The dollar disaster in one picture

Marketwatch ^ | 10/19/2010 | Kurt Brouwer

[WebFocus]

The dollar disaster is not exactly new news. In fact, it has been going down and down for a long time as this chart illustrates. The chart tracks the dollar versus major currencies back to the year 2000. The Federal Reserve had begun raising short-term interest rates in 1999 to beat back the roaring economy. In 2001, the economy fell into recession and then suffered the severe blow of the September 11 attacks. At that point, the Fed dropped interest rates to stimulate the economy. Reducing short-term interest rates also generally weakens the dollar.



The blue line shows short-term fluctuations in the dollar and the red line shows the actual long-term trend. As you can see, the dollar was gaining strength in 2000 due to higher short-term interest rates. The blue line began falling in 2002 when the Fed dropped interest rates and the dollar has generally been down ever since. There is nothing in the cards to suggest that this might change.

Right now, the Federal Reserve and the U.S. Treasury are walking hand in hand down the road of good intentions. Those intentions are to jump start the economy by keeping short-term rates at or near zero. In addition, the Treasury is pushing for a weaker dollar to boost exports. It may do just that, but a weaker dollar also means that U.S. consumers pay more for all imported goods.

[Celtic Cross]

Ouch...

[Bean Counter]

Here's another chart that goes hand-in-hand with that one...

[wolfman23601]

Looks like the dollar has nowhere to go but up. When we get 0bama out and get a plan in place for austerity, the dollar is going to skyrocket. In the grand scheme of things and as bad as it is, our debt situation is better than the rest of the Western world and Japan. The fundamentals of the dollar are still much stronger than the Euro, Pound, or Yen. Only difference is that they have austerity plans.

[Citizen Tom Paine]

Speaking as a math minor that trend line is intellectual masturbation. Recall that figures don’t lie, but liars figure. One would like to know why a linear trend line was chosen, how the foreign currency values were averaged, how the various currencies values were weighed, and how many points were uset to fit the data. Error estimates would also be nice to see.

IMHO the Federal Reserve should be repealed. The dollar as much as possible should be put on the gold standard (and silver). Politicians that diddle with the dollar’s value should semmarly be removed from office. Declining dollars is really stealing from those that save without the gun.

[pingman]

But austerity means pain, and we don’t like pain. Well, not much, anyway.

[the invisib1e hand]

every picture might tell a story, but some only tell half the story.

There might be lots of reasons to worry about the dollar, but that incomplete graph isn't necessarily one of them.

The big pictures shows we've been here and done this:

[the invisib1e hand]

imho, the threat to the dollar isn't the price by itself. it's any impending "crisis" that will kick the SDR's into gear, subsuming the dollar into a global composite currency.

[editor-surveyor]

> “ Federal Reserve had begun raising short-term interest rates in 1999 to beat back the roaring economy.”

.
I read that far, and had to stop.

There was no “roaring economy” in 1999. We had entered a long, grinding recession at the end of ‘97, and the only thing holding the economy up in ‘99 was Y2K activity.

The dollar is, as it has been for a long time, being deliberately driven down by the Fed’s printing presses. Presently they are trying to print Obama’s debt out of existence through inflation.
.

[Democrat_media]

The real U.S. debt is over a hundred trillion dollars.

http://ezinearticles.com/?What-is-the-Total-Unfunded-Liability-of-the-US-Government?&id=3531013

“the total amount of the unfunded liability comes out to just over 100 trillion dollars”

Real unemployment 20%.

Democrats/socialists have grown this government for for 130 years. Only now that democrats are in power AND the Internet is here can we see what Democrats have been doing for that 130 years. The liberal media had a monopoly before 1994, the last time a democrat Congress had power.

Of course Republicans won’t be able to fix this mess in a few years (unless they have a super majority). So the shills for democrats here and in the media will scream “It’s Republicans’ fault”.

[WebFocus]

RE: There was no “roaring economy” in 1999.

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I bet you also believe that the budget surplus at the end of last century was an illusion....

