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Topic: That poor poor dollar...
| Author | Message |
| UGoGirl | Posted – 7/19/2007 9:57:28 AM | show profile ... falling. The Canadian dollar is now worth about 96 cents to one US dollar. Just a couple of years ago it was only worth about 75 cents to the US dollar. And people wonder why things seem like they're getting more expensive! |
| LotusBlossom | Posted – 7/19/2007 12:00:44 PM | show profile Almight Dollar Yep. And look at the euro. We're going to have to go to Zambia or Guinea to get a bargain. |
| keltoi2 | Posted – 7/19/2007 12:10:46 PM | show profile And the Euro and British pound just set new records against it. Poor little guy.... |
| UGoGirl | Posted – 7/19/2007 11:30:26 PM | show profile I'm just waiting for the day when the Canadian dollar is worth more than the US dollar. Has that ever happened? Here's another issue, I can't help feeling there's a correlation between the value of the dollar and the cost of crude oil (which is traded in dollars). Being a global market, the price of oil has to go up as the value of the dollar falls. The end result is that it becomes a lot more expensive for us here in the US versus other parts of the world. Certainly serves us right. |
| ejlyman | Posted – 7/20/2007 6:44:06 AM | show profile | email poster woe is me From a guy who mostly earns in dollars and mostly pays bills in euro, this really gets me where it counts. I see the weak dollar as a lack of confidence in the U.S. Foreign governments used to hold foreign reserves in dollars and used to buy shares in U.S. companies, etc. As confidence in the U.S. falls, those dollars get sold and supply and demand dictates that the dollar weakens, prompting more selling, more weakening, etc. We keep reading about the Chinese proping up the dollar to keep their experts reasonably priced. What if they stop doing that? It might cost $1.30 to buy a Canadan dollar then. And there isn't an easy fix. Even if confidence improves these investments won't come back. Changing currencies on that scale is expensive, which is why they hung on so long. And what incentive does the government have to defend the dollar by buying it on world markets? The U.S. trade deficit is already expanding too quickly ... it would only grow faster if the products became more expensive and imports less expensive because of a newly-robust dollar. Arrrgh! ------ Italy-based freelancer www.ericjlyman.com |
| UGoGirl | Posted – 7/20/2007 9:56:05 AM | show profile They shouldn't have confidence in the dollar. We have gone way way over our heads in debt, and keeping the printing presses making more and more money doesn't help. Some would like the U.S. dollar to fall so American goods will be cheaper. But what do we make here anymore? People who say this is the same old argument we've had for decades and decades haven't looked at the data. This is not a pretty picture: http://www.internetional.se/uscurr70s05.gif Nor is this: http://policy.heritageblogs.org/images/2006/05/SeniorEntitlementComplex.png |
| Stanley_Milgram | Posted – 7/20/2007 10:03:08 AM | show profile same here: earn dollars, spend euros. I'm watching my money becoming more worthless by the day. I'm starting to build a clientele that pays in the local currency, but so far, it's just small change. At least I'm not in Italy. Man, that place is expensive! |
| UGoGirl | Posted – 7/20/2007 10:14:16 AM | show profile I feel bad for you two, if you were earning euros and living in dollars you'd be in fat city. It must be particularly hard since it fluctuates day by day. You could easily be effectively making 20% just due to dollar decline within a year. |
| UGoGirl | Posted – 7/22/2007 11:46:00 AM | show profile 13.2 percent tumble under Bush? Oh, okay. Apparently it's a GOOD thing that the dollar is tumbling. What's up is down, bad is good .... Never mind that American businesses and infrastructure are being bought up one by one by foreigners... and that the little people are all becoming poorer... If it's good for Coca Cola, it must be good for me. **** Dollar's Bear Market Slide More Boon Than Bane for George Bush By Bo Nielsen July 23 (Bloomberg) -- Everyone from Nobel Prize laureates to the world's biggest bond investor says the Bush administration has reason to cheer the dollar's slide to historic lows. The currency has lost 13.2 percent since January 2001, when George W. Bush took office, the most under any president since at least Gerald Ford, who left the White House in 1977. ... A weaker dollar is helping the economy and may bolster voters' confidence in the Republican party as the U.S. heads into a presidential election year. Rather than causing foreigners to flee U.S. securities, the depreciating currency is making American goods less expensive abroad and helping offset the worst housing recession in 16 years. Exports reached an all-time high of $132 billion in May, the government said this month. "The early line of the George Bush administration was that we want a strong dollar," said Paul Samuelson, the 1970 recipient of the Nobel Prize in economics and professor emeritus of economics at the Massachusetts Institute of Technology in Cambridge, Massachusetts. Over time "they began to want a