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US dollar gaining strength at an astonishing rate

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Link
The 15-nation euro dipped as low as $1.2736 in morning trading before rising slightly to $1.2873, down from $1.3003 late Tuesday in New York.
Remember it was 1.58 a few months ago.

and
the British pound bought $1.6326 Wednesday compared with $1.6560 Tuesday, its lowest mark against the dollar since September 2003
Also, it wasn't long ago that $1 USD bought $.92 CAN, which was its weakest. Now $1USD buys $1.25 CAN, its strongest in a long time. I still have some student loans I had decided I sure as hell wasn't going to pay off on that negative exchange, feeling it was going to rebound. It clearly has, and by quite a bit!
 

SP33Demon

Lifer
Jun 22, 2001
27,929
141
106
Originally posted by: Skoorb
Link
The 15-nation euro dipped as low as $1.2736 in morning trading before rising slightly to $1.2873, down from $1.3003 late Tuesday in New York.
Remember it was 1.58 a few months ago.

and
the British pound bought $1.6326 Wednesday compared with $1.6560 Tuesday, its lowest mark against the dollar since September 2003
Also, it wasn't long ago that $1 USD bought $.92 CAN, which was its weakest. Now $1USD buys $1.25 CAN, its strongest in a long time. I still have some student loans I had decided I sure as hell wasn't going to pay off on that negative exchange, feeling it was going to rebound. It clearly has, and by quite a bit!
Glad to hear this news. Further evidence that we should enact my $7 Trillion proposal, i.e. $20,000 (fck Bush's measly $600) for each person (who pays taxes) in the U.S... Do it while other countries are doing worse than us and dollar will barely blink in strength. ;)
 

halik

Lifer
Oct 10, 2000
25,696
1
0
Long term this trend is sure to reverse, given our budget and CA deficits, but hey right now we're doing better than europe!
 

dphantom

Diamond Member
Jan 14, 2005
4,511
140
106
Not unexpected. The US dollar still is THE safe haven. And I expect teh dollar to maintain its strength relative to other currencies as Europe is pumping currency into its financial system at a rate similar to the US.
 

Xavier434

Lifer
Oct 14, 2002
10,377
1
0
This sort of thing sounds great from the outside looking in, but isn't this greatly attributed to deflation which if left unchecked and uncontrolled could become very dangerous for us economically? I do not claim to be an expert in this area and I am not trying to suggest that we currently do not have control over it. I just know that something similar happened that led us into the Great Depression, and I cannot say that it doesn't worry me considering how rapidly our econ has been fluctuating. It feels like anything but stability.


Deflation Wiki
 

Genx87

Lifer
Apr 8, 2002
41,061
494
126
LK predicted this 3-4 weeks ago. If he is around he can better explain why it happened.
 

mshan

Diamond Member
Nov 16, 2004
7,868
0
71
I saw commentary before that dollar was a currency, like yen, used for carry trade type investments (to Aussie dollar and other higher yielding currencies, I think), and appreciation may reflect unwinding of higher risk appetite type trades put on in the past that people no longer want to be involved in.

 

ICRS

Banned
Apr 20, 2008
1,328
0
0
This is because people still view U.S Treasuries as the safest investment. What do you need to invest in treasuries, you need USD. So people are flocking to treasuries and in doing so raising the USD value.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: halik
Long term this trend is sure to reverse, given our budget and CA deficits, but hey right now we're doing better than europe!
I don't think you'll see a huge fall relative to most major currencies. Why? Because everybody is in the same boat. The only reason why the dollar fell as fast as it did was because investors thought the US was delinked from the world economically, that the Fed was taking unilateral actions that no other major central bank would have to take, and that was hurting the dollar.

However, once reality set in that the US is *NOT* delinked from the world, that this problem is one of ALL major countries, not just directly through US investments, but also that the credit spree went on in every country (Canada had their own ABCP problem stemming from extendable ABCP, Spain with their own housing bubble, Germany, France, England, Australia, Italy...etc).

The only currency to really strengthen against the dollar was the Yen, but only that because the unwinding of the carry trade.

After people realized that every major CB would take the same actions as the Fed, there was a rationalization. Europe went into recession faster and deeper and will probably take many more years to get out of it than the US. The CAD went down so quickly because oil has dropped in price, making the alberta sands less attractive, not to mention that the rest of Canada's economy is natural resource driven, all of which is dropping in demand as the world enters recession.

