You guys all look at it like the dollar is gonna fall worse, I look at it like a amazing opportunity, I'd be trading in my Euros for Dollars. Why? Cause the chances of the dollar bouncing back within at maximum, a few years, its great. You could end up rich as hell. Not to mention that we have never declared bankruptcy, a Treasury Bill is one of the safest investments around.
Shit Ken, this is the first time Ive ever agreed with you, not to mention 100% agreed.KEN-JENNINGS wrote:
It really isn't that big of a deal - as one of those articles state, " "The largest reserve holders are not in the Middle East but in Asia and account, together with Russia, for over 63% of total reserve holdings." If Russia and China abandoned their hordes of US dollars, then shit would hit the fan. The fact that Russia, most of Asia, and the U.S. rely heavily on each other in the world of economics ensures a safety net of sorts for the American dollar.
The act of trading oil for American dollars boosts the dollars value somewhat artificially because countries would need to make sure they had a supply of American dollars to buy oil from countries trading in it. The fact that Russia and Saudi Arabia (the two largest exporters of oil) still use the American dollar as their preferred method of payment for their oil exports is indicative of not only their reliance on the American dollar, but also of their reserved bullish attitudes concerning the American dollar.
The idea that the Fed is cutting interest rates (reducing the returns earned per dollar) is more indicative of a belief in saving the mortgage industry from a major government bailout than a conclusion that the dominance of the American dollar is gone in my opinion. I would say it is more a force in driving down our domestic economy than international economy. I believe a proper course for a stronger internal economy would be to slowly remove the fiat money system, and make it illegal for the government to spend more money than it makes.
At this rate the crappy Australian Dollar might even be on par with the U.S. Dollar!
......Lots of Canadians coming over here lately. Thx for the support.
Xbone Stormsurgezz
It not a big deal, but the canadians cant stop shitting themselves over it /laugh
finance.yahoo says that you have to give $1.4666 for every 1 euro. Hence, I'd love to know where you change your money and if we could make up a deal or somethingProtecus wrote:
Since the beginning of just this year, the dollar has declined 11% against the euro, currently sitting at $1.32 for every 1 euro.
lol @ this thread.
Of course it is beneficial for oil producing countries to trade in a stronger currency, like the Euro. Of course it is beneficial for Europe if that currency is the Euro. Obviously it is detrimental to the US since as a net importer having a weak currency is a BAD thing.
Of course it is beneficial for oil producing countries to trade in a stronger currency, like the Euro. Of course it is beneficial for Europe if that currency is the Euro. Obviously it is detrimental to the US since as a net importer having a weak currency is a BAD thing.
Loving the Inflation!
Going there to buy everything soon.
Going there to buy everything soon.
Yes, sure tell me - why is it beneficial for europe to get all the stuff over them? link me articles stating this instead of making stuff up.Bertster7 wrote:
lol @ this thread.
Of course it is beneficial for oil producing countries to trade in a stronger currency, like the Euro. Of course it is beneficial for Europe if that currency is the Euro. Obviously it is detrimental to the US since as a net importer having a weak currency is a BAD thing.
inane little opines
All what stuff over what? You're not making any sense.dayarath wrote:
Yes, sure tell me - why is it beneficial for europe to get all the stuff over them? link me articles stating this instead of making stuff up.Bertster7 wrote:
lol @ this thread.
Of course it is beneficial for oil producing countries to trade in a stronger currency, like the Euro. Of course it is beneficial for Europe if that currency is the Euro. Obviously it is detrimental to the US since as a net importer having a weak currency is a BAD thing.
Why is it beneficial to countries using the Euro to have oil traded in Euros? It's quite simple really, more people buying the currency from Europe means more money flowing into Europe - it's really not that hard to understand. This will further boost the value of the Euro, which for countries that are net importers, like most European states and the US, is beneficial. For net exporters, like China, a strong currency is a bad thing, since it makes their products less competitive in the international marketplace.
Currency trading is just like any other trading, based on supply and demand. If the demand is higher the currency is worth more. Trading oil in Euros massively increases the demand for them, thus boosting the value of the Euro and making it stronger - meaning Euro based currency reserves are worth more.
