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Derico
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US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:27 pm

For the first time in modern history on Monday, the US dollar has fallen to multi year lows against currencies in all continents. The US dollar has lost 60% of it's value against the Euro, and is now worth less than the Canadian dollar, 1 US$ worth 0.98 CAN$. The US dollar is also nearing parity against the Aussie, and close to breaking 100 against the Japanese Yen.

The dollar is now worth less against the Russian Ruble than at any time in the last decade, and is also hitting fresh lows across Asia ex-Japan. In Latin America the dollar has hit historic records lows against the Brazilian Real, and in Peru, Colombia, and Chile. It is at multi-year lows in Mexico and Uruguay.

More and more US analysts, the latest being Warren Buffett, say the US is in a 'recession', and worse, to many it is fiscally and monetarily in it's worst shape in 80 years. Many economic historians are baffled at the collapse of the American currency, and of the trust of the world in the United States economy, seen around the world as in steep decline in power and prestige.

Governments worldwide are scrambling to get rid of excessive positions in the currency, as well as pricing assets in their own or other currencies, and creating programs to value trans-border trade not based on US dollar values.

http://www.time.com/time/business/ar...1718834,00.html?xid=rss-topstories

http://www.nasdaq.com/aspxcontent/Ne...02261538RTTRADERUSEQUITY_1255.htm&
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copySouthwest
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:34 pm

Some New York stores prefer euros

http://news.bbc.co.uk/1/hi/business/7273612.stm

I was reading this on BBC News just a short while ago. The article suggests that some New York stores are now preferring transactions in Euro.

The low value of the dollar is no good for the world economy. I hadn't realised that the US dollar is now weaker than the Canadian dollor. It looks like tough times ahead.
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NeilYYZ
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:38 pm



Quoting CopySouthwest (Reply 1):
The low value of the dollar is no good for the world economy. I hadn't realised that the US dollar is now weaker than the Canadian dollor. It looks like tough times ahead.

For a couple of days a few months ago it was worth about 1.10 USD. It's sure nice for me though, going to the US now means my dollar is worth more and there are less taxes than up here. Killer for the Canadian stores though, but I'm taking advantage while I can.
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LHStarAlliance
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:38 pm

Best time to buy Dollars ...

This won't remain for ever !

Constantin
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MD11Engineer
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:41 pm

Sooner or later the oil countries will demand Euros or other stable currencies as payment for oil.

Jan
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mt99
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:43 pm



Quoting MD11Engineer (Reply 4):
Sooner or later the oil countries will demand Euros or other stable currencies as payment for oil.

Thats the kicker isnt it? I am not a currency expert - but from what i have read that would be very bad news for the US.

Who would in their right mind want to be the next president?
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LHStarAlliance
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:44 pm



Quoting MD11Engineer (Reply 4):
Sooner or later the oil countries will demand Euros or other stable currencies as payment for oil.

Well you can see it this way ...

The Problem is that Every Dollar which is going to the Saudis is new Printed . They won't accept this much longer .


Constantin
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oldeuropean
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:44 pm

Quoting LHStarAlliance (Reply 3):
Best time to buy Dollars ...

No, analysts say that the worth of the US Dollar will decline further on.

Axel

[Edited 2008-03-03 09:46:13]
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LHStarAlliance
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:47 pm



Quoting Oldeuropean (Reply 7):
No, analysts say that the worth of the US Dollar will decent further on.

Come on all that analysts don't have any clue on what they say ... they're laughable


Constantin
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planespotting
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:48 pm



Quoting Derico (Thread starter):
Many economic historians are baffled at the collapse of the American currency, and of the trust of the world in the United States economy, seen around the world as in steep decline in power and prestige.

Thank you War in Iraq.

(and other things too)
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NoUFO
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:51 pm



Quoting LHStarAlliance (Reply 8):
Come on all that analysts don't have any clue on what they say ... they're laughable

Are you saying that you have better insight than analysts have? That would be pretty ... well: "self-confident".
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halls120
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:55 pm



Quoting Planespotting (Reply 9):
Thank you War in Iraq.