Everybody has to keep in mind that currency valuation is a relative valuation, a low tide will lower all boats.

Personally, I love the fools who thought gold would keep going higher. It's such a stupid assumption that I am sure gold traders are loving all of the fools. You can't eat gold, you can't drink gold, you can't pay your car loan in gold. Gold was already over-valued during the commodity bubble, to think it'd keep going higher, outside of any rationalized demand driven price, is just stupid.

Same thing with oil.

Where are the RPBs now? Isn't monetary "inflation" supposed to be sinking the dollar, driving massive inflation, driving demand for commodities, and leading us into Mad Max Beyond Thunderdrome?

RPB knowledge of real-world economics is about as laughable as Palins knowledge of international diplomacy. Just because they can read blogs, and she can see Russia, doesn't mean jack shit when it comes down to reality.
 

halik

Lifer
Oct 10, 2000
25,696
1
0
Originally posted by: LegendKiller
Originally posted by: halik
Long term this trend is sure to reverse, given our budget and CA deficits, but hey right now we're doing better than europe!
I don't think you'll see a huge fall relative to most major currencies. Why? Because everybody is in the same boat. The only reason why the dollar fell as fast as it did was because investors thought the US was delinked from the world economically, that the Fed was taking unilateral actions that no other major central bank would have to take, and that was hurting the dollar.

However, once reality set in that the US is *NOT* delinked from the world, that this problem is one of ALL major countries, not just directly through US investments, but also that the credit spree went on in every country (Canada had their own ABCP problem stemming from extendable ABCP, Spain with their own housing bubble, Germany, France, England, Australia, Italy...etc).

The only currency to really strengthen against the dollar was the Yen, but only that because the unwinding of the carry trade.

After people realized that every major CB would take the same actions as the Fed, there was a rationalization. Europe went into recession faster and deeper and will probably take many more years to get out of it than the US. The CAD went down so quickly because oil has dropped in price, making the alberta sands less attractive, not to mention that the rest of Canada's economy is natural resource driven, all of which is dropping in demand as the world enters recession.

Everybody has to keep in mind that currency valuation is a relative valuation, a low tide will lower all boats.

Personally, I love the fools who thought gold would keep going higher. It's such a stupid assumption that I am sure gold traders are loving all of the fools. You can't eat gold, you can't drink gold, you can't pay your car loan in gold. Gold was already over-valued during the commodity bubble, to think it'd keep going higher, outside of any rationalized demand driven price, is just stupid.

Same thing with oil.

Where are the RPBs now? Isn't monetary "inflation" supposed to be sinking the dollar, driving massive inflation, driving demand for commodities, and leading us into Mad Max Beyond Thunderdrome?

RPB knowledge of real-world economics is about as laughable as Palins knowledge of international diplomacy. Just because they can read blogs, and she can see Russia, doesn't mean jack shit when it comes down to reality.
No doubt US is doing better comparatively in the current crisis, which is the main driver for the currency appreciation.

Actually the dollar depreciation was some what somewhat inevitable, when you look at the APPP or RPPP indices, U.S. was out of whack in the late 90s, early 2000s. (The BigMac index don't lie!) and it still is out of whack. In the LR, purchasing parity has to be equal or at least equal with some factor that accounts for services and transport costs.

Who knew my international finance classes would be handy for ATP&N :)

 

rchiu

Diamond Member
Jun 8, 2002
3,846
0
0
Well I hope Obama and the democrats don't f this up by handing out matching trillion stimulus/bailout or whatever you call it for the small people. We will have strong dollar as long as the current crisis isn't ended. However, too much debt, as well as the signal from the government to go into heavy borrowing, will still hit USD in the short run.
 

palehorse

Lifer
Dec 21, 2005
11,521
0
76
Originally posted by: LegendKiller
Where are the RPBs now? Isn't monetary "inflation" supposed to be sinking the dollar, driving massive inflation, driving demand for commodities, and leading us into Mad Max Beyond Thunderdrome?

