US Dollar hits 3 month high :)

Discussion in 'Business & Economics' started by Karmashock, Feb 8, 2005.

  1. Karmashock The Doomslayer Registered Senior Member

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    http://news.ft.com/cms/s/0267b932-78fc-11d9-89c5-00000e2511c8.html
     
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  3. Muhlenberg Registered Senior Member

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    Just when Soros, Buffett and Gates predicated it would drop more. How odd.
     
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  5. Karmashock The Doomslayer Registered Senior Member

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    Doomsayers drop like flies.
     
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  7. Undecided Banned Banned

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    Actually a rise in the US dollar is not what the US needs because it increases the US deficit even further, and increases America's debt by leaps and bounds. Also imo this is only temporary, there is no reason to get your panties all wet, once news comes about America’s trade gap things will not look so rosy. A strong US dollar is not what the US needs right now.
     
  8. Muhlenberg Registered Senior Member

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    Karmashock...Or they made a bundle suckering people in. I'm convinced Soros did it to drive up oil prices and elect his man Kerry. The statue overseas the messianic mental case would have gain if he pulled it off had he bought the U.S. Presidency would have been better than any of the other nefarious deals he's done.

    Undecided....this is not a high dollars. Just higher.

    An unrealistically low dollar is beneficial to the USA for a while (despite what everyone on this forum was saying just a little while ago) but was seriously hurting Germany among others. Even middle run, that isn't good for the USA either.
     
  9. Undecided Banned Banned

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    Undecided....this is not a high dollars. Just higher.

    If becomes a trend it becomes a problem.

    An unrealistically low dollar is beneficial to the USA for a while (despite what everyone on this forum was saying just a little while ago) but was seriously hurting Germany among others. Even middle run, that isn't good for the USA either

    No matter how low the US$ goes China will go down in tandem and Chinese goods will even cheaper then American ones, and America's trade imbalance will still be in a large deficit, the only way this situation is going to rectify itself is if China gets rid of its peg.
     
  10. Karmashock The Doomslayer Registered Senior Member

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    Muhlenberg,
    I agree to the first point. I think that much of the nay saying was politically motivated.

    I disagree to the second point about the dollar though. It's just a unit of measurement. A high dollar or a low dollar is only high or low if it's over or under valued. The biggest hit that Americans take when they go to Europe is not actually the currency difference, but the market difference. It's called purchasing power parity. Things are literally more expensive for everyone in a place like England for example. People get confused because the purchasing power difference is almost the same as the currency difference... but this is just a coincidence.

    What's important with a currency are two things.

    1. Liquidity: There has to be enough of it around for you to do ANY purchase, sale, or stockpile of wealth without exhausting the total supply of money. This might seem like a really easy thing to do, but it's pretty difficult unless you just print money with no regard to valuation.

    2. value: That the dollar is worth 80 Euro cents is not important. The dollar wouldn't be any better if the Euro were worth 80 US cents. The value of money is arbitrary. What's important is that your currency KEEP value.

    Over time, as economy's expand it becomes more attractive to devalue your currency very slightly. This means that though your currency loses some value over time you're also expanding the money supply at roughly the same rate as your economy needs more liquidity.


    This is pretty basic and generalized… but it gives you a good idea of how this stuff works.


    The US dollar rising against the Euro means two things.

    1. Confidence in the value of Dollar is rising. It doesn’t need to go very high; it just needs to stabilize. Though it would be nice if it got up to about 85 euro cents to the dollar.

    2. The confidence in the dollar is rising faster then the confidence in the Euro. This puts off any notions of nations switching to stocking euros in their reserves instead of dollars. The Euro isn’t as good as the dollar for reserves anyway, as it’s far less abundant.

    Love and peace, Karmashock.
     
  11. Undecided Banned Banned

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    It's called purchasing power parity. Things are literally more expensive for everyone in a place like England for example. People get confused because the purchasing power difference is almost the same as the currency difference... but this is just a coincidence.

    The difference is variable, it changes and the PPP is measured by a standardized price, according to PPP Americans are significantly better off then anyone in Europe according to PPP standards, so its not a difference in GDP PPP it’s a difference in exchange rates that makes Europe so much more expensive, because in terms of PPP Americans should be able to afford much more then what Europeans can afford.

    1. Liquidity: There has to be enough of it around for you to do ANY purchase, sale, or stockpile of wealth without exhausting the total supply of money. This might seem like a really easy thing to do, but it's pretty difficult unless you just print money with no regard to valuation.

    Also what this economic genius forgets is that there is excess liquidity for the US dollar; look at the FOREX figures for the rest of the world, especially East Asia. There are billions of US dollars in these banks, which if unleashed on the world economy would collapse the US dollar.

    2. value: That the dollar is worth 80 Euro cents is not important. The dollar wouldn't be any better if the Euro were worth 80 US cents. The value of money is arbitrary. What's important is that your currency KEEP value.