True, oil will bail the U.S. out of this one. For a decade, tops. Oil reserves are falling everyday, and current forecasts suggest known oil reserves will run dry in about 30-50years (dependant on china and whether she opts for oil fired power stations). As oil reserves fall yet demand stays the same (or even increases), prices will go through the roof, combined with the volatility of the U.S. economy and its fucked up sub-prime mortgage markets = not good for U.S.KEN-JENNINGS wrote:
The act of trading oil for American dollars boosts the dollars value somewhat artificially because countries would need to make sure they had a supply of American dollars to buy oil from countries trading in it. The fact that Russia and Saudi Arabia (the two largest exporters of oil) still use the American dollar as their preferred method of payment for their oil exports is indicative of not only their reliance on the American dollar, but also of their reserved bullish attitudes concerning the American dollar.
With America's strict rules on trading, London is now widely recognised as the financial capital of the world. The way forward for both the US and the UK is scientific research, and leading the way with technology (like japan). Also the defence contractors the worlds 2 biggest Lockheed (US) and BAE (UK) respectively, are increasingly accounting for more and more of both countries revenue (in particular the UK). Whilst I dislike the position the UK is in with the US, the fact is we need the US and they need us. Both countries way forward should be to develop technology for defence.
Also, talk about strong currencies, big up the pound!!!
Last edited by Lord_Richard (2007-12-09 04:42:00)
actually, loose monetary policy like that doesn't occur anymore, not since well over 50 years ago. that policy of printing money is morein line with what south american countries did 20 years or such and so ago. Fed is not printing money, it's borrowing money. and its borrowing with T-bills and other variants. treasury bonds.Phrozenbot wrote:
One major reason why it is losing value is that the Fed is printing money out of thin air, throwing more dollars in circulation and thus diluting the value of the dollar. Plus, the lack of confidence in the dollar means less people are investing in it and eventually foreign investors will liquidate what they have invested.
The dollar is going to take a major dive. If you have lots of debt, you will be screwed. I say pay off your debts, and get your hand on some physical gold.
what IS making the dollar go down is because of the sub-prime mortgage invesments in the US housing markets. banks made bad investments, banks made losses, they loan less and at higher interest rates, sectors of the economy suffer, and it is precisely those OTHER sectors of the economy suffering which is what is making the dollar drop. world investors (US and foreign) are selling of their investments in America (cutting their losses as there is a projected recession in the coming months and as such there will be company losses (investment losses). They are then placing them elsewhere, some other country that is more stable. and that involves selling dollars (that they have been paid in, as investments in US are denoted in dollars) to the world currency exchange (which shifts the supply curve of dollars down, decreasing value) and buying whatever currency it is of the country they would like to buy investments in (basically shifting one asset in US to another form of asset in anotehr country, all the while dropping US exchange rate and upping the other country's exchange rate).
we've gone off the gold standard (Bretton woods system: world currencies backed by dollar, dollar backed by gold) in the 1970s for a particular reason, and that is in a floating currency world system account deficits (basically trade imbalances, but not exactly) can correct itself better.
i've taken courses in international economics... i dont see how the drop of the dollar is doomsday as some poster have the impression of.
if anything this will help america. already the effects of it are being felt. with a lower currency it is cheaper to buy america's exports. this will help our account deficit in the balance of payments and correct our trade imbalance with the world (which is gradually improving, due to our low dollar AND aircraft exports). if anything it will help america. it will hurt europe to have such a strong euro. exports will suffer, as such exporting industries will suffer and many will lose jobs. imports for europe will graudally become more cheaper as the euro rises. thus europe will worsen its account deficit (and in the future correct it with a lower euro--its a cycle)
if all the OPEC countries want to be paid in euros, then the euro value will rise higher (as everyone sells their currencies into the world currency market and the euro exchange rate rises as they buy it, and use the euro to purchase petroleum--which runs the world economy.)
with the dollar falling, investments around the world denoted in dollars will be sold, and the dollars received sold into the currency market with the result of pushing the dollar exchange rate lower.
i really cant see any problem that will hurt america's economy. foreign investment in america might fall but the benefits of this low dollar will overcome most of the negative effect. foreign investment falling in america is not caused by a decreasing dollar (as it would actually be preferable because american capital assets would be cheaper) but its caused by the dollar VOLATILITY. once it stabilizes investment will return again, but that will also decrease in the future because as we sell more exports, our currency value will rise again, foreign investment in america will decrease and we'll be back in the account deficit (and trade imbalance) again as we eat up more imports.
also, whoever said that disaster looms if china gives up the dollar has no idea whats going on. i assume what you mean by china giving up the dollar is unpegging it to the dollar. in which case, that would only help the US-CHINA trade balance in the US's favour and improve the US's Accounting deficit in its balance of payments.