(and other things too)

You can thank decade after decade of deficit spending by the republicans and democrats on the Hill, all who never saw a pork barrel project they couldn't resist funding.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
planespotting
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 5:59 pm



Quoting Halls120 (Reply 11):
You can thank decade after decade of deficit spending by the republicans and democrats on the Hill, all who never saw a pork barrel project they couldn't resist funding.

As I said "And other things too."

But the Iraq war not only brought America way down in the eyes of most foreigners, it also increased our deficit spending to its highest point since Reagan. At least back then we looked better in the eyes of the world - the berlin wall fell, the USSR turned democratic and we were the only Super Power.

Now, people can see that there are many other places to stick their money for a far better ROI, not to mention with more stability and goodwill, than the United States.

The Iraq war was the catalyst in terms of goodwill. It'd be interesting to see how much Goodwill (the accounting value) the US lost because of our foreign policy decisions in the past few years.

Can any accountants out there figure it up?
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MD11Engineer
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:03 pm

The other problem might be if the Chinese decide that their USD reserves are losing too much value too fast and decide to sell them off for Euros or Yen. This might make the USD drop even lower. On the other hand, now is a good opportunity for EADS to build this factory in Mobile, AL. and maybe even move more manufacturing to it (not just the final assembly, but also e.g. manufacturing of fuselage sections).

Jan
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LHStarAlliance
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:07 pm



Quoting MD11Engineer (Reply 13):
The other problem might be if the Chinese decide that their USD reserves are losing too much value too fast and decide to sell them off for Euros or Yen. This might make the USD drop even lower.

This would produce a crash of the Dollar , so the Chinese have a Problem . If they sell their Reserves their Money will be ~40% less .
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yowza
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:15 pm



Quoting MD11Engineer (Reply 4):
Sooner or later the oil countries will demand Euros or other stable currencies as payment for oil.

This may happen sooner than we all think. Given the fact that the oil-rich like European toys which are attached to European economies sooner or later they will ditch the dollar for the Euro if they keep making XE sacrifices.

YOWza
 
RacingGreen07
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:16 pm



Quoting LHStarAlliance (Reply 8):
Come on all that analysts don't have any clue on what they say ... they're laughable


Constantin

Excuse you? These are analysts from the Worlds biggest companies. These people don't get paid highly to be "laughable" . For you to say they don't have a "clue" in what they "say" is pretty damn laughable on its own...

If they predict the Dollar is going to decline its not the right time to buy. Sure analysts can be wrong, but when most of them (all from different countries, companies and perspectives) say its going to decline further I feel they may be right.
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NoUFO
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:19 pm



Quoting LHStarAlliance (Reply 14):

This would produce a crash of the Dollar , so the Chinese have a Problem . If they sell their Reserves their Money will be ~40% less .

Maybe you want to read this article on exchange reserves and oil, Mr Greenspan Jun.:

http://www.feasta.org/documents/papers/oil1.htm
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jcs17
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:31 pm

The Chinese don't want to sell their US currency at a loss, it would hurt their economy, as well as America's. They especially aren't going to dump it so they can buy an overvalued Euro. The only way that they would sell at a loss is if the economy completely crashed, a la 1929. In my opinion, what is happening to the dollar vs. the Euro is a large market correction, and by late Spring there should be signs of recovery from the US dollar. By next year, the Euro and the Dollar should be traded at a 1:1 rate.
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Pope
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:32 pm

Thank you Ben Bernanke. His idiotic interest rate policy is what is behind the wave of US$ selling. Right now interest rates in Europe are much more attractive to money market players than those in the US. Instead of popping the asset pricing bubble Ben wants to continue it by making an effectively unlimited supply of cheap money available to the market.

As any student of Eco 101 can tell you, as the supply of something increases, it's price will fall.

As Ben continues to go before anyone with a microphone and say that the Fed will continue to add liquidity to the market, the dollar will continue to drop. In contrast the ECB leadership has shown some balls and has refused to allow the market to dictate what sound fiscal policy looks like. Ben Bernanke is an absolute idiot and is destroying this country's economy. He allows blow hards like Jim Cramer (whose only claim to fame is that he listened to his wife before the October 1987 market crash) to bully him into rate cuts which he knows will create inflation and further devaluation of the US$'s purchasing power around the world.

