Weak Dollar - Any Concerns

F

F-One

Recycles dryer sheets
Joined
Feb 1, 2006
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US Dollar seems to be taking a slide against other currencies recently, especially the Pound and Euro in the last couple of days. I know the UK are looking at raising interest rates soon. I heard this morning a discussion of stagflation in US.

Any thoughts, concerns?? Or am I just getting the close to FIRE jitters?
 
It will get weaker once the Fed begins to lower interest rates.

The question is how will it affect your int'l travel - it will be more expensive.

US stock market - could go up as our stocks look cheap to foreign investors; it could go down if foreign investors see their currently invested dollars going down. So far it isn't in the news so not too much to worry about.
 
Meh, own some foreign bonds and stocks and stop caring.
 
Thanks for the comments,

Now I'll try to stop worrying and go play some games
 
Yeah, I'm concerned.
I like to go to Europe and the weakening dollar certainly has a negative effect
on travel to the UK and the Euro countries.
What can the US do about strengthing the dollar or doesn't anyone care ?
.
 
A weaker dollar means that we are poorer.

bennevis said:
What can the US do about strengthing the dollar or doesn't anyone care ?
Click to expand...

We can quit buying stuff made in foreign countries. We can raise interest rates. We can quit borrowing money to balance the federal deficit.

The choices aren't too attractive.
 
F-One said:
US Dollar seems to be taking a slide against other currencies recently, especially the Pound and Euro in the last couple of days. I know the UK are looking at raising interest rates soon. I heard this morning a discussion of stagflation in US.

Any thoughts, concerns?? Or am I just getting the close to FIRE jitters?
Click to expand...

I want to retire to the UK, I'm freeking out even with 40% of my assets in international stocks/bonds
 
Masterblaster said:
A weaker dollar means that we are poorer.

We can quit buying stuff made in foreign countries. We can raise interest rates. We can quit borrowing money to balance the federal deficit.

The choices aren't too attractive.
Click to expand...

It depends on how you spin it; Now american companies can export more. Imports face more competition from local manufacturers;
Check this out:
06_04_2007_101_077_003.jpg


http://bp0.blogger.com/_1eBdIBhrMwI...oRINyK5jNc/s1600-h/06_04_2007_101_077_003.jpg
 
currencies go in cycles along with the economy

back around 2002 everyone was in a panic that the dollar was so low and no one remembers it anymore.

stagflation is a real possibility but so are a lot of other things
 
lswswein said:
It depends on how you spin it; Now american companies can export more. Imports face more competition from local manufacturers;
Click to expand...

Well that great for them. As for me I really don't sell too much overseas so I don't get any boost from that. However I do buy quite a bit that is imported. So the price of the stuff I buy just goes up.

The spin that other countries can cherry-pick our stuff now doesn't seem like too great of a trade off.

However you spin it, we are poorer now.
 
F-One said:
US Dollar seems to be taking a slide against other currencies recently, especially the Pound and Euro in the last couple of days. I know the UK are looking at raising interest rates soon. I heard this morning a discussion of stagflation in US.

Any thoughts, concerns?? Or am I just getting the close to FIRE jitters?
Click to expand...

I agree with you. Living abroad, I can really relate to the currency swings. I learned a long time ago that a weak US $ makes me poorer... (in the USA it shows up as inflation)

Yes all curriencies have their day, but I do not see the Pound Sterling weakening significantly against the USD any time soon. (trade/budget references)

Lance
 
It's great for tourist areas like Florida or other hot travel destinations. Lot's more Europeans will be vacationing and spending lots of money at hotels, restaurants, retail shops, etc. A lot of people are going to make a ton of cash. May be good for certain real estate markets too as Europeans buy up vacation homes. They will spend more on American products which will be a bargain for them. So it's not all doom and gloom for everyone.

True enough though, if you want to travel around Western Europe, it's gonna cost ya. Eastern Europe is still quite the bargain though :)
 
For those of us who are going to Europe this summer, the decline of the dollar hurts.

In typical LYBM fashion, however, I've found "funding sources" for most of my travel expenses. My wife's, though, will be from my pocket. (She has FIRE'd.) One of the advantages of being in academia, though, is that one can find small grants here and there.

Once I FIRE (summer 2008), all trips outside North America will be evaluated on how far the U.S. dollar goes.
 
