Skip to comments.US Dollar has sunk to record lows against Euro
Posted on 11/27/2004 10:24:13 AM PST by soccer_linux_mozilla
The United States trade deficit is soaring and the once high-flying dollar has sunk to record lows against Europes common currency.
The dollars record low against the euro coincided with the governments report that the United States was running a trade deficit through September at annual rate of 592 billion dollars. That compares with last years record 496 dollars billion. As a result, the country is having to borrow almost 600 billion dollars from overseas this year to pay for the imported cars, televisions and other items Americans are buying.
This type of article isn't even looked at by the 'true' FReeper Republicans because "The Man" can do "NO WRONG".
"Specie is the most perfect medium because it will preserve its own level; because, having intrinsic and universal value, it can never die in our hands, and it is the surest resource of reliance in time of war." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:430
"Paper is poverty,... it is only the ghost of money, and not money itself." --Thomas Jefferson to Edward Carrington, 1788. ME 7:36
"Experience has proved to us that a dollar of silver disappears for every dollar of paper emitted." --Thomas Jefferson to James Monroe, 1791. ME 8:208
"It is a [disputed] question, whether the circulation of paper, rather than of specie, is a good or an evil... I believe it to be one of those cases where mercantile clamor will bear down reason, until it is corrected by ruin." --Thomas Jefferson to John W. Eppes, 1813. ME 13:409
Dangers of Paper Money (quotes of THOMAS JEFFERSON)
"That paper money has some advantages is admitted. But that its abuses also are inevitable and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied. --Thomas Jefferson to Josephus B. Stuart, 1817. ME 15:113
"The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals... it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted." --Thomas Jefferson to John W. Eppes, 1813. ME 13:430
"Scenes are now to take place as will open the eyes of credulity and of insanity itself, to the dangers of a paper medium abandoned to the discretion of avarice and of swindlers." --Thomas Jefferson to Thomas Cooper, 1814. ME 14:189
"The States should be applied to, to transfer the right of issuing circulating paper to Congress exclusively, in perpetuum." --Thomas Jefferson to John W. Eppes, 1813. ME 13:276
"The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then, we must be content to return quoad hoc to the savage state, to recur to barter in the exchange of our property for want of a stable common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers." --Thomas Jefferson to John Adams, 1819. ME 15:185
"Private fortunes, in the present state of our circulation, are at the mercy of those self-created money lenders, and are prostrated by the floods of nominal money with which their avarice deluges us." --Thomas Jefferson to John W. Eppes, 1813. ME 13:276
"It is a cruel thought, that, when we feel ourselves standing on the firmest ground in every respect, the cursed arts of our secret enemies, combining with other causes, should effect, by depreciating our money, what the open arms of a powerful enemy could not." --Thomas Jefferson to Richard Henry Lee, 1779. ME 4:298, Papers 2:298
"I now deny [the Federal Government's] power of making paper money or anything else a legal tender." --Thomas Jefferson to John Taylor, 1798. ME 10:65
Darn. Does this mean more European tourist coming to our lovely shores this summer?
Anyone seen George Soros lately?
Thank God for Hamilton & we didn't listen to Jefferson!!!
Note your toons don't reflect what is really going on. It is not government spending per se, that is resulting in the collapse of the dollar. Rather it is a synergistic symptom. It is the PRIVATE spending on foreign products, instead of domestic. They are using U.S. dollars to buy these products. In order to prop up the value of the dollar, we need to balance currency accounts with loans from abroad. This of course only staves off the inevitable. And will make the final situation worse. The CATO-ite Free Traitors will destroy the basis for capitalism in the U.S. The currency will be collapse, all commodities will de-couple from the greenback, and nobody in the U.S. will be able to afford Mideast oil, Australian iron, Canadian timber, Japanese ships & electronics, or Chinese TVs, Taiwanese PCs, etc.
Right now, the only thing that could save the U.S. economy is if Captain Nemo and the Nautilus sank all 500 of the Chinese Container Freighters brimming over with junk en route to the U.S. ports.
Europe cannot sustain it's collective strength for a variety of reasons but the biggest one is demographic. They are slowly dying and becoming Islamic. As this trend continues they become less and less productive. We actually may have to bail them out in the next 50 years.
PLEASE! Do you know anything about this?
Since 2001 we've been in Europe, and I innocently assumed that after the Irak war the dollar would soar! I can't understand how this is good for america that her currency has tanked. Especially as a strong dollar has always been touted as a GOOD thing in prior years.
