GTaudiophile
Lifer
A few weeks ago, 1 ? would buy "only" $1.25 USD. Now it is at $1.40.
What news of late is causing the USD to deflate?
What news of late is causing the USD to deflate?
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What is it with the $ tanking against the ? these days?
- Thread starter GTaudiophile
- Start date
LegendKiller
Lifer
MOre silly thoughts that Europe is in a better position than the US. I guess they haven't checked out what's happening with Italy, Spain, Germany, Poland, and the remainder of the former soviet bloc states.
soccerballtux
Lifer
Those guys don't have much of an economy, a lot of European states run banks; finance; produce little else. They're dependent on the American economy doing well.
JeffreyLebowski
Lifer
Yes it does. More money in circulation = money worth less.
GTaudiophile
Lifer
Or it could simply be the "lost faith in America" thing. That enough can devalue a currency.
Wild speculation is that there may be a move in anticipation of countries like China buying less US debt - something that's reportedly already quietly started.
It seems a pretty clear picture that the old saying 'power tends to corrupt' was followed when the US got power after WWII to be the dominant global currency, and then proceeded to spend so far beyond its means so as to move from the world's biggest creditor to the biggest debtor and run the risk now of crashing even further.
Nothing like 'narrow short-term interests' getting to hijack the nation's political system for the purpose of enabling bad economic policies that benefit them.
It seems a pretty clear picture that the old saying 'power tends to corrupt' was followed when the US got power after WWII to be the dominant global currency, and then proceeded to spend so far beyond its means so as to move from the world's biggest creditor to the biggest debtor and run the risk now of crashing even further.
Nothing like 'narrow short-term interests' getting to hijack the nation's political system for the purpose of enabling bad economic policies that benefit them.
LegendKiller
Lifer
That is but one piece of the puzzle. Relative thought on value and assets purchased is also another.
The US is about to put up an extra 100$ billion dollars of treasury bonds by the end of next week. Crude oil is going higher, and the effect of all of the bailout money and stimulus money actually going out on the market is starting to have its effect. In reality, the dollar should never have shot up like it had, it was seen as a safe haven when the stock market plummeted for little reason other then fear. Reality is setting in.
The canadian dollar is at 89 cents now. It went down to 78 cents for little reason, beforehand it was actually at par before the stock crash.
The canadian dollar is at 89 cents now. It went down to 78 cents for little reason, beforehand it was actually at par before the stock crash.
BTW there are fears of US potentially losing their AAA credit rating, after Britain just had their AAA rating scrutenized for the first time in 30 years.
http://www.reuters.com/article.../idUSTRE54L5BX20090522
http://www.reuters.com/article.../idUSTRE54L5BX20090522
heyheybooboo
Diamond Member
When the dollar is devalued, asset prices re-inflate.
Paulson (and Bernanke) set this in motion last Fall. Faced with a deflationary global economy this was the best they could come up with. A few folks were paying attention and predicted the Q2-09 devaluation.
Them furriners will be able to buy more of our stuff hopefully 'igniting' the US economy (and inflation).
It looks like the current plan (if it works) is to slowly begin cranking the discount rate starting next year to combat the inflationary pressures - with some predictions of 4-5% by the end of 2011.
Paulson (and Bernanke) set this in motion last Fall. Faced with a deflationary global economy this was the best they could come up with. A few folks were paying attention and predicted the Q2-09 devaluation.
Them furriners will be able to buy more of our stuff hopefully 'igniting' the US economy (and inflation).
It looks like the current plan (if it works) is to slowly begin cranking the discount rate starting next year to combat the inflationary pressures - with some predictions of 4-5% by the end of 2011.
Here's a little tool I wrote: http://fxconsulting.oanda.com/...-price-movements.shtml
Funny thing is, when I was writing this last summer, the volatilities used to be about half of what they are now.
Funny thing is, when I was writing this last summer, the volatilities used to be about half of what they are now.
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