Does anyone have any thoughts about the long-term relationship between the dollar and the Euro? I have read some websites talking about how "this time it is different", that the dollar may never come back again because more and more countries are moving from the dollar to the Euro as their reserve/default currencies.

Do you believe this, or do you think it is just part of the historical cycle where the dollar is currently down but in a few years it will probably be back up again?

My own take is that other than that many countries are moving from the Dollar to the Euro as their reserve/default currency, it seems that Europe has their own problems with deficits (just like the US) and what have you. Therefore, it would perhaps seem that the dollar should come back at some point?

I'm curious on your thoughts. Thanks in advance.
 
7 years ago no one knew how long the euro would last so it was weaker. now that it's not going away it's safe to buy into it.

if i'm wrong then someone correct me, but as i understand it but since currencies are traded in pairs everyone needs to hold an amount of euros in reserve to make their currency worth something against the euro
 
george76 said:
Does anyone have any thoughts about the long-term relationship between the dollar and the Euro? I have read some websites talking about how "this time it is different", that the dollar may never come back again because more and more countries are moving from the dollar to the Euro as their reserve/default currencies.

Do you believe this, or do you think it is just part of the historical cycle where the dollar is currently down but in a few years it will probably be back up again?

My own take is that other than that many countries are moving from the Dollar to the Euro as their reserve/default currency, it seems that Europe has their own problems with deficits (just like the US) and what have you. Therefore, it would perhaps seem that the dollar should come back at some point?

I'm curious on your thoughts. Thanks in advance.
Click to expand...

I have a few thoughts with respect to $/Euro. Mostly subjective though :D

A friend reminds me that when the Euro was first introduced, it was priced at 1.20 USD to the Euro. So while the Euro e is now quit strong, around $1.35/USD, it helps to keep the original price in mind.

Also, somewhere ont his forum somebody posted a link to a Citi Group (I think that was the name) article pointing out that most European Nations -with the UK a notable exception- have HUGE public pension liabilities, making our SS problems look small in comparison. Cranking the printing presses up to pay all those retiree obligations might dampen the demand for Euros a bit :D Every where I travel I see large numbers of Europeans on holiday partly due to the fact that they get 4 to 6 weeks of vacation or that they are retired, usually relatively early. I am not bashing Europeans, but my point o is that all that time off does tend to take a bite out of efficiency, which, at some point will show up in the demand for Euros IMHO.

I complain about the long term trade and budget deficets, but some of our competitors have their own problems as well.

Just my take on take on things...

Lance
 
brewer12345 said:
Meh, own some foreign bonds and stocks and stop caring.
Click to expand...
That pretty much sums up my feelings about it.
 
F-One said:
I heard this morning a discussion of stagflation in US.
Click to expand...

Y-O-Y CPI of 2.8% and real GDP growth ~2.5% is hardly stagflation. I know financial writers need something to print, but jeesh.

The only thing that peeves me is my international travel budget doesn't buy what it used too. :'(
 
Weak dollar? What weak dollar? Our Canadian dollar hasn't been this high this long for about 30 years. :LOL:

Sorry, kidding you SOB's (south of border)
 
kumquat said:
Weak dollar? What weak dollar? Our Canadian dollar hasn't been this high this long for about 30 years. :LOL:

Sorry, kidding you SOB's (south of border)
Click to expand...

wait till commodities drop in value
 
As an FYI to Lancelot (and you might know this).... the UK does not use Euros...

And the euro was way below a dollar a few years back.... so it is WAY stronger than it was...
 
Currently there are fourteen countries of the European Union that do not use the Euro: They are Denmark, Sweden, the United Kingdom, Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania and Slovakia.
 
Texas Proud said:
As an FYI to Lancelot (and you might know this).... the UK does not use Euros...

And the euro was way below a dollar a few years back.... so it is WAY stronger than it was...
Click to expand...

The UK pension system (similar to the US in that there is a fund made up of government securites) is so different to the Eurozone countries (ie they don't a pension fund, it is completely pay as you go, so the baby boomers retiring means more taxes for the remaining workers or lower benefits) is one of the reasons the UK did not join the euro.

My take on the euro/dollar and GBP/dollar is that it is a cycle and nothing to worry about apart the short term effect on vacations. Unfortunately, for those wanting to retire to the UK, it is more of a worry. We plan to spend a lot more time living in the UK when we retire, but are fortunate that 2 of my company pensions will be paid in the UK plus I'm eligible for a UK govt pension, having paid into the system for 19 years.
 
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