Why is the US Dollar Being Destroyed??

[ShokWaveRider]

WOW!

Just a Simple observation here, from 2002 to now. (Coinsiding very well with our current spendthrift President's tenure) The US Dollar has dropped against the Candian Dollar from $1.60 CAN to $1 US to $1.15 to $1 US. I notice this because I spend Summers in Canada and Winters in the US and our funds are in US Dollars.

On $1m US that is $450,000 Canadian which in my books is a nice House.

Comments?

SWR

 

[brewer12345]

IIRC, the USD in the early 2000s was very high vs other currencies (I think the Economist's "Big Mac" index shows this), so part of the fall is likely just a correction. I have to believe that a rising trade gap and lots of gummint and private borrowing have also helped engender the slide.

 

[Marketneutral]

Ahh now we are in my area.

USD got very strong during the Asian Crisis, i.e. we imported their currency appreciate.  Now USD currency appreciate is being exported as well as our manufactoring base.

CAD is raising due to oil sands and the level of PMs they have.

If you even want to see a better currency check out MXN.  Our neighbors to the south.



Another intesting factoid.  This current President has spent more then the other Presidents combined.  We now are in debt to the tone of close to 100T if you add up;  trade balance, current account and unfunded libabilities.

That new medicare thing is probably going to bring the death nile to the USD being the reserve world currency.  

JMHO.  

 

[brewer12345]

As an aside, it shouldn't surprise us that the USD will have to share the spotlight as a reserve currency. After all, other economies are becoming larger and stronger faster than the US, so you don't have to extrapolate too far to get there. And if Japan ever succeeds in righting itself, the JPY will come back as a strong contender.

 

[Marketneutral]

As an aside, it shouldn't surprise us that the USD will have to share the spotlight as a reserve currency.  After all, other economies are becoming larger and stronger faster than the US, so you don't have to extrapolate too far to get there.  And if Japan ever succeeds in righting itself, the JPY will come back as a strong contender.

China will be the next superpower.

Got CNY?

 

[brewer12345]

China will be the next superpower.

Got CNY?   

Nope. Not until China does more to deregulate their economy and prove that it will enforce the rule of law.

 

[sgeeeee]

China will be the next superpower.

Got CNY?   

I believe this. But it's probably a 10+ year play rather than a short to mid term play.

 

[Marketneutral]

Nope.  Not until China does more to deregulate their economy and prove that it will enforce the rule of law.

U.S. companies are moving there because the regulations are easier and no unions.

Remember we have to sell 2.8B in debt per day to keep this great nation floating. Who is the largest buyer? HMMM.

 

[Jay_Gatsby]

U.S. companies are moving there because the regulations are easier and no unions.   

Remember we have to sell 2.8B in debt per day to keep this great nation floating.  Who is the largest buyer?  HMMM.   

I'm not sure our government cares who is buying, as long as they keep buying.

 

[johnlw]

It has gone down because the Fed has been printing money like there is no tomorrow during the Bush Administration. It is the nature of a pure fiat currency.

It's also a factor in why the value of gold has doubled during the last few years.

 

[JPatrick]

China will be the next superpower.

Got CNY?   

Yes, but before they get there, they will take one hell of a fall that will delay their ascent to superpower status.  Not the super power , but a super power.

 

[greg]

I'm not sure our government cares who is buying, as long as they keep buying.

Hey this is my area of expertise: So we have this strange relationship with Japan and China. We buy their stuff and send them our money; they recirculate loan us the money back to keep things going. It's just like the cold war stand off, but different: Both relationships are built on mutually assured self distruction co-dependency, but just one is financial. Well, technically they are both finanical--if little remains. The Japanese and Chinese combined hold one trillion dollars worth of US bonds. If they dump all at once, the price of US bonds will drop like a rock. And then US consumer buying will stop, dead in its tracks. But the good thing will be: a buying opportunity--but probably not.

 

[Lazarus]

Hey this is my area of expertise: So we have this strange relationship with Japan and China. We buy their stuff and send them our money; they recirculate loan us the money back to keep things going. It's just like the cold war stand off, but different: Both relationships are built on mutually assured self distruction co-dependency, but just one is financial. Well, technically they are both finanical--if little remains. The Japanese and Chinese combined hold one trillion dollars worth of US bonds. If they dump all at once, the price of US bonds will drop like a rock. And then US consumer buying will stop, dead in its tracks. But the good thing will be: a buying opportunity--but probably not.

Very astute post. It is always a stand off in economics. Management vs. Labor. ect.

 

[Howard]

The $US is declining and will continue because your economy has been totally mismanaged and your debt levels are getting to the point where no one wants to hold your money.

The US continues to run HUGE Trade defecits, your debt grows astronomically, compare that to Canada where the government posts a surplus, the defecit has been eliminated, and we are paying off our debt.

