The Future of The U.S. Dollar »
Posted By universal12 1 year, 4 months ago in Business & FinanceExpert's opinion: Had an interesting conversation with The Dealer out of Hong Kong last night. We were both glued to our screens waiting to see what would happen with the Shanghai equities markets.
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Comments So Far: 62
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populist1 year, 4 months ago
I thought so too - maybe a bit too optimistic for me, though. Since the end of the gold standard, inflation has been out of control. The federal reserve keeps printing money and driving the value down....
It's a pretty complex issue - some good reading on it here:
"Paper Money and Tyranny"
http://www.populistamerica.com/paper_money_and_...
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Macondo1 year, 4 months ago
Pop.
I agree, The article is not only "a bit too optimistic" as you pointed. It has the analysis of someone who stays in Wall Street and probably does not have the benefit of experiencing other markets firs hand.
As you say it is a very complex issue.
The blog story is wishful thinking.
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Amazing11 year, 4 months ago
Yes, thank you for posting this. However, I think the writer is more than just a bit of a Pollyanna. The whole economy is set to take a big tumble and being invested in dollars in not a good idea.
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Amazing11 year, 4 months ago
Gold and silver are good investments from my point of view. The problem with the dollar (and many other currencies) is that they are paper only with no assets to back them up. In the history of the world, a fiat currency has never failed to collapse. It's only a matter of time. Gold and silver will increase in value.
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Hopefool1 year, 4 months ago
Looking from outside the dollar may be 'weak' but the US has a strong economy and therefore perhaps adjustment is what's required. Can't see the dollar disappearing. Spending may have to be curtailed but with an elaction coming up I can't see the 'screws' being turned yet. The next President and the Legislature will have some tough decisions to make. Anyway I hope the dollar stays where it is because my visit to Virginia in October will make my sterling go a long, long way. Only sorry your petrol is getting more expensive; bit of a bummer for touring around.
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Truzseeker1 year, 4 months ago
Please see my post at ...
http://donoevil.netscape.com/story/2007/05/16/t...
The dollar is dead based on the amount owed to the rest of the world accelerated by inflation.
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KingOfTruth1 year, 4 months ago
For many years I have owned a lot of Freeport-McMoRan Copper & Gold Inc....I started buying the stock in the 1970's....
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Macondo1 year, 4 months ago
Universal,
Yes gold and silver are excellent as a raincoat or umbrella for people like you or me during the rainy season.
It is not the macroeconomic solution for an entire economy.
The massive investment in metals, will take moneys away from industrial growth and other competitive endeavours in the international trade.
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NelsonR1 year, 4 months ago
This article reminds me of the Fox telling the chickens before entering the chicken coop, "Let me in, I'm a peaceful fox who will do you no harm".
Printing money overtime and putting nominal emphasis on the housing market is quite juvenile in thinking. The housing market is a leading factor in driving our economy, it has just begun to sink. Many years ahead of downturn.
Is this guy employed by the Bush administration? Propoganda.
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KingOfTruth1 year, 4 months ago
Actually the housing market just did something unusual.....it had the biggest increase in new housing starts in many years....the prices cam down a little but the interest rates stayed stable......that should result in even more houses being purchased and then more being built......this will not be a repeat of the dot.com bubble which was pushed up by the phony accounting schemes propounded by the Clintoon Regime......
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NelsonR1 year, 4 months ago
KOT - Are you getting your housing start figures from our government, if so please refer the site this information was obtained from? Are you also referring to the overall housing market or a sector or price range?
Your information that I can refer to would be enlightening.
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simonsez1 year, 4 months ago
All extra money has to be invested and working. USA is still the best place to invest and the safest investment is USA Treasuries. USA stocks are the best for small investors.
Stability in Iraq will push the dollar up against the others and that will be coming by summer 2008.
I would recommend being invested in energy and utilities.
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NelsonR1 year, 4 months ago
simon - Stability in Iraq will come when we withdraw, Bush still has many months ahead so your stability analogy sucks. With the vigorous Iraq training ground for new insurgents and the multiplying of these radicals, I see years of turmoil ahead. Thank you, George.
Invest in energy and utilities is common sense especially with Bush in power. Treasuries, hope their not backed by our housing sector!!
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simonsez1 year, 4 months ago
Maybe you haven't heard, there's an election next year. If you think republicans are going to let Iraq stay on the front page going into that election, you are naive.
Also, those investments have nothing to do with Bush.
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crghss1 year, 4 months ago
Gold and silver is played out. Just like the Housing market. Energy and Health care for short term growth. Long term growth, stock market everyone knows that. All thought go conservative now. This Stock market has been a bull to long. Get ready to short some stocks.
It would have been nice to have a large chunk in Euro's 4 yrs ago and now convert to USD but hind sight is 20/20.
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Macondo1 year, 4 months ago
Most of the cooper goes to China for industrial purposes.
The international price has skyrocketed with no short term hopes to level down.
Our international relations with the largest cooper producers are not the best at present (Thanks Mr Bush.)
Many other raw metals and other materials go to the east.