depreciated dollar," he said. ...Treasury Secretary Henry Paulson's stance hasn't changed since he said in May that "a strong dollar is in our nation's interest..." The Treasury has stuck to its strong-dollar mantra for the past decade. The dollar set a new low of $1.3843 per euro last week, and is the weakest in 26 years versus the British pound. A U.S. tourist heading to England will pay more than $2 for one U.K. pound, up from about $1.65 at the end of 1997. Against the Canadian dollar, it's the lowest since 1977 and it's the weakest in seven years versus Brazil's real. "A weak dollar is in the interest of the United States and in fact the world economy,'' as a means of spurring demand for U.S. goods at home and from abroad, said Jan Hatzius, chief U.S. economist at Goldman, Sachs & Co. in New York. ...The 13.2 percent tumble under Bush compares with a 18.3 percent gain under Bill Clinton and declines of 0.2 percent under George H. W. Bush, 0.4 percent under Ronald Reagan, 3.0 percent under Carter and 2.3 percent during Ford's tenure, the Fed's U.S. Trade-Weighted Real Broad Dollar Index shows. ...The potential for an even weaker dollar may sour investors on the world's biggest economy, said David Malpass, chief economist at Bear Stearns & Co. in New York. "People want to invest into strengthening currencies," said Malpass, who worked in the Treasury Department under Secretary James Baker. ... Bloomberg |
| mailbag | Posted – 7/22/2007 12:25:31 PM | show profile | email poster Ugo - read the story on Ron Paul in today's NYT. (No, I have not copied his conservative stance on econ and the dollar.lol. Although on many issues I thought I was reading about me!) Pay special note to his views on the dollar and Federal Reserve. |
| Stanley_Milgram | Posted – 7/22/2007 12:26:28 PM | show profile I don't get this lede. It says all these people (nobel laureates, etc.) have reason to cheer the u.s. dollar's slide, but none of the quotes, with the exception of some paraprasing of the "government's" position has anything remotely positive to say. WTF??? |
| UGoGirl | Posted – 7/22/2007 12:59:00 PM | show profile Mailbag, Ron Paul is a one-of-a-kind. He's been talking about the fiat currency problem and looming dollar crisis for a very long time, more than any other elected American leader that I'm aware of. Stanley, I don't really understand this either... on the federal government wanting but not wanting a weak dollar, how about this take. They know they have to "say" they want a strong dollar so people don't quickly ditch dollars (which would be very very bad...). So they say they support a strong dollar. They also "say" they support a strong dollar since a strong dollar offers more purchasing power to Americans, especially since 90% of the crap we buy is from overseas. However, they "think" the only way they can hope to get out of this deficit problem is to reduce the value of the dollar. In addition, a weaker dollar can be good for some businesses that want to sell more of our crap overseas. In my view, a weak dollar makes it much more expensive for us Americans just to get by (think of the price of oil and gasoline, and corresponding cost of food since food production and transport is so energy intensive -- and the dollar falls more) and results in the selling off of America to foreign companies and governments. |
| mailbag | Posted – 7/22/2007 1:30:56 PM | show profile | email poster Weak dollar against our imports do increase when the importer country's currency rises. Interesting that the price of oil is now at its highest, but gasoline isn't. Weak dollar lowers the cost of our goods (what the hell do we make anymore) but there is one issue these goobers don't take into account: USA sentiment is lower now than ever before. We are an evil country in the eyes of many.... Stanley, since you are in Germany, a friend of mine said more people are refusing to buy USA brands. (He is staunchly anti-USA so perhaps a clouded view.) Any truth to this that you see? |
| Stanley_Milgram | Posted – 7/22/2007 1:54:29 PM | show profile I understand the argument for a weak dollar, such as it is. What I don't understand is a lede of an article saying all these people, including nobel laureates, say the administration has reason to cheer the decline, when only one of the quotes (the Goldman-Sachs guy) has anything remotely positive to say. Indeed the quote of the nobel laureate only describes what the govt has been saying and doesn't offer a value judgment of whether that's good or bad or right or wrong. The rest of the people quoted actually say the declining dollar is bad. RE: Germany. Well, while you don't have to go to far to hear anti-American sentiment (although I've never experienced any directed at me, personally, btw), I've not really heard of anything resembling a boycott. It's not uncommon, however, to hear people say, "I would never go to America. Not even for a visit." |
| mailbag | Posted – 7/22/2007 2:48:28 PM | show profile | email poster "Stanley.... 'I would never go to America. Not even for a visit.'" lol. Exact words. You must know my friends. :-D How did you get there btw? I tried in 2004 and the Hamburg immigration office told me to go home, the guy wouldn't even consider accepting my paperwork. The German friend who was with me at that moment slammed the guy for bringing in Turks and not me. They argued in German for a bit and we then left. I then went to Paris to try to immigrate there instead. |
