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The prospects for the U.S. Dollar etc...
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E-boy



Joined: 10 Jul 2006
Posts: 1552
Location: Virginia (Much barfiness)

PostPosted: Sat Aug 13, 2011 11:18 am    Post subject: The prospects for the U.S. Dollar etc... Reply with quote

Just curious what people here think about this. There are alarmists out there painting less than rosey pictures and it's really hard to pooh pooh them when the government is in so deep.

I'm not sure deep devaluation and loss of it's status as the go to reserve currency is inevitable, but there are those who insist this is the case. I've heard the observation made that we need to move more into a production economy to avoid or minimize this.

I am not really certain what to make of a lot of this because, frankly, our government doesn't play accounting games by the rules most of the rest of us use. I do know that we have, and have been ignoring, a golden opportunity to get back into a more production based economy just by fully endorsing alternative energy products and manufacturing. I also know that buying and guarantying bad debt only adds to our problems.

Many of you really do your homework on stuff like this so I'm very interested in what you have to say.
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bitflipper



Joined: 09 Jul 2011
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PostPosted: Sat Aug 13, 2011 5:42 pm    Post subject: Re: The prospects for the U.S. Dollar etc... Reply with quote

E-boy wrote:
I'm not sure deep devaluation and loss of it's status as the go to reserve currency is inevitable, but there are those who insist this is the case. I've heard the observation made that we need to move more into a production economy to avoid or minimize this.

I've been hearing the same thing since the mid-70s (probably before, but I wasn't old enough to pay attention, then). After a while, one learns how to ignore the alarmists waving their "The End is Near!" signs and to pay attention to the more important things in life and to matters one can personally affect.

Haters gonna hate, 'n' Chicken Little's gonna cry; it don't pay my bills.
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nathan



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PostPosted: Sun Aug 14, 2011 7:36 am    Post subject: Reply with quote

I'm looking for Usagi on this one, but off-hand I call bullshit. Our primary problems right now are political. At the same time, Europe is going tits up - the Euro looks infinitely more dangerous than the US dollar. Aside from that, where do you go? China? Nope.

The ten year note is in the upper 2s for god's sake. Post downgrade! If the international community has lost faith in the stability of the US, it has a damn funny way of showing it.
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Sam



Joined: 09 Jul 2006
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PostPosted: Sun Aug 14, 2011 1:36 pm    Post subject: Reply with quote

Viable alternatives to the dollar as the 'go-to' currency

Eurozone's EUR - nope

China's RMB - nope

dollar is fine so far, and this is coming from a person who predicted the S&P downgrade by about a month and agree with the ruling.
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WheelsOfConfusion



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PostPosted: Sun Aug 14, 2011 1:56 pm    Post subject: Reply with quote

Actually Swiss Francs are hot right now, but that in itself is posing problems for the Swiss economy.
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Mr_Moustache



Joined: 01 Oct 2006
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PostPosted: Sun Aug 14, 2011 4:26 pm    Post subject: Reply with quote

Hasnt Switzerland always been a safehaven when economical turmoil arises?
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E-boy



Joined: 10 Jul 2006
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PostPosted: Mon Aug 15, 2011 7:21 am    Post subject: Reply with quote

Well I'm not a huge fan of economics (Hardest of the social sciences...), but I do know that for all of my picking on them they aren't entirely useless. I just wanted to see what y'all had to offer and I'm glad I asked.
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Arc Tempest



Joined: 28 Jan 2007
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PostPosted: Mon Aug 15, 2011 3:35 pm    Post subject: Reply with quote

I giggle a little every time someone calls economics a science.
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Sam the Eagle



Joined: 02 Oct 2006
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PostPosted: Mon Aug 15, 2011 5:46 pm    Post subject: Reply with quote

- US is still the 'single' biggest economy around; if one want to buy large sized bonds no other market compares to it. China is still stuck, EU is neck deep in shit for the next 3 years.

- EU is second best choice as 'globally', it's the biggest economic power around. Pity they can't see eye to eye for the next 20y or so. Maybe sooner if they get their collective heads out of their hindparts. We can wish for a pony too. So while they can collectively replace US $ as reference currency, and I'm not sure they want to reach that part, they lack the collective will to do so.

- China is bugge(re)d by inflation. No way they can replace $ yet.

- JPY, Swiss Franc and gold are vault like currency. Good for safekeeping, but not as active currency. Japan can do; it's still very busy sorting itself out after Tohoku's earthquake.