RPB knowledge of real-world economics is about as laughable as Palins knowledge of international diplomacy. Just because they can read blogs, and she can see Russia, doesn't mean jack shit when it comes down to reality.
LAWL!! so true!
 

brandonb

Diamond Member
Oct 17, 2006
3,731
2
0
Originally posted by: LegendKiller

Where are the RPBs now? Isn't monetary "inflation" supposed to be sinking the dollar, driving massive inflation, driving demand for commodities, and leading us into Mad Max Beyond Thunderdrome?

RPB knowledge of real-world economics is about as laughable as Palins knowledge of international diplomacy. Just because they can read blogs, and she can see Russia, doesn't mean jack shit when it comes down to reality.
I'm sure the dollar will sink even further a year from now. At that point you'll be crying for a bailout (like you were a month ago) and the cycle repeats.
 

Moonbeam

Elite Member
Nov 24, 1999
67,499
4,170
126
Originally posted by: LegendKiller
Originally posted by: halik
Long term this trend is sure to reverse, given our budget and CA deficits, but hey right now we're doing better than europe!
I don't think you'll see a huge fall relative to most major currencies. Why? Because everybody is in the same boat. The only reason why the dollar fell as fast as it did was because investors thought the US was delinked from the world economically, that the Fed was taking unilateral actions that no other major central bank would have to take, and that was hurting the dollar.

However, once reality set in that the US is *NOT* delinked from the world, that this problem is one of ALL major countries, not just directly through US investments, but also that the credit spree went on in every country (Canada had their own ABCP problem stemming from extendable ABCP, Spain with their own housing bubble, Germany, France, England, Australia, Italy...etc).

The only currency to really strengthen against the dollar was the Yen, but only that because the unwinding of the carry trade.

After people realized that every major CB would take the same actions as the Fed, there was a rationalization. Europe went into recession faster and deeper and will probably take many more years to get out of it than the US. The CAD went down so quickly because oil has dropped in price, making the alberta sands less attractive, not to mention that the rest of Canada's economy is natural resource driven, all of which is dropping in demand as the world enters recession.

Everybody has to keep in mind that currency valuation is a relative valuation, a low tide will lower all boats.

Personally, I love the fools who thought gold would keep going higher. It's such a stupid assumption that I am sure gold traders are loving all of the fools. You can't eat gold, you can't drink gold, you can't pay your car loan in gold. Gold was already over-valued during the commodity bubble, to think it'd keep going higher, outside of any rationalized demand driven price, is just stupid.

Same thing with oil.

Where are the RPBs now? Isn't monetary "inflation" supposed to be sinking the dollar, driving massive inflation, driving demand for commodities, and leading us into Mad Max Beyond Thunderdrome?

RPB knowledge of real-world economics is about as laughable as Palins knowledge of international diplomacy. Just because they can read blogs, and she can see Russia, doesn't mean jack shit when it comes down to reality.
I think you are being too rational. Gold is indeed totally useless and worthless, but so is great art. People are irrational animals, like birds that pick up pretty pieces of colored items to decorate their nests. Gold affects the psyche of man in an inexplicable and irrational way. Gold bars just bring this sense of satisfaction to heft in your hand. The love of gold is somehow, I think, organic, maybe because it's the color of the sun.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: brandonb
Originally posted by: LegendKiller

Where are the RPBs now? Isn't monetary "inflation" supposed to be sinking the dollar, driving massive inflation, driving demand for commodities, and leading us into Mad Max Beyond Thunderdrome?

RPB knowledge of real-world economics is about as laughable as Palins knowledge of international diplomacy. Just because they can read blogs, and she can see Russia, doesn't mean jack shit when it comes down to reality.
I'm sure the dollar will sink even further a year from now. At that point you'll be crying for a bailout (like you were a month ago) and the cycle repeats.
Want to put 100 euros on that, at the current exchange rate? I thought I'd pick that so you can feel like you wouldn't get "toilette paper" back.
 

bamacre

Lifer
Jul 1, 2004
21,030
1
61
Originally posted by: LegendKiller
Want to put 100 euros on that, at the current exchange rate? I thought I'd pick that so you can feel like you wouldn't get "toilette paper" back.
He should have been more clear with his statement. Fall compared to what?

Fall compared to other currencies? Not likely, because just as you stated earlier, "we're all in the same boat," i.e., all those currencies are fiat currencies just as ours'. And all those CB's are doing the same thing we are.