If so, I’d like to read your reasons.

[editor-surveyor]

> “Politicians that diddle with the dollar’s value should semmarly be removed from office”

.
Politicians that diddled with the dollar’s value removed a politition that resisted such diddling actions, with great prejudice, on November 22, 1963.
.

[Democrat_media]

The real U.S. debt is over a hundred trillion dollars.

http://ezinearticles.com/?What-is-the-Total-Unfunded-Liability-of-the-US-Government?&id=3531013

“the total amount of the unfunded liability comes out to just over 100 trillion dollars”

Real unemployment 20%.

Democrats/socialists have grown this government for for 130 years. Only now that democrats are in power AND the Internet is here can we see what Democrats have been doing for that 130 years. The liberal media had a monopoly before 1994, the last time a democrat Congress had power.

Of course Republicans won’t be able to fix this mess in a few years (unless they have a super majority). So the shills for democrats here and in the media will scream “It’s ALL Republicans’ fault” .And , ignoring the last 130 years, many will believe that media lie.

[editor-surveyor]

> “I bet you also believe that the budget surplus at the end of last century was an illusion”

.
And I bet that you believe that the government’s obligation to segregate, and invest Social Security Payroll Taxes is an illusion...

.

[WebFocus]

RE: And I bet that you believe that the government’s obligation to segregate, and invest Social Security Payroll Taxes is an illusion...

---

Are you talking about the “obligation” or what’s really going on?

Social Security as it stands now, is a PONZI scheme. There, I said it.

Now back to the budget surplus of the end of the 20th century if you please...

[Democrat_media]

Marxist Bill Clinton did more damage to the Economy than anyone . I can write a book about this. And this was with the Republican Congress restraining this Marxist.

Just a couple of reasons:

1.Size of government increased greatly during Clinton 8 years .

1. Economy crashed in 2000, it's last year.

2. dot com bubble.

3. Clinton made it easier for people to qualify for social security and medicare. Cynically it did this at the end of its term. This was the “government growth” under Bush.

4.Clinton made the Community reinvestment act much worse which caused the current banking crash.

5. NAFTA

6.Allowed unfair trade with China which set up the deindustrialization of the U.S..

7. tried to impose socialist healthcare on the American people.

8.raised taxes

9. created the home base for illegal immigration . Let in so many illegals that they reached critical mass here.

10.....10000000000 read my upcoming book ( If I ever have time to write it

[Democrat_media]

Your liberal media talking point that the budget was somehow a surplus for 1 or 2 years Of the REPUBLICAN CONGRESS with marxist big government clinton as president means NOTHING even if true as most other years of Clinton were deficits and the government grew tremendously during the 8 years of lady Clinton. Oil went to $10 a barrel and the dot com bubble is what caused this supposed surplus. who cares about that even if true as the government grew so much and then look at all the subsequent problems Clinton’s actions led to in the following years.

Marxist Bill Clinton did more damage to the Economy than anyone . I can write a book about this. And this was with the Republican Congress restraining this Marxist.

Just a couple of reasons:

1.Size of government increased greatly during Clinton 8 years .

1. Economy crashed in 2000, it's last year.

2. dot com bubble.

3. Clinton made it easier for people to qualify for social security and medicare. Cynically it did this at the end of its term. This was the “government growth” under Bush.

4.Clinton made the Community reinvestment act much worse which caused the current banking crash.

5. NAFTA

6.Allowed unfair trade with China which set up the deindustrialization of the U.S..

7. tried to impose socialist healthcare on the American people.

8.raised taxes

9. created the home base for illegal immigration . Let in so many illegals that they reached critical mass here.

10.....10000000000 read my upcoming book ( If I ever have time to write it

[editor-surveyor]

What “budget surplus” could exist in the face of a balancing act that consumes SSPT receipts on general ledger?
.

[GOPJ]

The real U.S. debt is over a hundred trillion dollars.

Real unemployment 20%.

Chilling.

[editor-surveyor]

.
Crickets...
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