    That makes no sense of course, because a currencies value is determined by its exchange rate with another currency. The fact that the US dollar is worth 80 euro cents is relevant because it shows the relative weakness of the US economy, and a weak dollar isn’t good for anyone holding US dollars, and eventually nations will change their domination into Euro’s, and Americas reign as the world’s primary economic power is all but over.

    Over time, as economy's expand it becomes more attractive to devalue your currency very slightly. This means that though your currency loses some value over time you're also expanding the money supply at roughly the same rate as your economy needs more liquidity.

    As a economy expands exchange rates almost always appreciate in value to stem the growth of inflationary pressures, and due to the attractiveness of the nations dollars. When a nation’s currency devalues it is because the economy is in bad shape, I have never seen a currency devalue if the economy was in good shape, simply doesn’t happen.

    This is pretty basic and generalized… but it gives you a good idea of how this stuff works.

    All you said was pure Bull Shit.

    1. Confidence in the value of Dollar is rising. It doesn’t need to go very high; it just needs to stabilize. Though it would be nice if it got up to about 85 euro cents to the dollar.

    It’s a sign of investors trying to speculate on the dollar, I doubt this is due to confidence. I would imagine there’s a lot of arbitrage going on here and investors trying to make a quick buck.

    2. The confidence in the dollar is rising faster then the confidence in the Euro. This puts off any notions of nations switching to stocking euros in their reserves instead of dollars. The Euro isn’t as good as the dollar for reserves anyway, as it’s far less abundant.

    Evidence for that would be appreciated…
     
  12. Karmashock The Doomslayer Registered Senior Member

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    hmmm...
     
  13. spuriousmonkey Banned Banned

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    I can still remember that when the euro was itroduced everybody was worried that its value would run downhill like a bobsled on speed compared to the US dollar.

    But that is not what happened of course as we all know.
     
  14. nirakar ( i ^ i ) Registered Senior Member

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    The Dollar is to high, but so is the Euro. While the Euro and other European and similar currencies have fallen against the Dollar over the last three months, many Latin American and Asian currencies have risen against the dollar over the same three months. And of course, many currencies are pegged to the Dollar.

    The USA's trade and fiscal deficits suggest that the dollar still has a long way to fall.
     
  15. Karmashock The Doomslayer Registered Senior Member

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    It did fall... it's not very far from where it started.

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  16. Undecided Banned Banned

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    Oh I'm aware on his ignore list, you see the reason why I post is because I want to discredit him so everyone else can see, and he then has no reason to talk. Anyways he obviously looked at what I wrote, because otherwise he wouldn't have bothered, for alll retardshock knew I could have been talking to someone else. So I'm not ignorant, and no one else here is RShock, so keep on clicking on the "view post" button and pretend to ignore what I am saying.

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  17. Clockwood You Forgot Poland Registered Senior Member

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    People like myself put you on ignore so we don't have to watch your head rotate and vomit ectoplasm everytime America is mentioned. Sometimes I just don't want to deal with you when I have enough frustrations going on in my life. Other times, I am curious or in the mood for a debate that can only be described using the term 'Scortched Earth Warfare'.
     
  18. Karmashock The Doomslayer Registered Senior Member

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    is he seriously asking why he's on the ignore list?... that's just comical.

    Anyway, back on topic... I'd ask everyone to ignore the troll.
     
  19. candy Valued Senior Member

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    Anybody notice that the price of gold has also been falling.
     
  20. Karmashock The Doomslayer Registered Senior Member

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    it's got a ways to go... we need to keep the engines of commerce purring

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  21. Undecided Banned Banned

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    Oh please Karma...the only troll here is you, I not only present adequate arguments, but the support to make it a valid point...forget about Treasury Bills. So if you want real debate sciforumers, you know who to debate with. Pseudo's come and go. Also Karma notice no one responded to your overtly wrong post because I raped it...so if you want conversation the end result will be me or nothing.

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  22. Undecided Banned Banned

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    People like myself put you on ignore so we don't have to watch your head rotate and vomit ectoplasm everytime America is mentioned.

    Actually remember the time when I said something neutral in an economics thread, and merely because I said it you misconstrued my argument to fit your definition of what I am to satisfy your faulty logic that I am a “America hater”? If you think I am an America hater, go ahead but I am not. I have many times said many goods things about the United States, but you ignore that and get all vitriolic on me because you selective read what I write. If you are wiling to read my posts as they should be read, not as a high school opinion piece but as a opinion that is valid, maybe you wouldn’t need to lie to urself to justify ignoring me.
     
  23. Muhlenberg Registered Senior Member

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    Karmashock . . .wow...264 replies.

    And I thought most here only liked negative articles.

    Post a thread on Americans being better off next year and the year after that than they are this year and you'll get 1,000 replies.

    Some other suggestions:

    Imports shown to increase American prosperity.

    Globalization means a better life for everyone.

    As private union membership declines, GDP increases.

    Tax cuts for the rich help the poor.
     

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