Jekyll Island Ping
In November 2004, the euro broke through the magic mark of $1.30 per euro. This represented a decline of 52 percent of the dollar against the euro since early 2002, when the euro had reached its lowest point. Comments by Alan Greenspan, Secretary of the Treasury John Snow and others have left the impression that the decline may not be over yet.
Yeah. It sucks that Bush won reelection, doesn't it?
Advantages of a Weak Dollar
1. Can help U.S manufacturing exporters, making their goods cheaper abroad.
2. Since the weak dollar causes American companies to sell more products cheaper abroad, this will reduce the U.S. trade deficit.
3. Overall a weak dollar can boost U.S output.
4. A weaker dollar can possibly lead to more jobs
Disadvantages of a Weak Dollar
1. A weak dollar can lead to higher interest rates.
2. A weak dollar can lead to higher inflation.
3. Imports become more expensive. This can hurt companies that import production components.
4. Less capital inflows by foreign investors
Advantages of a Strong Dollar
1. Imports are cheaper as there is a greater "purchasing power."
2. Lower inflation
3. Lower interest rates
4. When traveling abroad, the U.S dollars exchanges for more foreign currency.
5. A strong dollar encourages investment in U.S. equities and corporate bonds among foreign investors. These capital inflows from foreign investors benefit U.S companies.
Disadvantages of a Strong Dollar
1. Exports become more expensive, as there is a higher cost overseas for American products.
2. Increased U.S trade deficit.
3. Reduced U.S output
4. Foreign travelers find the U.S. more costly.
I think a "strong dollar" policy will always outweigh the advantages of a weak dollar.
Question to all.
What instruments or currency pairs would you take positions in to stay on the right side of these events?
In theory. In practice, there is a dynamic response to these normal reactions.
Against Europe it may work, except they subsidize the difference...ala AirBus.
And as against the Chinese, they just continue to ban private Chinese currency trading, and escalate their currency interventions against the dollar with foreign governments (currently $120 billion a year they are willing to lose money on). Meanwhile, the Chinese government keeps stalling when pressured to float the yuan. Why would they do that, since it is costing them $120 billion a year to keep their currency down? They were Supposed to do something to start floating four years ago. Chinese yuan/Remimbi has inflated how much against the dollar in the last 4 years? Zilch. I am beginning to think that a counter-U.S. strategy of inflating the Yuan with a reciprocal currency intervention program is essential if we don't start tariffing the hell out of China right away. But their private citizen currency trading restrictions make this difficult, as we are not really selling much of anything to them...except our factories we are closing down.
We need to be realligning our treasury and trade strategy more with Reagan's. As one of the architects of that strategy, I commend the following authors: Dollar's Value In Jeopardy
Paul Craig Roberts
Tuesday, Nov. 16, 2004
Chinas currency peg to the U.S. dollar prevents correction of the U.S. trade imbalace and imperils the dollars role as reserve currency.
In the post World War II period, the dollar took over the reserve currency role from the British pound, because the supremacy of U.S. manufacturing guaranteed U.S. trade surpluses.
The British pound lost its role due to debts of two world wars, loss of empire, a run down industrial base, and socialist attack on UK business.
The reserve currency conveys unique advantages on the favored country. As the reserve currency, the U.S. dollar is guaranteed a high level of demand.
Foreign central banks hold their reserves in dollars, and countries are billed in dollars for their oil imports, which requires other countries to buy dollars with their currencies.
As a reserve currency fulfills world needs in addition to the functions of a domestic currency, the favored country can hemorrhage debt for a protracted period on a scale that would promptly wreck any other countrys currency.
This advantage is a two-edged sword, because it permits the reserve country to behave irresponsibly by running large trade and budget deficits. When the tide turns against the reserve currency, its exchange value collapses.
The reason for the collapse is the huge stock of reserve currency held by foreigners. When other countries conclude that their hoards of dollars represent claims that the U.S. cannot meet, dollar dumping begins.
Financing for U.S. debt dries up; interest rates rise; imported goods become unaffordable and living standards fall.
Flight from the dollar is already underway.
During the past two years, the U.S. dollar has declined 52% against the new European currency, the Euro. This decline is striking in view of the sluggish European economy and the fact that many analysts regard the Euro as merely a political currency.
