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Old 09-04-2009, 12:40 PM   #1
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US Dollar

How concerned are you about the future of the Dollar?
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Old 09-04-2009, 12:44 PM   #2
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[tapping my crystal ball Magic 8 Ball]

I'm not particularly concerned about it relative to other fiat currencies. But I do see most fiat currencies falling against hard assets in the longer term. And I think most other fiat currencies have equal or greater long-term problems than the dollar.

That is to say, it's possible to have a firm to strong dollar relative to the Euro or the yen or the pound and so on, yet still see commodity and hard asset prices rise in all currencies, including the dollar. This is the scenario I personally consider most likely.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 09-04-2009, 02:40 PM   #3
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Half my investment portfolio is in international investments. A weak dollar would make my international investments worth more in USD. Therefore not worried at all if it weakens moderately over time. That could also help the US export more and reduce the trade deficit.
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Old 09-04-2009, 03:59 PM   #4
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I love to hear people say that the Euro is strong vs. the dollar because of Europe's fiscal conservatism at least in the way they responded to the crisis. Are they kidding? The only reason why Europe is not spending more on stimulus packages is not because they don't want to, it's because they can't. They are already tapped out, facing huge future liabilities to sustain social programs, aging and declining populations and no room to raise taxes. And look who has one of the stronger currencies right now, Japan! A country with huge debts, a stagnant economy and a rapidly aging population... Currency markets are notoriously hard to predict, so I won't. Diversify and don't overdo it, it's my philosophy...
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Old 09-04-2009, 06:29 PM   #5
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I love to hear people say that the Euro is strong vs. the dollar because of Europe's fiscal conservatism at least in the way they responded to the crisis. Are they kidding? The only reason why Europe is not spending more on stimulus packages is not because they don't want to, it's because they can't. They are already tapped out, facing huge future liabilities to sustain social programs, aging and declining populations and no room to raise taxes...
Imagine what would happen to the Euro if they had to pay the full bill for their own defense...
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Old 09-04-2009, 08:55 PM   #6
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I'm thinking that currencies from countries with strong commodities exports are likely to appreciate versus the US dollar (e.g. - Brazil, Australia, Canada) unless we enter another financial panic.
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Old 09-05-2009, 01:16 PM   #7
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How concerned are you about the future of the Dollar?
It's served me well for over 64 years, so I will continue to spend it in the future.
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Old 09-05-2009, 05:52 PM   #8
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It's served me well for over 64 years,
I would disagree with that..I think I'd much prefer having the groceries a dollar would buy 64 years ago as opposed to the groceries a dollar will buy today..
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Old 09-05-2009, 05:58 PM   #9
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I would disagree with that..I think I'd much prefer having the groceries a dollar would buy 64 years ago as opposed to the groceries a dollar will buy today..
Oh, but haven't you heard about all the deflation out there? You know, the stuff that is causing our food bills and utility bills and insurance bills and our health care bills and our taxes to fall?
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 09-05-2009, 07:12 PM   #10
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I think that the big likelihood is that the dollar loses excleusive status as the world's reserve currency. Instead, I think it is quite possible that the USD shares reserve status with the Euro, maybe the Swiss Franc, and possibly the Yuan. What effects will that have on us as US consumers/investors? Hard to handicap. So diversify and make sure you have some non-USD bonds and foreign equities just to be safe.

I cannot say that I have followed my own advice on the bond side, but my larest equity holdings are non US companies, the largest of which are owners of real assets financed with USD denominated debt..
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