We are very picky about NAFTA because we are afraid of buying tomatoes or flowers from Latin America.
We are not afraid of buying almost anything from China. (Their human rights record is just perfect for our standards.)
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agentX1 year, 4 months ago
"But, the spending that should be associated with that hasn't shown up yet. I think that's a matter of time, because I don't see any reason for the U.S. consumers to all of a sudden change their savings habits"
My sense is that the mortgage foreclosure increase, the gas price increase, the inflation increase, and the annoying celebrity increase is the cause behind the lack of spending, and I am not as confident that the spending downturn will change.
Nonetheless, I remember reading in Foreign Affairs (my first read of it) that currencies being tied to US dollar is causing some countries to nationalize their money, thus leading to Argentina-type problems AND that low yield currencies should be dropped for the Euro, Yen, or a mutli-national currency.
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protoham1 year, 4 months ago
It is probably the fact that the divide between the rich and the poor is wider. The rich invest, the poor spend. So more capital is being invested, less is buying. So his analysis that the spending should be following has a flaw in it. I think gold and silver would be a good investment at this point.
However, with that said, I have customers that we are designing new products for because the exchange rate is killing them. We can make it cheaper here than EU. This could actually be the beginning of the swing back to US Manufacturing.
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skeek1 year, 4 months ago
Not likely. There's still China to reckon with, (and India), but from what I've read, although the US today accounts for 25% of global manufacturing while China accounts for only 12%, China will be on par with the US by 2020. You may be able to make it cheaper there in the US than in the EU but already a sizeable proportion of EU goods, (as well as US goods), are manufactured today in China, and that's a manufacturing base the US can't compete with on price alone.
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canadianrancher571 year, 4 months ago
The only way out of the crisis in the U.S. economy and I do think there is a crisis will be for the federal reserve to print more money to cover debts. If they print enough to get debts paid down to a managable level for both the public and government it will cause inflation that has not been seen in quite a while. I think this will caus a complete collapse in the currency and maybe in other currencies as well, precious metals or land that can be used for agriculture are good bets. I think this coming correction will one to be remembered, as you can tell I'm a bear not a bull.
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canadianrancher571 year, 4 months ago
You must be new school, to me crisis is when you have dug a hole so deep you can't see sunlight
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Macondo1 year, 4 months ago
I have spent most of my last 6 moths overseas.
My exchanging of monies in different currencies based in American Dollar.
During this time continuously and precipitously, my Dollar is worth less. Banks and monetary entities prefer to trade in Euros and the consensus is not to take midterm commitments in Dollars, since it is risky for the foreign trader.
It is possible that the guys of the article at (bestwaytoinvest.com) know some privileged information still unknown anywhere else.
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Macondo1 year, 4 months ago
Some people have the theory that war stimulates the economy.
(I believe the opposite) but this guys may have such trend of thought.
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skeek1 year, 4 months ago
Macondo: " I have spent most of my last 6 months overseas. My exchanging of monies in different currencies based in American Dollar. During this time continuously and precipitously, my Dollar is worth less."
Exactly. You've witnessed it for 6 months but the decline in value of the US dollar has been consistent for 5 years now. It's decline has been inversely proportional to the rise of the Euro. This is significant.
The proof is in the pudding. Not some fatuous, nebulous piece of fluff whipped up to meet a print deadline.
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lvrofwolves1 year, 4 months ago
We went to Canada last week, a few years ago we got 1.32 for our dollar, last week we got 1.05
when we went to Europe last September, we brought back some Euros, couldn't believe how much US $ we got back for those! can't remember what the exchange rate for it was back then, but we were shocked.
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wildman65571 year, 4 months ago
Commonly, people look at only what is happening right now or in the next quarter. Right now, things look pretty good. However if we look at history, we may be in for some problems a few years down the road.
There are two dark clouds: The Federal Deficit and the Current Accounts Deficit. If we look at history, the last time we were running a Federal Deficit like we are now (adjusted for inflation) was during the Vietnam War. Things went along pretty well then too, until the bottom fell out under President Ford with 12 % inflation. (No it wasn't under Carter that the inflation started)
If we look at the history of large Current Accounts Deficits, they always have ended with currency collapse. That is not good news for us. Of course, things are different here since we have such a large economy and our currency is used as the trade currency around the World. But still, they have always collapsed in the past. Always.
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alxnsc1 year, 4 months ago
The US Dollar got cheaper by 36% since 2001. Well, the expert dealer is happy with this as he is buying dollars. And he is buying dollars as the USA is buying goods abroad to support the troops abroad.
The reason for US Dollar to get cheaper is obvious and its name is "war"...
The cheaper dollars the poorer Americans and their allies, the happier financial dealers...
"Stay the course..."
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evelyna1 year, 4 months ago
They are going to change the currency. First they will drain everyone's investments and make a lame "correction" excuse.
Flat??? We have a negative currency. At the end of the payweek we almost owe the boss a paycheck.
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getreal11 year, 4 months ago
All I can say is that a piece of bubble gum is four times what it use to be.
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