Last edited by -]Eucalyptus[- (2007-12-09 04:37:45)
OK. You seem to have a decent grasp of the mechanics of global economics. Now ask yourself a few questions; does the US import more than they export, does Europe import more than they export and do what is the effect of having a weak currency on imports?-]Eucalyptus[- wrote:
i've taken courses in international economics... i dont see how the drop of the dollar is doomsday as some poster have the impression of.
if anything this will help america. already the effects of it are being felt. with a lower currency it is cheaper to buy america's exports. this will help our account deficit in the balance of payments and correct our trade imbalance with the world (which is gradually improving, due to our low dollar AND aircraft exports). if anything it will help america. it will hurt europe to have such a strong euro. exports will suffer, as such exporting industries will suffer and many will lose jobs. imports for europe will graudally become more cheaper as the euro rises. thus europe will worsen its account deficit (and in the future correct it with a lower euro--its a cycle)
if all the OPEC countries want to be paid in euros, then the euro value will rise higher (as everyone sells their currencies into the world currency market and the euro exchange rate rises as they buy it, and use the euro to purchase petroleum--which runs the world economy.)
with the dollar falling, investments around the world denoted in dollars will be sold, and the dollars received sold into the currency market with the result of pushing the dollar exchange rate lower.
i really cant see any problem that will hurt america's economy. foreign investment in america might fall but the benefits of this low dollar will overcome most of the negative effect. foreign investment falling in america is not caused by a decreasing dollar (as it would actually be preferable because american capital assets would be cheaper) but its caused by the dollar VOLATILITY. once it stabilizes investment will return again, but that will also decrease in the future because as we sell more exports, our currency value will rise again, foreign investment in america will decrease and we'll be back in the account deficit (and trade imbalance) again as we eat up more imports.
also, whoever said that disaster looms if china gives up the dollar has no idea whats going on. i assume what you mean by china giving up the dollar is unpegging it to the dollar. in which case, that would only help the US-CHINA trade balance in the US's favour and improve the US's Accounting deficit in its balance of payments.
Quite simply, the US imports way more than they export, as does Europe - for economies that import more than they export, having a weak currency is a bad thing (because imports cost you more, leading to probable trade deficits) - unless the economy adapts to utilise a different trading model that is less reliant on imports.
With that in mind, it is beneficial for Europe to have a strong currency and detrimental to the US to have a weak currency - as things currently stand. It is far from being a catastrophic scenario, but it is not a good thing for the US.
Look the european market isn't set up to have people trading in euros, firstly you'd have to recalculate every single product from dollar to euro. Every single thing also stocks etc. This takes a long while and delays the market from opening, if the market gets delayed from opening europe loses millions and millions of euros every second because they suddenly became the market chief. The market is too small to carry all the goods, especially when a whole country decides to swap over you'd loose too much time, and time is money.Bertster7 wrote:
All what stuff over what? You're not making any sense.dayarath wrote:
Yes, sure tell me - why is it beneficial for europe to get all the stuff over them? link me articles stating this instead of making stuff up.Bertster7 wrote:
lol @ this thread.
Of course it is beneficial for oil producing countries to trade in a stronger currency, like the Euro. Of course it is beneficial for Europe if that currency is the Euro. Obviously it is detrimental to the US since as a net importer having a weak currency is a BAD thing.
Why is it beneficial to countries using the Euro to have oil traded in Euros? It's quite simple really, more people buying the currency from Europe means more money flowing into Europe - it's really not that hard to understand. This will further boost the value of the Euro, which for countries that are net importers, like most European states and the US, is beneficial. For net exporters, like China, a strong currency is a bad thing, since it makes their products less competitive in the international marketplace.
Currency trading is just like any other trading, based on supply and demand. If the demand is higher the currency is worth more. Trading oil in Euros massively increases the demand for them, thus boosting the value of the Euro and making it stronger - meaning Euro based currency reserves are worth more.
On top of that, the trade from america will be cancelled and shipped over to europe, our harbors are already quite loaded and with all the extra ships and planes coming our way it would get overloaded.