Indeed, the dollar is declining against all currencies that have any international standing: the British pound, the Canadian dollar, the Australian dollar, and even against the Japanese yen despite Tokyo's intervention to support the dollar.
Overcome by hubris and superpower delusion, U.S. policymakers are unaware of Americas peril. Economists and pundits are equally in the dark.
Economists believe that decline in the dollars exchange value will correct the U.S. trade deficit by reducing imports and increasing exports.
Once upon a time a case could be argued for this logic. But that was a time before U.S. corporations took to outsourcing jobs and locating production for U.S. markets offshore.
U.S. imports of goods and services rise each time a U.S. factory moves offshore or a U.S. job is outsourced. Goods and services produced offshore by U.S. corporations for U.S. customers count as imports and worsen the trade deficit.
The U.S. cannot reduce its trade deficit by increasing sales to China of goods made by U.S. firms in China. As Charles McMillion, president of MBG Information Services, concisely summarizes: Outsourcing is export substitution.
It is amazing that U.S. policymakers and economists do not understand that dollar devaluation is meaningless as long as China keeps its currency pegged to the dollar.
Americas greatest trade imbalance is with China. In 2000 the U.S. merchandise trade deficit with China became larger than the chronic U.S. trade deficit with Japan.
By 2003 the U.S. trade deficit with China was almost twice as large as the U.S. deficit with Japan: $124 billion versus $66 billion. This year the U.S. trade deficit with China is expected to be $160 billion, a 29% increase from last year.
This imbalance cannot be corrected as long as China maintains the peg. As the dollar falls against the Euro and other currencies, the Chinese currency falls with it, thus maintaining Chinas advantage over U.S. goods in world markets.
Both the Clinton and Bush administrations are guilty of permitting China to maintain a grossly undervalued currency that sucks productive capacity out of the U.S. The combination of cheap Chinese labor and an undervalued currency are destroying U.S. middle class living standards.
As Americas industrial base erodes, so does its competitiveness and ability to close its trade deficit through exports.
Currency markets cannot correct the undervalued Chinese currency, because China does not permit its currency to be traded and there are insufficient stocks of Chinese currency in foreign hands with which to form a currency market.
Sooner or later the peg will come to an end - perhaps when China fulfills its WTO obligation to let its currency float.
When the peg ends, it will deliver a severe shock to U.S. living standards. Suddenly, Chinese manufactured goods - including advanced technology products - on which the U.S. is now dependent will cost much more.
Overnight, shopping at Wal-Mart will be like shopping in high-end department stores.
China accounts for a quarter of the U.S. trade deficit and for one-third of the U.S. deficit in manufactured goods, is the second largest source of U.S. imports after Canada, and is Americas third largest trading partner as conventionally measured.
Despite these facts, the U.S. government does not publish full current account data for China, instead lumping China in with Other Countries in Asia and Africa. This keeps the magnitude of the problem out of sight.
Canada and Mexico rank as the U.S.s two largest trading partners because of double counting in the measure of imports and exports. For example, the full value of auto bodies shipped across the borders to Canada and Mexico for assembly operations are counted as exports when they leave the US and as imports when they return.
In contrast U.S. trade with China involves almost no double counting of component parts.
Recently, Goodyear Tire and Rubber Company declared its intention to close all U.S. plants and to manufacture offshore for US markets. Each time the U.S. loses an industry, Americas export potential declines and Americas imports rise. This scenario guarantees a rising trade deficit and the end of the dollars reserve currency role.
Dr. Roberts, was Assistant Secretary of the Treasury for Economic Policy during 1981-82, and Economics Advisor to the NSC, to President Reagan through 1988.
We should be so lucky. Only problem is that it will be the affluent EuroSnobs who likely will be running around sniffing at the lowly American middle class, and loudly complaining about Jesus Country.
US produced goods and services become more competitive in the global market
The 45 Trillion dollar debt gets easy to deal with since the real value of 45 trillion dollars is less with a devalued currency.
Everything gets more expensive, since your dollar is worth less after being devalued you have to fork over more of them to buy stuff.
Interest rates go up, since nobody wants devalued dollars you have to raise interest rates to make them attractive to investors.
Americans get poorer, foreigners get richer, the buying power of foreigners goes up and the buyer power of Americans goes down.
