The US DOLLAR...and other Economic and Finanical matters...

Bitko

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I was talking to my banker a month ago, and he(a swiss ofcourse) told me that the dollar has been going down over the past 50 years, and this is not something that has been happening lately. But he also told me that starting 2005 it would go up and stay up for a while, and then go back to its course of sliding down. It was difficult for Mr. Bush to coerce some of the Asian countries in pegging their currency against the dollar, I fear that he might bring out the guns next time the dollar starts sliding against asian currencies.
 

bone

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they could have the dollar go up again, but that wouldn't be all that good. america has the highest depts since ages, but when the dollar would increase in value, those depts would only grow bigger

(bush recently said he was going to do nothing to counter the defaltion)
 

Bitko

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Beats me, can't really find a prescritption for the dollar. If you try to raise it, then export falls, and if you let it fall then it loses confidence as a currency. The reason for this is related to job loss or outsourcing, mainly because of the availability of cheap labour in Asia. One way to combat this is not to bring those jobs back, but the governments direct involvement in raising education standard and training, so that new high tech companies can get workers in US rather than going to Asia. So instead of bringing back outsourced jobs, the US should create new jobs and create a modern labour force to tackle those jobs. A broke US economy is not only bad for Americans, but its implications will be felt by every other country of the world.
 

SiR_dude

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It will only take one Asian country, say, China, to "unpeg" its currency against the US dollar, and we will have a big problem on our hands......and a gut feeling says it's going to happen within 2 years.....
 

Dr. Woo

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I wouldn't worry about the dollar. Predictions say the dollar will be at its current low for a while, then rebound slowly. Fine for me...I get paid more when the dollar is low. 8)
 

bigfoot1942

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and what i read recently:
(translated from dutch to english using babelfish)

Euro falls considerably compared with dollar

7 January 2005 21.09

AMSTERDAM - the rate of the euro compared with the dollar has considerably decreased Friday to the lowest level in six weeks. currency traders wrote that to reasonable figures concerning the labour market in the United States, observations of the American Minister for Finance, John Snow, and technical factors.

The rate of the euro went friday morning initially up to 1.3250 dollar. In the course of the afternoon the judgements of Snow and the labour market figures ensured a sharp fall up to 1.3040.

The close in Amsterdam was with 1.3060 what higher, but a penny less than the lock of 1.3185 on Thursday. With respect to the record level of last week Thursday (1.3667) the euro has fallen with six pennies or 4.4 percent.
source: http://www.nu.nl/news.jsp?n=465531&c=30
 

Bitko

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China, nor Japan, would do that all of sudden, they both hold huge amount of US Dollar, if they do that they will only be hurting themselves. If they want to get rid of US Dollar they have to do that very gradually. The US is a huge consumer, wishing ill about its eoconomy is not very prudent, because it will hurt rest of the world. The significance of the American consumer base can only be reduced if the economy in Asia keeps its pace and disposable income increases in that region.
 

SiR_dude

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^Agreed about the falling dollar hurting world economy, but I still think that China would, if it could, send the dollar packing. I don't think the economy out there is going to slow down anytime soon, and even if it takes several years, sooner or later I think they'll be the economical powerhouse that US used to be.
 
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