This would delay the arrival of products and cause more loses.
in other words, if something like china swaps from euro to dollar we're all screwed, hard - for europe it wouldn't be beneficial AT ALL
inane little opines
Euros ftw
OK. After reading that I can see you have no idea what you are talking about at all.dayarath wrote:
Look the european market isn't set up to have people trading in euros, firstly you'd have to recalculate every single product from dollar to euro. Every single thing also stocks etc. This takes a long while and delays the market from opening, if the market gets delayed from opening europe loses millions and millions of euros every second because they suddenly became the market chief. The market is too small to carry all the goods, especially when a whole country decides to swap over you'd loose too much time, and time is money.Bertster7 wrote:
All what stuff over what? You're not making any sense.dayarath wrote:
Yes, sure tell me - why is it beneficial for europe to get all the stuff over them? link me articles stating this instead of making stuff up.
Why is it beneficial to countries using the Euro to have oil traded in Euros? It's quite simple really, more people buying the currency from Europe means more money flowing into Europe - it's really not that hard to understand. This will further boost the value of the Euro, which for countries that are net importers, like most European states and the US, is beneficial. For net exporters, like China, a strong currency is a bad thing, since it makes their products less competitive in the international marketplace.
Currency trading is just like any other trading, based on supply and demand. If the demand is higher the currency is worth more. Trading oil in Euros massively increases the demand for them, thus boosting the value of the Euro and making it stronger - meaning Euro based currency reserves are worth more.
On top of that, the trade from america will be cancelled and shipped over to europe, our harbors are already quite loaded and with all the extra ships and planes coming our way it would get overloaded.
This would delay the arrival of products and cause more loses.
in other words, if something like china swaps from euro to dollar we're all screwed, hard - for europe it wouldn't be beneficial AT ALL
None of that is connected.
European stock exchanges DO use Euros for their transactions, just as British stock exchanges, like the FTSE use the pound for trading and US exchanges like the NASDAQ use dollars. Oil is a commodity and is far more like trading gold or copper or silicon than normal stock trading, although oil is quite unique in that it is so widely traded and because of OPEC controls. You don't need to recalculate anything, the countries that choose to sell oil in Euros just sell it in Euros (so the people who buy it first buy Euros from Europe (which strengthens the Euro making European currency reserves more valuable) then use those Euros to pay the country selling their oil in Euros). Currently Iran are selling oil to various Chinese corporations in Euros, this means Chinese businesses are buying Euros, which strengthens the Euro and means imports to Europe are cheaper, but European exports are less appealing to other countries because their price is inflated - since Europe imports more than they export (as does the US) this should be beneficial for Europe.
You really don't seem to have any sort of grasp of economics.
mikkel, is it that you believe world history started 50 years ago?mikkel wrote:
Expansionist and geographically isolated economies with no wars at home and a lot of money to be made off of the ones that are abroad, combined with rich, unexploited natural resources is usually a pretty good breeding ground for a strong economy. It's no wonder that the US economy was the benchmark of stability for a long time, but its falling from grace is a logical consequence of globalisation and a lack of notable natural assets.usmarine2005 wrote:
Why was the US the measuring stick anyway? We are such a young country compared to most.
The US economy is at the mercy of the consumer and the oil to create a wealthy market and a stable and powerful economy. If the oil gets expensive, the cost is passed onto the consumer. If the consumer isn't satisfied, the economy goes to shit, and the stability that makes the US economy a benchmark fades rapidly, along with the value of the dollar. The US needs to reemerge as a leading scientific nation again to recover from the setback they're facing. Relying on the unreliable never got anyone anywhere in the long run.
Perhaps you need to study the content of Al Qaeda videos a little harder, and pull your head out of your arse.David.P wrote:
Because sometimes you find it possible to fit in more "America is Evil" sentiment in one post, Then AQ does in their videos.CameronPoe wrote:
Watch out - I started a topic like this recently and was told that I was being 'anti-American'.
I think the fact that the Canadian and English banks have both lowered their interest rates is going to amazingly help the dollar and put a dent on the slide. That coupled with the fact that the FED will most likely act within six months to lower our interest rates as well will probably stop the dollar from slipping at all and start an upward reaction. That is just on the fiscal end of it.
On legislative end there is so much that we can do but probably wont do. This can include reviving the rust belt with new manufacturing. Slowing the imports of other companies and increasing internal production along with exports. Also, helping the mortgage situation could greatly affect the dollar.
On legislative end there is so much that we can do but probably wont do. This can include reviving the rust belt with new manufacturing. Slowing the imports of other companies and increasing internal production along with exports. Also, helping the mortgage situation could greatly affect the dollar.
Yen FTW.