In general weak currencies are bad news for those holding them. In particular a weak dollar is bad news for Americans, since prices will rise but pay checks (for most) will not. Should the fall of the dollar get really bad, and there is no reason to think it will not, then we might find that our paycheck buys about as much as any other third world worker paycheck. Which buy the way, as many of us have pointed out over the last several years is the plan. No way the US can compete in the global market with a high paid work force, so Gov decided it is time for a pay cut, hence the falling dollar.
Hope that helps.
The real issues are the velocity of change and the frictional costs along the way. For some years now, the gloom and doomers have been arguing that we could not possibly survive the strong dollar, as our whole productive apparatus was going offshore. Now the doom and gloomers, many of them the same people as before, will argue that we cannot possibly survive a weak dollar. Apparently we are dead one way or the other.
I for one hope for a relatively smooth adjustment, though I recognize there are no guarantees. One ace in the hole the U.S. currently possesses is that we have had a somewhat greater degree of political discipline than most other major nations. Yes, we've let spending slip, but we still have the freest labor market among the majors, the most flexible, diversified, and balanced economy, among the lowest barriers to trade and, in general, a greater facility for change. The U.S. economy seems to be able to adjust while the central planners elsewhere are freezing things in place with controls while they try to formulate their strategy. So now the dollar is adjusting. Fine; we've been saying the trade deficit was unsustainable, and this is how it corrects. Let the rest of the world suck up ourexports for a change. The aggregate flows have to balance sooner or later. Let it begin. We'll manage.
Ah, but they won't. All they want from us is the technology, and the industrial infrastructure. Once fully transferred, its over baby. They are not about to help us restore our industrial foundation. They will keep us down, and kick us...good and hard. Laughing all the while at the foolish free traitors who ignored the fact we were dealing with an Mercantilist Communist Industrial Piracy.
U.S. Moving From First to Third World
Paul Craig RobertsIn the early 1980s, when I was assistant secretary of the treasury, the U.S. trade deficit was due to oil imports.
Wednesday, Oct. 20, 2004
The United States is ceasing to be a manufacturing country. America has a trade deficit in almost every manufacturing product.
Comparing the first eight months of this year to the first eight months of last year, our trade deficit in manufacturing products increased by 16 percent. In iron and steel mill production, it increased 146 percent.
The United States has a trade surplus in corn, cotton, wheat, scrap metal and animal feeds. The only manufacturing products in which the United States has a (small) trade surplus is airplanes and scientific instruments.
Since 1985, the U.S. trade balance with China has deteriorated from balance to a deficit of $160 billion. Who has the high-tech economy, and who has the Third World economy? Normally, Third World countries run trade deficits with high-tech countries.
Charles McMillion, president of MBG Information Services, notes that the U.S.-China trade relationship is the most unequal in the world. The United States has a trade deficit with China in almost every industry code. The U.S. deficit in advanced technology products with China is astounding.
How was it possible for China, alone in world history, to outpace the most advanced country on earth? Was China elevated to the forefront by U.S. firms who moved their production for the American market to China in order to take advantage of essentially free labor?
Americans no longer produce the "American goods" that they consume. American incomes are falling, as economist Joseph Stiglitz recently pointed out. When the dollar gives way, as Dallas Federal Reserve Bank President Robert McTeer says it must, Americans will not be able to purchase the goods and services that American firms produce abroad with foreign labor.
U.S. firms will have to sell their offshore-produced wares to the labor that produces them. "Cheap foreign goods" will be beyond the reach of Americans, whose country is in rapid transformation from a superpower to a Third World economy.
COPYRIGHT 2004 CREATORS SYNDICATE, INC.
Thanks for that article Paul.
Makes it very clear how dangerous this trend really is.
He was the lesser of two evils. 52 to 48 against an extremely liberal northeast senator is pathetic.
But it stinks that he won, doesn't it?
Nothing beats a sound or stable dollar that fluctuates with an efficient market. In theory that's what the Bush administration supports, but in reality it's nothing more than a Clintonian promise. Currency policies whether strong or weak cause problems in the long run when they are taken too far, which is almost always the case.
If the dollars crashes and the middle class goes broke I wonder who they will blame in the next election and who they will not reelect.
Could this be the dollar crash? Maybe, is a dollar crash coming absolutely. We had a chance, with the budget in balance, to get ourselves out of this mess with real world trade policy. But the GOP turned into a borrow and spend machine that even put the democrats to shame. That coupled a with HUGE, unbelievable trade deficit is just too much for the dollar to bear.
Will Bush like Hoover get blamed for a crash and stick us we another 60 years of socialist Democratic rule? Keep your eye on the dollar.