And with all the new money being created, in due time, the dollar, and other currencies, should fall in value. Whether or not incomes can increase at the same or better rate is the question.

And if not, then Moonbeam would be better off with some gold in his pocket. Art just isn't as convenient to carry around. :p
 

andy04

Senior member
Dec 14, 2006
999
0
71
any good website where I can trade currency with opening balance of only 1 or 2 k $s?
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: bamacre
Originally posted by: LegendKiller
Want to put 100 euros on that, at the current exchange rate? I thought I'd pick that so you can feel like you wouldn't get "toilette paper" back.
He should have been more clear with his statement. Fall compared to what?

Fall compared to other currencies? Not likely, because just as you stated earlier, "we're all in the same boat," i.e., all those currencies are fiat currencies just as ours'. And all those CB's are doing the same thing we are.

And with all the new money being created, in due time, the dollar, and other currencies, should fall in value. Whether or not incomes can increase at the same or better rate is the question.

And if not, then Moonbeam would be better off with some gold in his pocket. Art just isn't as convenient to carry around. :p
Fall compared to what?
 

bamacre

Lifer
Jul 1, 2004
21,030
1
61
Originally posted by: LegendKiller
Originally posted by: bamacre
Originally posted by: LegendKiller
Want to put 100 euros on that, at the current exchange rate? I thought I'd pick that so you can feel like you wouldn't get "toilette paper" back.
He should have been more clear with his statement. Fall compared to what?

Fall compared to other currencies? Not likely, because just as you stated earlier, "we're all in the same boat," i.e., all those currencies are fiat currencies just as ours'. And all those CB's are doing the same thing we are.

And with all the new money being created, in due time, the dollar, and other currencies, should fall in value. Whether or not incomes can increase at the same or better rate is the question.

And if not, then Moonbeam would be better off with some gold in his pocket. Art just isn't as convenient to carry around. :p
Fall compared to what?
I think I answered that question in the last sentence.
 

Atreus21

Lifer
Aug 21, 2007
12,007
571
126
Originally posted by: Genx87
LK predicted this 3-4 weeks ago. If he is around he can better explain why it happened.
I took a macro course awhile back. Teacher was a PhD. She said something that's stuck with me: That the US was deliberately devalueing its currency, and that it would be coming back soon.

I don't remember what her reasoning was for that tho. Any econ buffs know of a reason to intentionally devalue your currency?
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: bamacre
Originally posted by: LegendKiller
Originally posted by: bamacre
Originally posted by: LegendKiller
Want to put 100 euros on that, at the current exchange rate? I thought I'd pick that so you can feel like you wouldn't get "toilette paper" back.
He should have been more clear with his statement. Fall compared to what?

Fall compared to other currencies? Not likely, because just as you stated earlier, "we're all in the same boat," i.e., all those currencies are fiat currencies just as ours'. And all those CB's are doing the same thing we are.

And with all the new money being created, in due time, the dollar, and other currencies, should fall in value. Whether or not incomes can increase at the same or better rate is the question.

And if not, then Moonbeam would be better off with some gold in his pocket. Art just isn't as convenient to carry around. :p
Fall compared to what?
I think I answered that question in the last sentence.
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.

 

udneekgnim

Senior member
Jun 27, 2008
247
0
0
Originally posted by: Atreus21
Originally posted by: Genx87
LK predicted this 3-4 weeks ago. If he is around he can better explain why it happened.
I took a macro course awhile back. Teacher was a PhD. She said something that's stuck with me: That the US was deliberately devalueing its currency, and that it would be coming back soon.

I don't remember what her reasoning was for that tho. Any econ buffs know of a reason to intentionally devalue your currency?
it's to increase the amount of exports versus imports

devaluing currency will make exported products more attractive internationally against competing similar products due to lower price and imported products will be at a higher cost state side
 

bamacre

Lifer
Jul 1, 2004
21,030
1
61
Originally posted by: LegendKiller
LOL, gold again. Wow, a market priced item which is controlled by the whims of gold producers, not by the host economy. It has no real value and realistically sucks as any kind of backing for currency. It is artificial economically.

Fail.
Tell that to someone who lives in Zimbabwe. :p

Or you know, maybe you're right, gold may not be very useful. I don't think it burns as well as paper. :D
 

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