The current economic crisis was caused by cheap money. It create a fundamental disconnect between risk and reward. The solution to the problem cannot be more cheap money. Doing the same thing and expecting a different result is called insanity.

While the populist on this forum will demand that the government do something to bail out the retards who overspent on their houses the sad truth is that somebody has to take the loss. If you bought a house for $500,000 and it's now worth $400,000 somebody is going to lose $100,000. That somebody should be the person who decided to buy the house. Until we accept that, the Fed will continue to try to lower rates (real interest rates are already negative) in a futile attempt to stem the tide of bad economic news.
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Newark777
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:51 pm



Quoting RacingGreen07 (Reply 16):
Excuse you? These are analysts from the Worlds biggest companies.

You mean the same ones who saw subprime debt as a good long-term investment?  Wink

I just hope the Fed gets their act together before we end up like Japan, with a stagnated economy for the better part of a decade, devalued currency, and interest rates stuck around ~1%. That looks like where we're headed if current trends continue, but of course we aren't exactly close to that level yet.
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iliribdl
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 6:58 pm

This is why I'm moving back to Europe as soon as I finish college.  Wink
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Arniepie
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:00 pm



Quoting Pope (Reply 19):

I'm with you on your analysis.
I suspect that they are betting on the willingness of the rest of the world to keep financing the deficits, even with absurdly low interest rates and growing inflation and completely ignoring the bad position some American citizens put themselves into.
They're gambling that the almighty greenback will keep on being the worlds preferred currency for key goods as minerals and metals and oil&gas.

some big gambles to take and it can have catastrophic effects if it doesn't go as they wish.
[edit post]
 
andessmf
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:02 pm



Quoting RacingGreen07 (Reply 16):
Quoting LHStarAlliance (Reply 8):
Come on all that analysts don't have any clue on what they say ... they're laughable

Excuse you? These are analysts from the Worlds biggest companies. These people don't get paid highly to be "laughable" . For you to say they don't have a "clue" in what they "say" is pretty damn laughable on its own...

I have to agree with Constantin. These 'analysts' seem to only have great 20/20 hindsight. For those who have studied a little economic history could have seen this coming years ago.

The basic problem is/was that with loose, easy to get money, all sorts of people, companies, governments jumped into the investment arena w/o much regards to price and or performance. What was created was a classic bubble. In a few years, this period will be well known as a 'Global Asset Bubble'.

And guess what happens with bubbles?

They pop!

And with all the money that poured into all sorts of projects, the losses will be greater than already known. Don't believe for a second that this will be limited to the US alone.

Quoting Pope (Reply 19):
Thank you Ben Bernanke

Among others. At this stage, the best solution is for the government to do at what is best: nothing.
 
mt99
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:06 pm



Quoting AndesSMF (Reply 23):
Among others. At this stage, the best solution is for the government to do at what is best: nothing.

But they cant just sit and watch. The cynic in me tells me It is an election year and i am sure some President (who will remain nameless) would not want to go down in history as leaving the country in economic trouble.

So they have to keep the economy at float (realistically or fictitiously) until the end of the year. Then it becomes the next guy's (or gal's) problem.
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Flighty
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:11 pm



Quoting Pope (Reply 19):
Instead of popping the asset pricing bubble Ben wants to continue it by making an effectively unlimited supply of cheap money available to the market.

As any student of Eco 101 can tell you, as the supply of something increases, it's price will fall.

I am inclined to agree that Bernanke had no business chasing the f*cking stock market and the f*cking real estate prices using the Federal Reserve rate.


However, let us calm down. Mr. Ben is a well trained economist, far better than you or I. He is well aware of the dangers of inflation. I think he is not concerned at all about a weak US dollar, because he has said so.

Ben knows that a weak US dollar is the ONLY way we can cut imports. The ONLY way we can increase exports. It is unavoidable -- and it is good -- that the USD should depreciate. To artificially avoid that, we would end up defending a high USD. That would be pure lunacy, which could lead to a currency meltdown.