--the worlds businesses that is, while the doom and gloomers will manage to be scared. Take that "SCARY" chart in 'post#1' (please). Of course if we look at the rest of it we can see that the exchange rates are simply coming out of an excessive peak. IMHO the reason that these clowns can get away with this crap is because they know that both the democ s and the noisiest of the freepers will just lap this stuff up.
|You can bet that if Kerry were elected, they'd be using these very same numbers to announce that the international markets are liberating us from the terrible Bush economy and taking us back to the our lost glory days of the wonderful '90's..|
It is truly frightening how close they came. We were not confronted with merely a liberal northeast senator. He was classified as "the most liberal U.S. senator by voting record". Actually He was far more an "anti-american" whose radicalism is carefully modulated to conceal his true allegiances. And the MSM of course found him "their Man in Washington."
It is also not an accident he was endorsed by the Communist Party U.S.A. (CPUSA).
Meanwhile the U.S. history courses in high schools across the country are indoctrinating America's youth with a horribly-skewed hatefilled anti-American diatribe against our country. Then the lefties wonder why the youth vote is not terribly interested in voting. As Dennis Prager has observed, the Left is undermining democratic (small d) morale wherever it goes.
GWB has already presided over one Hoover-like crash, and thanks to 09/11 he got through it.
But the bad news is that if the dollar tanks the GOP will be blamed, and they deserve alot of the blame, and the GOP will be finished as a polical party. No one is going to vote for the party that put them in the poor house, no one.
The dot com bubble was nothing compared to that is right around the corner, how does a 25% or 50% or more pay cut sound to you.
I have to also add that Carter was an idiot (big surprise) for running a weak dollar policy.
And while you're at it, look up a long term chart of the CRB index.
I don't know about that. The GOP and politicians in general are pretty good at shifting blame (see Jamie Gorelick), especially with the "new tone in Wahington," where it's clearly big government vs the little people. GWB has done an excellent job of blaming his pathetic economic performance of 2001-2002 on Martha Stewart and 09/11.
A wet bird doesn't fly at night, folks. This piper will be paid. Do the math. Follow the money. The velocity of raw materials marginalizes the endogenous variables.
Until the Congress wakes up and the people demand accountability, what goes up must come down. The founding fathers never heard of M3. They would be spinning in their graves if they knew we even had M2. If you bought a suit with a Roman denarius in 45 BC, you could still be wearing that suit today. Because you'd be dead!
It was all spelled out by Heckel and Jeckel. The bankers are like magpies. Whoever has the gold makes the rules. We're doomed, I tell ya. When all the food is gone and the Chinese are passing out chopsticks, don't say you weren't warned. Depreciation of the currency is like the marginal utility of hamburgers, and we won't even have those. Look it up... the Federal Reserve isn't even in the phone book.
This article is the clear result of what "The Man," to whom you appear to be referring, has been doing on the spending front, the past few years--and this is before the real kicker, kicks in--i.e. Medicare Drug entitlements. The chart and article show only the low foothills of what is coming.
I know that some, both around here and in the Conservative talk show circuit, do not want to admit the reality, but the differences between Bush and Kerry were far less extreme than the differences between Bush and a real Conservative. If Bush was 10% more Conservative than Kerry, he was still at least 50% more liberal than any one who really champions traditional American values. As I stated in rejecting each of them, in the recent election, neither Bush, nor Kerry, nor Nader, would have been fit to groom George Washington's horse--nor carry ice for Jefferson's ice house. (I will admit, that I just thought of the Jefferson's ice house quip. It was not part of my denunciation in the recent carnival of moronic 30 second sound bites.)
Those who want a leader so badly that they attribute characteristics to politicians, that those politicians do not possess, need to take a long, hard look, at the unpleasant realities of our times. The real issues, such as the fate of the Dollar were largely ignored in the recent election--just like immigration and certain external, but significant unmentioned realities of this world in which we live.
We have failed in our duty to preserve what wise men vouchsafed to us, because we have allowed demagogues and ideological manipulators to create political taboos, which absolutely rule out an effective defense of that heritage.
>>Yeah. It sucks that Bush won reelection, doesn't it?<<
Are you stupid, crazy or just being a wiseass??
The fact that the President Bush was re-elected hasn't done a thing for the US dollar except weaken it. Kerry's win probably would have done the same. No fiscal benefit from either of them. Security wise....the borders are still open, aren't they?
