian dollar will be worth more than the USD? And for any meaningful time? If so, we’re going to be up to our eyeballs in Canadian tourists down here, and I know first hand how irritating those folks can be.... I married one, and many moons ago worked in retail by the border. Shhhhh, canadians are STUPID....
I will say this. From the abuse I have listened to over the past four years for hedgeing against the Gov making dollars out of nothing I’m very close to Double Investment. Thanks for the education and insightfulness of many a FReeper! :^)
Can you think of any Japanese industries that have lost market share in the US? Autos? Entertainment? Home electronics? Business machinery? Machine Tools?
Yes, maybe the communist mindset is what makes them stupid, but other more capitalist societies have also been stupid as well in what they do with the usd they have. How many really bad investmetns did the Japanese make, only later to sell back at massive discounts to the locals?
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