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Back in October I posted:

The euro is the John Kerry of currency. It's only value is in opposition to the dollar.

(Well, I also made an anology about Anna Kournikova and the euro... something about an absence of the proper male reaction... Maybe that's why that thread was pulled.)

If the dollar and the U.S. economy were as weak as is said up and down the planet, gold should be in the 800s and the euro should be pushing the British pound out of its way like a runaway train. The euro can hardly get to the next stop, much less take over from the dollar. There is no alternative to the U.S. dollar.

So who thought the President was blowing it out the backside with yesterday's "strong dollar" announcement? Lol! He wouldn't have said a thing if he didn't already know what was going to happen next. Although he would have been right, he wouldn't have looked good had he said it a month ago. Timing is everything.

The Administration has played this one out beautifully. They wanted a weak dollar, but not too weak. Now, they're pulling it back up -- but not too much.

What do you (or anyone) think about this:

The money supply should be enlarged as much as possible without causing undo inflation. How the dollar pegs against other currencies is of little interest because the total amount of dollars available will be greater, even if an individual dollar is worth less.

So if the dollar continues to fall, it matters little as long as inflation remains stable.

Are the above statements correct?

Seriously, what are you or that guy who wrote that article talking about? Have you looked at a chart recently? The euro gained ten us-cent in a little more than a month. It hit record highs every day for a whole week, no profit taking, no other setbacks, no nothing. Of course it can't go on like that forever, eventually people start realizing their profits.

But that doesn't change the fundamental data, that still clearly indicates a further deterioration of the dollar, not only against the euro, but also against every other currency around. The USA needs to attract $1.8 billion a day in foreign investments. That is just to keep the rates steady, not to talk about a return to the old strength of the Dollar. This takes up 3/4 of all the savings of all the people on this planet every year, how long do you expect this to work?

This never was much of a euro strength, but a dollar weakness. The Euro just happens to be the only real alternative to the dollar, thats why there's so much babbling about it and why it rose a little more than most other currencies.

And don't even attempt to bring Bush into this. Besides talking and maybe putting some pressure on China to revalue the Yuan there really isn't much he can do about the exchange rates. (And he did say it a month ago, a year ago, all the time since the dollar started falling, it just doesn't change anything.)

Only the big central banks could stop the fall of the dollar for a while by a joined intervention in the currency market, but even that would only slow things down, not reverse the trend. The dollar needs to continue to fall until the current account deficit is either closed or at least is down to a sustainable level.