All in all, $ will loose a bit of shine and will keep N° 1 spot for some time more. Until another single market economy can replace it, it will still remain as reference currency for the time being. Now, will it be replace a reference currency within 10y, yes. Which currency, ask 'late' Paul the octopus.
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Samsally



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PostPosted: Mon Aug 15, 2011 5:51 pm    Post subject: Reply with quote

Anyone else remember that period of time like, two years ago when the Canadian dollar became worth more than the US dollar?

Anybody still haunted with the memories of hordes of Canadians coming down to buy everything in sight and bitch about the price of hotels?

I'm not kidding you, every grocery in town was sold out of baked beans for WEEKS. I can't make this shit up, it was fucking weird. Apparently they really like the baked beans and they aren't sold over the boarder or something.
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Mini J



Joined: 09 Jul 2006
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PostPosted: Mon Aug 15, 2011 6:56 pm    Post subject: Reply with quote

The canadian dollar has been above the US dollar for months now, though not by a lot. That'll change again once the US dollar gets itself sorted out.

As to the baked beans, I haven't any clue about that. What kind are they? Maybe I'll have to give them a try...
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CTrees



Joined: 21 Jul 2006
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PostPosted: Mon Aug 15, 2011 7:18 pm    Post subject: Reply with quote

Thing about that is, no one really seems to agree. For example, this has the USD being about the CAD for the past several months (if only be pennies), but other sites, right now, are giving the CAD the nod by a little. *shrug* The mere fact that we're about even is... disheartening.
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LD!



Joined: 11 Nov 2006
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PostPosted: Mon Aug 15, 2011 10:35 pm    Post subject: Reply with quote

Samsally wrote:

Anybody still haunted with the memories of hordes of Canadians coming down to buy everything in sight and bitch about the price of hotels?
.

I worked in retail in Maine at the time that happened. They would come down in buses and buy stuff
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Mini J



Joined: 09 Jul 2006
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PostPosted: Tue Aug 16, 2011 4:13 am    Post subject: Reply with quote

Just checked, looks like the CAD has been consistently a couple pennies higher since the new year (not like back in the day circa 2005-2006, when Americans visiting Canada got 1.60 CAD for every USD; makes today's 0.98 CAD per USD seem disappointing I imagine). I remember when I went to Vegas right at the holidays they were pretty much exactly at parity (thus when exchanging we were getting about 95 cents or so). The most annoying thing to Canadians is that, despite our dollars being equalish, the same thing up here is usually at least 20% more expensive (if not more!).

For example: I was looking up Animaniacs Vol. 1 the other day, and on amazon.ca it is $44.78 CAD, while on amazon.com it is $24.87 USD. Same with Star Trek TNG box set, etc. Heck, even a Big Mac is 10% more up here.

So it isn't really that Canadians feel compelled to rush, en masse, to save a penny or two, it's that the favourable exchange rate makes it very much worth crossing to border to shop. Ask Dogen about Bellis Fair in Bellingham if you want stories about Canadians shopping down south; I think there might be more BC plates than Washington plates on the weekends.

Oh, uh, this is really quite the sidetrack from the fate of the US Dollar, I suppose. To get back on topic, here's a happy-go-lucky article guessing what the next 10 years will be like in the US.
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Snorri



Joined: 09 Jul 2006
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PostPosted: Tue Aug 16, 2011 4:32 am    Post subject: Reply with quote

Sam the Eagle wrote:
- US is still the 'single' biggest economy around; if one want to buy large sized bonds no other market compares to it. China is still stuck, EU is neck deep in shit for the next 3 years.

- EU is second best choice as 'globally', it's the biggest economic power around. Pity they can't see eye to eye for the next 20y or so. Maybe sooner if they get their collective heads out of their hindparts. We can wish for a pony too. So while they can collectively replace US $ as reference currency, and I'm not sure they want to reach that part, they lack the collective will to do so.


It's looking more and more like the Euro was actually a fundamentally bad idea.

It has little to do with countries agreeing with eachother and a lot to do with the fact that it turns out that one currency does seriously not mesh well with vastly different economic policies.

We've come to the fucking bizarre situation where one side pretty much has to be screwed. Greece and all the other suffering countries could get over this easily if not for the Euro. fuck collective will, monetary policy pretty much gets split because going either way screws over the other side.





Greece badly needs inflation of their currency. But Northern Europe really really doesn't want that because it would seriously hurt them. Like, we went for austerity because any other solution would be really bad. Austerity! We have to go for the worst possible solution to a crisis because all the other solutions are unpossible!
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