You have a point. It's good to talk with someone that's not talking out of their ass and knows what they're talking about.Bertster7 wrote:
OK. You seem to have a decent grasp of the mechanics of global economics. Now ask yourself a few questions; does the US import more than they export, does Europe import more than they export and do what is the effect of having a weak currency on imports?-]Eucalyptus[- wrote:
i've taken courses in international economics... i dont see how the drop of the dollar is doomsday as some poster have the impression of.
if anything this will help america. already the effects of it are being felt. with a lower currency it is cheaper to buy america's exports. this will help our account deficit in the balance of payments and correct our trade imbalance with the world (which is gradually improving, due to our low dollar AND aircraft exports). if anything it will help america. it will hurt europe to have such a strong euro. exports will suffer, as such exporting industries will suffer and many will lose jobs. imports for europe will graudally become more cheaper as the euro rises. thus europe will worsen its account deficit (and in the future correct it with a lower euro--its a cycle)
if all the OPEC countries want to be paid in euros, then the euro value will rise higher (as everyone sells their currencies into the world currency market and the euro exchange rate rises as they buy it, and use the euro to purchase petroleum--which runs the world economy.)
with the dollar falling, investments around the world denoted in dollars will be sold, and the dollars received sold into the currency market with the result of pushing the dollar exchange rate lower.
i really cant see any problem that will hurt america's economy. foreign investment in america might fall but the benefits of this low dollar will overcome most of the negative effect. foreign investment falling in america is not caused by a decreasing dollar (as it would actually be preferable because american capital assets would be cheaper) but its caused by the dollar VOLATILITY. once it stabilizes investment will return again, but that will also decrease in the future because as we sell more exports, our currency value will rise again, foreign investment in america will decrease and we'll be back in the account deficit (and trade imbalance) again as we eat up more imports.
also, whoever said that disaster looms if china gives up the dollar has no idea whats going on. i assume what you mean by china giving up the dollar is unpegging it to the dollar. in which case, that would only help the US-CHINA trade balance in the US's favour and improve the US's Accounting deficit in its balance of payments.
Quite simply, the US imports way more than they export, as does Europe - for economies that import more than they export, having a weak currency is a bad thing (because imports cost you more, leading to probable trade deficits) - unless the economy adapts to utilise a different trading model that is less reliant on imports.
With that in mind, it is beneficial for Europe to have a strong currency and detrimental to the US to have a weak currency - as things currently stand. It is far from being a catastrophic scenario, but it is not a good thing for the US.
However, I believe it is a matter of time frame. I would like to point to your "as things currently stand". Yes, as the US currently imports more than it exports, and yes, as the EU imports more than it exports, EU imports will become cheaper with a stronger Euro (minimizing the cost to its accounting deficit) and US imports will become more expensive with a weaker Dollar (increasing the cost to its accounting deficit) but in the long run eventually consumers in the US will buy less imports due to its vast cost and eventually the EU will buy more imports due to its relatively low cost. What comes after is that the US's accounting deficit will reduce over time and the EU's accounting deficit will rise over time.
The unique thing with the US is that the currency has to fall extremely low to get people there to stop buying imports. We love our imports. Most of our manufacturing sectors are replaced by foreign manufacturers and hence we import. Like the EU, in order to reduce the accounting deficit we must export (not just say, American planes, but what we are specialized in: Services. As you probably already know, The Service sector of the US far exceeds manufacturing and agricultural). And while the fall in the dollar may in the short run hurt the accounting deficit eventually it will come to be to improve it. And while the rise in the euro may in the short run minimize Europe's accounting deficit eventually it will come to worsen it.
The thing is, its gonna take a LONG time. As I said, we love our imports. We need it. Half the cars in the US are from Japanese automakers (yes we can tax their American branch but their profits go to Japan's accounting balance, and create a negative reciprocal amount in OUR accounting balance).
Not to mention, especially where I live, people love their luxuries. Mercedes, Burberry, Gucci. The US income gap is vast (not necessarily bad, as Ben Bernake said, the focus shouldn't be a matter of economic equality but economic mobility) and the top of the gap is insanely wealthy. That may explain why they don't mind the increase in price of imports due to currency fluctuations that much as they have a larger disposable income. I'm not sure about the significance of the buying preferences of the top tier of our population in our accounting deficit, it's probably small, but it's still a factor.
me 2 I started a topic like this but I was not called anti-American heheheCameronPoe wrote:
Watch out - I started a topic like this recently and was told that I was being 'anti-American'.
but any who yeah dollar is not doing so good but U.S. might merge with mexico and Canada to form Amero currency just like Euro currency.
