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."
Pretty much says it all. This would be my post to you *professional*
Thanks sprite for laying out how the world works
That is something they don’t teach Engineers. Good post. :^)
How about we get Jim Rob to have an investment corner here? It’s about time. We should learn from each other
The dollar is coming off HISTORIC highs, which combined with Democrat Policy, has made it MUCH more profitable to manufacture overseas.
If we could get a handle on the DEMOCRAT POLICIES that drove these jobs offshore in the first place, we are getting back to an atmosphere where manufacturing in America can be profitable again...
Very good reply. I don't think that .o1% of Americans have any idea how important your second point will be to their future standard of living.
Hydroshock keeps an econoping list. That’s a good place to start.
I would wait, but don’t be surprised if gold gets knocked back down to near 700 in the next few weeks. That’s nothing. It’ll be over 1,000 next year, and will stay in four figures after that.
All kinds of great coffee and lattes in Europe. Only problem is it will cost you (American) $10 a cup
Other cultural *experiences* even more expensive
It is a fact that when money is manufactured without wealth it will decline the value of that currency. We did that heavily during 2003-2004 and will undergo a period of over-circulation and devaluation. America will bounce back but it will involve a recession. JMHO
Hi Travis!
another point about his quote: “Why should investors and central banks around the world invest in US assets when their value is steadily declining?”
Investors around the world will wait and wait and wait knowing that US assets will always be cheaper to buy tomorrow - so why buy them today. This makes for a self-reinforcing downward spiral in asset prices. Kind of like a steel sailboat that takes in too much water.
Regards,
Lurking’
I’ll get on hydroshock’s list
This is uncharted water.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
~~Ludwig von Mises
Hey, watch what you say about steel sailboats.
my son is the kid in San Diego that is looking to crew.
Lurking’
Dennis has a point which you may have overlooked. Does it not bother you that American companies and American assets can be bought up quite inexpensively by foreigners? You may not remember the outcry in certain quarters over the japanese buying up American companies (media companies!) and properties before their economy imploded. Today we’re fending off middleast suitors. As much as the left scares me, so do those practicing savage and unpatriotic capitalism who regard others as nothing more than labor and bagholders.
I agree with much that you represent and I'm glad you're back with us all!) :^)
http://www.freerepublic.com/focus/f-news/1053684/posts
Squanderville versus Thriftville (Warren Buffet)
fortune ^ | oct 2003 | Warren Buffet
Posted on 01/07/2004 11:35:03 PM EST by dennisw
By Warren E. Buffett, FORTUNE
I'm about to deliver a warning regarding the U.S. trade deficit and also suggest a remedy for the problem. But first I need to mention two reasons you might want to be skeptical about what I say. To begin, my forecasting record with respect to macroeconomics is far from inspiring. For example, over the past two decades I was excessively fearful of inflation. More to the point at hand, I started way back in 1987 to publicly worry about our mounting trade deficits -- and, as you know, we've not only survived but also thrived. So on the trade front, score at least one "wolf" for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway's money. Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline
For the fun of it, you got the ticker symbols? I want to run a program on it, give some stats back to you. You’ll like it. BTW, thanks, decent of you to share something somewhat personal.
good news for the U.S. manufacturing sector and for investors in foreign holdings.
Overall the dollar was overvalued anyway.
I do not see this as a big deal or even a small deal.
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