| Stanley_Milgram | Posted – 7/22/2007 3:43:08 PM | show profile Well, I didn't have any trouble at all. Two short visits to the auslanderbehorde and that was that. First to fill out some paperwork and talk to some woman. She told me to come back at a specific time and date and to bring bank statements with me. I did so and was given one-year residency, renewable. Next time, when I renew, I'll almost certainly get three years. The joke of it was, that I didn't have that much money in the bank and the proof of insurance I showed them (a Blue-X card) could have been in my possession long after I stopped paying the premiums. Mind you, I didn't ask for permission to seek employment in Germany. THAT is tough. |
| UGoGirl | Posted – 7/22/2007 4:14:33 PM | show profile Stanley, you're absolutely right. There is no support at all for the first line in the article: "Everyone from Nobel Prize laureates to the world's biggest bond investor says the Bush administration has reason to cheer the dollar's slide to historic lows." Everyone?? So Caterpillar and Coca Cola, a former Bushie, and Jan at Goldman Sachs. Is that everyone?? Ha! *** Everyone from Nobel Prize laureates to the world's biggest bond investor says the Bush administration has reason to cheer the dollar's slide to historic lows. ..."The early line of the George Bush administration was that we want a strong dollar," said Paul Samuelson, the 1970 recipient of the Nobel Prize in economics and professor emeritus of economics at the Massachusetts Institute of Technology in Cambridge, Massachusetts. Over time "they began to want a depreciated dollar," he said. ..."A weak dollar is in the interest of the United States and in fact the world economy," as a means of spurring demand for U.S. goods at home and from abroad, said Jan Hatzius, chief U.S. economist at Goldman, Sachs & Co. in New York. Peoria, Illinois-based Caterpillar Inc., the world's biggest maker of earth-moving equipment, said last week the dollar's drop added $198 million to its sales in the second quarter. ...Coca-Cola Co., the world's biggest soft-drink maker, said the weaker dollar increased its operating income by about $60 million last quarter.... "We saw a positive impact from currencies,'' in particular the dollar versus the pound and euro, Coca-Cola Chief Financial Officer Gary Fayard said on a conference call on July 17. The dollar's "trend will be down over the next couple of years," said Richard Clarida, a former assistant Treasury secretary under Bush and now a global strategist at Pimco. The firm manages $687 billion, including the $102 billion Total Return Fund. "A weaker dollar in conjunction with strong demand in the rest of the world is helping the U.S. rebound." |
| UGoGirl | Posted – 7/22/2007 6:07:02 PM | show profile If this trend continues (being paid in dollars rather than Euros) you'll be in the poorhouse before you know it. If my calculations are right, in the year 2000, $100 got you over 117 Euros. Today, that same $100 would only get you about 72 Euros, over a third less. |
| mailbag | Posted – 7/22/2007 7:54:10 PM | show profile | email poster 56% return As I was living there then (and employed) the French franc didn't switch until 1 Jan. 2002. I just tried to find the historical figures and could not. So, memory has to serve. If in 2001 $1 bought about 7.5-FF, it looks to me that 1-FF bought 15-cent-euro which was a frozen rate since turnover. If I had $100,000 -- bought 750,000-FF on 30 Dec. 2001, that would have turned into 112,500-Euro or $155,600 today. That of course is without any interest -- just FF/Euro sitting in a safety deposit box -- the return would be 56%. Not bad. Any idea how many people from here did that? Ooooh, I'd love to know. |
| UGoGirl | Posted – 7/24/2007 12:10:33 PM | show profile According to Bloomberg, we may see parity between the US and Canadian dollar in 2 or 3 months (first time in 31 years -- why I say to get used to the 70s again). And today the dollar at record low against the Euro again. Gulf coast countries are debating whether they should be pegging their currencies to the dollar. All very very interesting... |
| UGoGirl | Posted – 7/24/2007 12:20:47 PM | show profile Here's an article (especially for you mailbag) on monetary reform: *** http://www.globalresearch.ca/index.php?context=va&aid=6401 U.S. Treasury Secretary Henry M. Paulson, Jr., has joined the chorus of those in high places who are warning of a major worldwide economic downturn. Paulson was quoted at length in a July 23, 2007, article in Fortune by Rik Kirkland entitled, ?The Greatest Economic Boom Ever: Enjoy It While It Lasts.? Paulson?s remarks came in the context of assessing the ability of the highly-leveraged equity, hedge, and derivative markets to withstand the shocks to come. He told Fortune in an interview: ?We haven?t had a global financial shock since 1998. I believe that these large and dramatic increases in private pools of capital and in the credit derivatives markets since then have helped manage and