Dude, what the heck are you talking about? Interest rates do not have that powerful of an effect on the currency rate. Sure, lowering interest rates might spur investment and consumption (increasing supply and demand--as it is easier to borrow capital) but what comes also as a result is inflation. This discourages investment. Hence, foreign companies would not want to invest in uncertain American capital. Which means they will not convert their foreign currency and buy Dollars (hence upping the Dollar exchange rate) in order to buy this uncertain American capital.Liberal-Sl@yer wrote:
I think the fact that the Canadian and English banks have both lowered their interest rates is going to amazingly help the dollar and put a dent on the slide. That coupled with the fact that the FED will most likely act within six months to lower our interest rates as well will probably stop the dollar from slipping at all and start an upward reaction. That is just on the fiscal end of it.
On legislative end there is so much that we can do but probably wont do. This can include reviving the rust belt with new manufacturing. Slowing the imports of other companies and increasing internal production along with exports. Also, helping the mortgage situation could greatly affect the dollar.
Reviving the manufacturing sector, are you kidding? America's manufacturing sectors cannot compete with foreign manufacturers in our free trade agreements. and to terminate those FTAs would mean protectionism and inefficiencies of our domestic industries, hurting the consumer (but benefiting these inefficient companies and the government--as they gain tax revenue from these companies). If you want exports, think what we specialize in: the service industry. Finance and capital. Science and engineering. Technology. Ipod's do not come from our manufacturing sector ladies and gentlemen. They are manufactured in China. It is our DESIGN and TECHNOLOGICAL INTELLECTUAL CAPITAL that is the export.
Bush is helping the mortgage situation. Although I do not know why. It is not government's job to intervene when people make bad decisions and want more than they can have ("i want a big house! but i have to take the risk of me not being able to afford the mortgage because i want a big house and it's riskier to borrow more sums of money as i do not have the income to reasonably cover the risk of it rising with variable interest rates!"). It's not that they're all going to be homeless. They're just going to have to refinance their mortgages and get a smaller house, like an apartment. However, helping the mortgage problem also helps the banks (who are at fault and really should live with the consequences of it--as Bush said, its not our job to help investors who have made shoddy mistakes). However now the Bank's woes are being felt in OTHER parts of the economy and that's why Bush is intervening. It is hurting other sectors of the economy as Banks lend less to companies who need it among other things.
Hmmmm.... The North American Union. The NAFTA superhighway. The Amero.blademaster wrote:
me 2 I started a topic like this but I was not called anti-American heheheCameronPoe wrote:
Watch out - I started a topic like this recently and was told that I was being 'anti-American'.
but any who yeah dollar is not doing so good but U.S. might merge with mexico and Canada to form Amero currency just like Euro currency.
As confirmed by Lou Dobbs, Steve Previs of Jefferies International (a VERY respectable firm), and Ron Paul.
I'm ambivalent on this issue. It has too close ties with conspiracy theories. When they mention how the Council on Foreign Relations are like this evil cabal that wants to create basically a new North American order. I don't know man, I dont really think all of this is substantial. I doubt the 'Amero' would form and even if it does, they probably wouldn't call it the Amero.
The Security and Prosperity Partnership (http://www.spp.gov/) just wants to increase trade links and cooperation, as well as security issues. It says nothing of an American 'Schengen Agreement' (the european agreement that allows EU citizens to move freely across borders) or a unified monetary union (like the Euro). Canada and Mexico are our biggest trade partners. Its only natural to want to increase cooperation with these trade partners.
I vote 'insubstantial' for the NAU and Amero conspiracy whack job claims.
And even if it is true, I wouldn't be totally against a NAU and Amero. Albeit I would like the currency to be named something other than that wierd ass name.
Total US debt is 44 trillion dollars, how can we expect foreign investors to continue to keep buying our debt when there is simply no way we can pay that back? China, Russia, Japan, Italy, and many other nations are cutting back how much they invest in the US dollar, and are diversifying their investments. Some have already stopped. Trust has been the only thing that has kept the dollar afloat since we the dollar abandoned the silver standard in the 70's and that is increasingly dwindling quickly.-]Eucalyptus[- wrote:
actually, loose monetary policy like that doesn't occur anymore, not since well over 50 years ago. that policy of printing money is morein line with what south american countries did 20 years or such and so ago. Fed is not printing money, it's borrowing money. and its borrowing with T-bills and other variants. treasury bonds.Phrozenbot wrote:
One major reason why it is losing value is that the Fed is printing money out of thin air, throwing more dollars in circulation and thus diluting the value of the dollar. Plus, the lack of confidence in the dollar means less people are investing in it and eventually foreign investors will liquidate what they have invested.