The bubbleheads on CNBC skirt the issue,but there is a grim reckoning, and don't blame Foreigners, you guys created this mess.

Interest rates fall, people refinance with a bigger mortgage instead of paying the damn thing off.

I remember when the $CDN was worth more than the Greenback, those days are returning.

 

[MasterBlaster]

Well I'm no fan of debt. For Myself, for others, and for my government.

However, The credit card crowd will rightfully point out that as a percentage of GDP the US debt level is actually going down (beleive it or not !)

That's cause the US economy is growing at a pace faster than debt accumulation.

Can this continue indefinitely... Well no I dought it. Especially when you factor in the so called unfunded and implied social obligations of the government, and the additional debt that may be aquired to support it.

One could make a case however, that Canada, by running a surplus, is actually growing slower than they could and their people will (somewhat) suffer a (somewhat) lower standard of living.

- Anyway that's the debtors argument. Which I don't necesarily believe but I posted it for your consumption.

 

[Marketneutral]

Well I'm no fan of debt. For Myself, for others, and for my government.

However, The credit card crowd will rightfully point out that as a percentage of GDP the US debt level is actually going down (beleive it or not !)

When you include "paper gain" home equity appreciation this is a true statement.

However, you do not get a profit until you sell...and you can not sell until you have a buyer.

I do not use home equity gains in any of my calculations and it is best left out of the GDP.  But it is not. 

Funny factoid about GDP.  They include social security as a "fixed income investment".  However, we know it has been spent.   

 

[alphabet soup]

It is doubtful that ever before in the history of the US has there been a federal government, both executive and legislative, as incompetent, venal and arrogant as this one.

I have more respect for a whore in the street than these fat cat plutocrat bullshit artists.

 

[Marketneutral]

It is doubtful that ever before in the history of the US has there been a federal government, both executive and legislative, as incompetent, venal and arrogant as this one.

I have more respect for a whore in the street than these fat cat plutocrat bull**** artists. 

Watch this for a couple minutes:

http://zfacts.com/p/461.html

Have a bucket handy.

 

[Lazarus]

It is doubtful that ever before in the history of the US has there been a federal government, both executive and legislative, as incompetent, venal and arrogant as this one.

I have more respect for a whore in the street than these fat cat plutocrat bull**** artists.

Yeh, At least a whore knows what they are.

 

[sgeeeee]

It is doubtful that ever before in the history of the US has there been a federal government, both executive and legislative, as incompetent, venal and arrogant as this one.

I have more respect for a whore in the street than these fat cat plutocrat bull**** artists. 

Yeah. You see that because you are paying attention. Most Americans are not.

 

[ShokWaveRider]

The US Has Oil Just take a look at the Oil Company Profits over the last year or so. As far as Canada is concerned, the Tar Sands do have a lot of oil but it is very expensive to extract product from them. I think the lack of confidence in the US worldwide, the growing hatred by more and more countries (Not Just The Middle East) and the soaring debt are the key contributors.

What I CANNOT understand is why the Government does NOT give a S@#T. AND WE ALL TOLLERATE IT!!!!! What a bunch of sheep we all are. Just like the government we all appear to talk a lot and do nothing. This writer included.

SWR

 

[Howard]

I have a very close friend in Florida, a Cuban, he now lives in Miami.

He paid $150,000 for his house a few years ago, he feels he could now get $400,000, wants to retire but to free up equity would mean living in places he would not want to live in.

Paper Gains.

Today on CNBC there will be a piece on Real Estate, is probably worth watching.

The US is the richest country in the world, it needs to stick to its' knitting, look after your own first, let the Foreigners solve their own problem, get between a fighting Husband and Wife, we all know how that ends.

 

[Eagle43]

http://www.publicdebt.treas.gov/opd/opdpdodt.htm

Current Debt as of 12/14/2005
Debt Held by the Public:  4,764,354,533,340.54
Intragov-mental holdings:  3,367,631,403,271.99
Total:  8,131,985,936,612.53

This is a lot of money, with over half owed to non-government types.

 

[Marketneutral]

That is just current account.

Take a peek at unfunded liabilities and trade balance.

 

[BigMoneyJim]

What I CANNOT understand is why the Government does NOT give a S@#T. AND WE ALL TOLLERATE IT!!!!! What a bunch of sheep we all are. Just like the government we all appear to talk a lot and do nothing. This writer included.

I voted. I complained. Seemingly everyone disagreed with me. (Well, just over 50% disagreed, but about 90% of the people I interact with disagreed.) I'm not sure what else to do except wait for the next election; how else can I constructively not tolerate it? Yet even with all that's wrong now I don't have a lot of hope for the next presidential term. Then again maybe next year's congressional election will reflect some dissatisfaction and influence the presidential race.