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Milkman

I did a search for some threads about this topic, that I thought existed. After 2 searches nothing came up. I'm trying to learn more details about the international aspect of the dollar, T-bills, gold-backing and current account deficits, and the shifting a foreign currency reserves in USD. I'm aware that the US dollar is down since 2000. But where will it go from here, today, in 2008. I've been reading and watching Peter Schiff and Ron Paul, and am trying to learn more.

I look forward to any comments, opinion, articles, and videos on this topic.

Here is the first of many YouTubes. The presenter seems professional and knowledgeable. This doesn't mean he correct, but he may be correct, or partially correct.

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panama hat

Not a decline nor a collapse. The USD will return to 'normal', with fluctuations within six months or less.

No hard data on that, just discussions with people smarter than me.

I believe there are so many parameters that delving into them all to find a conclusion would drive you nuts.

Your best bet may not be youtube, rather the WSJ or FT

mad_dog

I have noticed that the dollar's decline and more importantly its irratic change in value has made the Euro a more attractive reserve currency to some governments and investors. But I don't think we have seen the death of dollar economies, which span the globe from El Salvador to Cambodia, quite yet.

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Spin

Marc Faber of the Gloom, Boom and Doom report just said on tv that the US will be bankrupt soon as the future interest payments on US debt will be greater than tax revenues once all the baby boomers have retired. He had nothing positive to say on the future of the US dollar. He doesnt hold his punches thats for sure.

britmaveric

$ is the standard bearer for the world - dare say it will remain so for 100yrs +. Euro is on verge of collapse since they suckered themselves into the bundled mortgage crisis.

HungryHeart

I think once the election is over and Obama wins things all around will start to stabilize.

The process of sending the Devil back to Hell has shook things up quite badly , sort of a modern day Armageddon

Norton

I believe the Euro is by far more vulnerable than the dollar. This from a blog but brings up some interesting points.

"Flaws in the structure of the EMU

(1) The US dollar, like most currencies, was issued as a result of nation-building. The Euro was issued as a step towards nation-building. The European Union is not yet a state in the full sense of the term. Its other flaws from this this. The member states control their own fiscal policy. More important, the member states see themselves as distinct states. Differential growth in Georgia and California does not create pressure to break up the Union (not since 1860).
(2) The EMU is a monetary zone. Unfortunately one interest rate cannot work for every “part” of the EMU. Esp those with different economic and social structures, like Germany and Italy. That is not terminal during a boom, but might be during a recession. Like the one perhaps starting now. The governors of the European Central Bank follow the tradition of the German Central Bank: fighting inflation is the first and only goal. That works for a strong, stable economy like Germany. High rates during a downturn might prove too much for Italy to bear giving Italy two choices both with ugly consequences. Leaving or staying in the EMU.
(3) The dream was that a strong currency would create competitive disinflation like that Germany experienced during the years after the Bretton Woods system crashed in 1971. A strong currency forces industrial and labor market restructuring in order to stay competitive. If this does not occur — and there are few signs of this — then the likely result is slow growth and inflation plus widening divergences between the EMU’s member states. In which case the pressure on the EMU could become intolerable during a recession."


Can the European Monetary Union survive the next recession? « Fabius Maximus

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Marmite the Dog

Old news. Reagan could've sorted it out in the early 80's, but he didn't have the balls that Maggie had.

blackgang

hell I don't know, and due to the fact that I do live here now and will for some time to come, I just watch how many Baht I can get for a dollar, and now it is over 34 and the Thai are talking of devalue the Baht so might go back to getting 45 to the dollar.

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Jet Gorgon

^^^ Norts, I never agreed with the move to the Euro. The EU economies were and are too different, especially Italy.
I take it when this blogger is talking about inflation, he is talking about increasing interest rates to stifle inflation? I think we're looking at stagflation at the least if not a global recession or even depression.
Anyhow, the greenback seems to be holding its own, strengthening against the Euro and other currencies, especially important to me, the C$. This is interesting as US interest rates are so low (altho other countries' rates are down, too).
Unless foreigner govts, etc, start fleeing the Treasuries market, the US$ should be OK, IMO.

bkkandrew

Once the Paulson Plan is exposed as the too-little-too-late busted flush that it patently is, the USD will collapse in the sea of debt that the US has become. You do not fix debt by adding digits to a public board in NYC, you have to repay it. And that is certainly not happening.

I do also agree with Norton on the fate of the house-of-cards Euro though.

Jet Gorgon

^ House of cards Iceland is worse:
The financial sector assets expanded to over 1,000 percent of GDP, while gross external indebtedness reached 550 percent of GDP at end-2007, largely on account of the banking sector.
The global turbulence has taken a significant toll on domestic financial markets since end-2007. The CDS spreads of the three largest domestic banks have risen sharply, approaching 1000 basis points and the freely floating Icelandic króna has depreciated by over 40 percent. Despite minimum public sector debt, the sovereign is facing a significantly increased risk premium.
Public Information Notice: IMF Executive Board Concludes 2008 Article IV Consultation with Iceland

The Economist calls it "kreppanomics" (kreppa = "in a pinch").
Iceland's household debt is 213% of disposable income, compared to 169% in the UK and 140% in the US.
Oops.
Iceland in hot water | Kreppanomics | The Economist

Spin

A blogger i read yesterday called it Darwinian capitalism

Butterfly

The law of average will mean that the USD should rebound soon, hopefully the Fed will keep interests at current level and stop cutting interest rates, but it seems not according to the latest news, Bernake wants more cut

britmaveric

Can't cut much more without giving dosh away

bkkandrew

^Which, pretty much, is what the US dollar is worth......

Bugs

I really don't see where most on this thread are coming from - the US dollar has been gaining ground on most major currencies for about the last six months.

Pound:

Euro:


Baht:


Kind of funny 'cause it (the dollar) was takin' a beating for awhile - not so right now. I think peole jumped out of the dollar and into the pound, and the euro - took a look around, and found out the dollar was not such a bad deal after all - now they all are returning to the dollar.

When the world economy starts to slide - folks jump on the dollar - not out of it.

I think the above trends - for the dollar to rise to continue - especially if the world economic picture gets worse.

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bkkandrew

^Its the last attempt at avoiding the inevitable by those with vested interests...

Dan

Taking debt, and unavoidable commitments to medical care and social security into account, the US is between 50 and 80 trillion dollars in the shitter. It's only hanging on because it's been fudging the figures and because its not hanging on is going to royally fuck everyone but the day of reckoning can't be too far away. After all, the only way for this much debt to be serviced is for vastly greater levels of debt to be raised, a process which is sooner or later is going to end in tears, particularly when you consider that the requirements of an ever-expanding economy to service ever-expanding debt is very shortly going to run into the brick wall of peak oil and resource depletion. How's it all going to happen? Fuck knows but the powers that be have shown their willingness to print money on demand in an effort to keep the show on the road so inflation has got to be a serious possibility. I'm investing in wheelbarrows.

DrivingForce

first in...first out...simple really..