The dollar is going to take a major dive. If you have lots of debt, you will be screwed. I say pay off your debts, and get your hand on some physical gold.
what IS making the dollar go down is because of the sub-prime mortgage invesments in the US housing markets. banks made bad investments, banks made losses, they loan less and at higher interest rates, sectors of the economy suffer, and it is precisely those OTHER sectors of the economy suffering which is what is making the dollar drop. world investors (US and foreign) are selling of their investments in America (cutting their losses as there is a projected recession in the coming months and as such there will be company losses (investment losses). They are then placing them elsewhere, some other country that is more stable. and that involves selling dollars (that they have been paid in, as investments in US are denoted in dollars) to the world currency exchange (which shifts the supply curve of dollars down, decreasing value) and buying whatever currency it is of the country they would like to buy investments in (basically shifting one asset in US to another form of asset in anotehr country, all the while dropping US exchange rate and upping the other country's exchange rate).
we've gone off the gold standard (Bretton woods system: world currencies backed by dollar, dollar backed by gold) in the 1970s for a particular reason, and that is in a floating currency world system account deficits (basically trade imbalances, but not exactly) can correct itself better.
i've taken courses in international economics... i dont see how the drop of the dollar is doomsday as some poster have the impression of.
if anything this will help america. already the effects of it are being felt. with a lower currency it is cheaper to buy america's exports. this will help our account deficit in the balance of payments and correct our trade imbalance with the world (which is gradually improving, due to our low dollar AND aircraft exports). if anything it will help america. it will hurt europe to have such a strong euro. exports will suffer, as such exporting industries will suffer and many will lose jobs. imports for europe will graudally become more cheaper as the euro rises. thus europe will worsen its account deficit (and in the future correct it with a lower euro--its a cycle)
if all the OPEC countries want to be paid in euros, then the euro value will rise higher (as everyone sells their currencies into the world currency market and the euro exchange rate rises as they buy it, and use the euro to purchase petroleum--which runs the world economy.)
with the dollar falling, investments around the world denoted in dollars will be sold, and the dollars received sold into the currency market with the result of pushing the dollar exchange rate lower.
i really cant see any problem that will hurt america's economy. foreign investment in america might fall but the benefits of this low dollar will overcome most of the negative effect. foreign investment falling in america is not caused by a decreasing dollar (as it would actually be preferable because american capital assets would be cheaper) but its caused by the dollar VOLATILITY. once it stabilizes investment will return again, but that will also decrease in the future because as we sell more exports, our currency value will rise again, foreign investment in america will decrease and we'll be back in the account deficit (and trade imbalance) again as we eat up more imports.
also, whoever said that disaster looms if china gives up the dollar has no idea whats going on. i assume what you mean by china giving up the dollar is unpegging it to the dollar. in which case, that would only help the US-CHINA trade balance in the US's favour and improve the US's Accounting deficit in its balance of payments.
We import way more than we export. Germany exports more than we do! We are a nation of consumers. With a worthless dollar, we won't have any purchasing power and our economy will grind to a halt. And no, we won't be able to make things like steal and export it like we used to, because even though a weaker dollar means cheaper goods for exporting, China alone can has the capacity to produce everything in the world (there is overproduction in the world). So the production power around the world creates a very competitive market we won't be able to move into, or at least be successful in IMO.
Most people in the US have lots of debt. If you are in $100,000 in debt, and the dollar suddenly becomes 1/20th (Nickel) of it's value, you will owe $2,000,000 in debt because debt is based on nominal dollars when the currency deflates in value and your debt doesn't deflate with it. There is no way you can pay that back, and everything you own will be liquidated. It will be GG for you and millions of Americans alike. Even if you wanted to pay it back, you probably wouldn't have a job anymore. This is where you get the downward spiral.
By the way, the only way the Federal reserve can reduce interest rates is to print more money. It is coming out of thin air because inflation is artificially low.
http://www.youtube.com/watch?v=3RhnHo3RDfg