disperse risk and make the economy more efficient. When we do have one?and it?s when, not if; that?s not me being negative, it?s just that we?re not going to defy economic gravity?we?ll be seeing for the first time how some of these instruments perform under stress.? The Fortune article notes that the fate of the global economy depends in large measure on the ability of the U.S. consumer to continue to buy what the rest of the world produces. But, as Fortune indicates, the economic fundamentals continue to move in the wrong direction. The U.S. current account deficit, they point out, continues to plunge, heading toward the $900 billion mark, almost nine percent of GDP. U.S. household debt as a percentage of personal income has shot up almost thirty-five percent since 2000. While real income stagnates for the U.S. middle class, asset and commodity prices are surging, with gasoline prices leading the way and the Goldman Sachs Commodity Index doubling since 2001. Financing in the business world is increasingly shaky, with loans to companies with ?junk? credit ratings soaring from under $50 billion a year in 2001 to over $200 billion in 2006. ...The only Republican who speaks to broad economic issues is Ron Paul, who has called for the Federal Reserve to be abolished as a step toward financial sanity. We?ll see how Dr. Paul, a long-shot to say the least, fares in the Republican primaries. Party kingmakers are terrified of his rising grassroots support. ...How deeply any candidate will penetrate in his or her analysis is another question. The U.S. economy is groaning under a total societal debt load for individuals, households, businesses, and government of over $45 trillion. There is a gap between personal income and GDP of more than $3.5 trillion per year, with people having to run up ever-more household debt just for the necessities of life. With so many jobs outsourced, our population no longer even comes close to being able to purchase the amount of goods and services needed to sustain the economy. The real answer is wholesale monetary reform. ...It is past time for monetarism to be recognized as the flop it truly has been and thrown on the junk-heap of history where it belongs. It should be replaced by a mixed program of credit management reminiscent of the New Deal but with additional features suited to today?s vastly changed reality. (See article for details on monetary proposals...) ...As New Zealand monetary reformer William Hugh McGunnigle wrote recently on an internet discussion site, ?Basically today we are attempting to run a 21st century economy using financial tools that are five centuries out of date. It is like trying to control a sophisticated modern jumbo jet using the control mechanisms appropriate to the machines of World War I. The whole system is unstable, and the larger it becomes the more likely it is that it will collapse, simply because those controlling it have no inclination to prevent that collapse. We have learned nothing from the financial disaster of 1929-1934.? |
| mailbag | Posted – 7/24/2007 2:00:34 PM | show profile | email poster Thanks Ugo. Dr. Paul has the right idea for moving ahead. Global control will fail. So, eliminate the controlling interests. Now, what I'd like get my hands on is how much this White House is bribing countries not to switch to euro or any other stable currency.... Euro is most likely candidate only because it has little debt and true mineral value. |
| UGoGirl | Posted – 9/14/2007 11:18:36 PM | show profile Well Stanley looks like you keep getting a little poorer still with the dollar hitting a record low against the Euro in the last day or two. Over here, the dollar also keeps falling against the Canadian dollar. Unbelievable. In January 2003 the Canadian dollar was worth 63 cents. Now it's worth 97 cents. We all just keep getting poorer and poorer... |
| Stanley_Milgram | Posted – 9/15/2007 12:02:20 PM | show profile yes, I'm well aware of the pathetic slide of the dollar. I've started pulling in clients and publications that pay in euros. I've opened a bank account here and move as much money over as I can. Even dollars kept in a high yeild CD at around 5% barely keep pace with the devaluation. Eventually, the tanking of the U.S. economy will take the rest of the developed world down into the toilet with it. All there is to do I guess is live it up while you can. |
| UGoGirl | Posted – 9/15/2007 6:51:22 PM | show profile You are right at that. I've come to believe our economic model of constant growth is unsustainable. Not to say we can't all be happy, but we're sure going to be poorer than the generation before ours. In the U.S., we've got our massive debts, the retiring baby boomers (who will suck up our federal budget with SS and medicare), a hell of a lot we'll need to invest to reduce greenhouse gas emissions and to mitigate impacts, an infrastructure that's well into collapse, decades worth of chronic energy shortages. The only thing that keeps me from falling into despair from all of this is the fact that I'm trying just a little bit to do something. I feel I have at least a little control, even if it's just over my garden, my work, etc. That and a renewed sense of spirituality (not organized religion). |