Who do you think keeps Wall Street moving? Foreign investors that's who. Would you buy stocks in an American company when you see that the value of the dollar and hence the value of the company is declining.
"The decline in the dollar stems from several factors, including foreign investors' increased nervousness about putting their money into the USA when America is running continualy humongous trade and budget deficits. These are considered serious risks to the U.S. economy because the dollar is down 20% since '99."
Or perhaps you live in a gold house on gold property. I hope you have thanked God for your intelligent investment moves because if you don't their value has declined.
The dollar is down 8.5% in the last six months against a basket of major currencies, according to Federal Reserve data. Yes you have lost 8.5% of your net worth in six months.
Now, if you are flatass broke, living in government supported housing and drawing benefits from every agency that gives them out, why do you care? I wouldn't either. Continue to preach the Party line. You'll only look foolish to large investors.
"Ryan Goan, president of Standish, Maine-based Verdia, which makes natural skin care products and supplements, says his costs have gone up 10%-15% in the past year. He buys fish oils and essential oils from Germany, Norway and other European countries: "Every time I place an order for raw materials, the prices have increased."
Sure, a weaker dollar abroad makes U.S. goods less expensive, but if the foreign consumers are not in the mood to spend money, U.S. firms will not benefit.
Competition among companies worldwide is so strong that firms abroad are meeting the decline in the value of the dollar by cutting costs and prices to continue to compete. That reduces any advantages all U.S. companies may have gained from the weakened dollar.
Foreigners aren't like us. They have a hard time sleeping when their credit cards are maxed out, so they cut back in their buying, of everything!
We are the largest country with the largest debt in the world and we have a falling economy because out outsourcing and other factors. Not looking the best I have seen it.
Bill, you do say it so much better than I do. Thanks
The Dollar deserves to "crash," as it has been propped up above its Market value for decades by Europe, Asia, and India.
And the higher that the Dollar is propped up, the cheaper it is for Americans to purchase foreign goods instead of American products.
In a free Market, a nation's currency will adjust based upon its foreign trade surplus or deficit. A nation that exports more than it imports will see its curency rise. Notice however, that China's currency hasn't risen.
And a nation that imports more than it exports will see its currency decline until its trade deficit declines. Notice that the U.S. trade deficit hasn't declined.
So we *aren't* in a free market because the Chinese Yuan hasn't risen and because the U.S. trade deficit hasn't declined.
That means that governments are intervening in the currency market.
China, for instance, is hoarding $500 Billion in U.S. Dollars. India has another $88 Billion. Japan has even more. Europe, more Dollars still.
By hoarding all of those Dollars, they create an artificial shortage of something that is in reality present in abundance: the Dollar.
By creating that artificial shortage, they cause demand for the Dollar to be artificially high. That artificial demand makes the Dollar worth more than what a free market would value it.
That extra value of the Dollar enables Americans to purchase more foreign goods than a free market would normally allow.
Thus, the propped up Dollar serves as a stealth subsidy for all foreign imports.
Killing that foreign subsidy will hardly be a bad thing, as you errroneously claim above.
FINALLY, someone who gets it.
Let's start a discussion of instruments that can be owned to insulate one's portfolio from the coming devaluation. It's an open-ended request. I am interested in knowing which equities, mutural funds, ETFs, currency pairs and futures should be owned or shorted.
If a strong currency is so wonderful then why are the Europeons whing so loudly about their Euro?
If the dollar crashes the GOP will be blamed for run away spending, huge trade deficits and loss of high paying jobs that bought about the crash.
Look, I hate to just pound on you, but that's just ignorant.
A Dollar "crash" would eliminate our trade deficit.
Let's put your urban myth to bed:
Right now, the U.S. Dollar buys 8.28 Chinese Yuans. If the Dollar crashes, your U.S. Dollar might buy as few as 1 Chinese Yuan. That means that the Chinese flashlight that you just bought at Wal-Mart last year for $1 will suddenly cost you $8.28.
In other words, the farther that the Dollar crashes, the MORE that Chinese products will cost.
The more that Chinese products cost, the LOWER our trade deficit will go (because Americans will be buying fewer Chinese products).
So don't let me catch you claiming again that a Dollar crash would somehow do the opposite by mysteriously INCREASING our trade deficit, as that is the opposite of what would happen in reality.
You've now been educated. You now know better. If you spout such nonsense again, you'll be outed as a troll-spewing propagandist.
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