As it is, things are becoming more stable all the time. The lower the USD goes, the more stable its backing becomes.

What we need is an honest valuation of what the USA is worth to the world economy. We are worth a lot. So we have no reason to fear a dollar devaluation. It is a good thing, in many ways. Inflation, not so good. But the currency itself, it's great.
 
Dougloid
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:13 pm



Quoting JCS17 (Reply 18):
The Chinese don't want to sell their US currency at a loss, it would hurt their economy, as well as America's. They especially aren't going to dump it so they can buy an overvalued Euro. The only way that they would sell at a loss is if the economy completely crashed, a la 1929. In my opinion, what is happening to the dollar vs. the Euro is a large market correction, and by late Spring there should be signs of recovery from the US dollar. By next year, the Euro and the Dollar should be traded at a 1:1 rate.



Quoting Pope (Reply 19):
As any student of Eco 101 can tell you, as the supply of something increases, it's price will fall.

And how would you analyze the current price of oil this day? There's more available than ever before and yet? Likewise, corn. There's more than there ever was before. But it trades at record highs.

That should tell you, m'dear fellow, that there's more at work here than mere supply and demand. In fact, currency rises and falls are beyond my ken, as they are to most folk. It's a fairly abstract and technically dense discipline not amenable to one liners.

Quoting Pope (Reply 19):
The current economic crisis was caused by cheap money. It create a fundamental disconnect between risk and reward. The solution to the problem cannot be more cheap money. Doing the same thing and expecting a different result is called insanity.

that's an opinion and a debate that's been going on ever since time began. I think William Jennings Bryan gave a speech about it which was famed far and wide for asking whether mankind should continue to be crucified on a cross of gold.

and in fact this discussion has been going on here at a.net as long as I've been around. Every time there's a dollar downtick, everyone's ready to pull down the curtain and declare us dead and buried.

Fact is, currency markets are so interrelated that it is one place where there really is a global market. What it means to the man in the street, unless he's taking a foreign vacation, is a whole lotta nuthin.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Rara
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:13 pm



Quoting IliriBDL (Reply 21):
This is why I'm moving back to Europe as soon as I finish college. Wink

That wouldn't make that much sense as long as you don't plan to invest heavily in non-European assets then. Right now, your dollars aren't worth much in Europe, and you might be better off spending them in America.

For a regular citizen, the exchange rates aren't all that important. In fact, the dollar weakness is one huge support program for the US economy, whose products are now very cheap on the world market. It's amazing how well e.g. Airbus keeps up with the fact that its airplanes are comparatively 60% more expensive than just a few years ago.

I for one would be relieved if the Euro lost some of its strength soon. It's getting threatening to our export-based economy.
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alberchico
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:23 pm

Can anybody explain to me how can the goverment make the dollar go up or at least arrest its fall??? Economics is not my strong area.
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LHStarAlliance
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:32 pm



Quoting NoUFO (Reply 17):
Maybe you want to read this article on exchange reserves and oil, Mr Greenspan Jun.:

http://www.feasta.org/documents/pape...1.htm

Mr Greenspan is not an Analyst , he's the former FED Boss .

Quoting AndesSMF (Reply 23):

I have to agree with Constantin. These 'analysts' seem to only have great 20/20 hindsight. For those who have studied a little economic history could have seen this coming years ago.

The basic problem is/was that with loose, easy to get money, all sorts of people, companies, governments jumped into the investment arena w/o much regards to price and or performance. What was created was a classic bubble. In a few years, this period will be well known as a 'Global Asset Bubble'.

And guess what happens with bubbles?

They pop!

And with all the money that poured into all sorts of projects, the losses will be greater than already known. Don't believe for a second that this will be limited to the US alone.

Exactly . There is too much money searching for investment all around the world .
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Arniepie
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:35 pm



Quoting Flighty (Reply 25):
However, let us calm down. Mr. Ben is a well trained economist, far better than you or I. He is well aware of the dangers of inflation. I think he is not concerned at all about a weak US dollar, because he has said so.

There are far more , well trained (even better the BB) , that have some deep-going worries about how the US fed uses the interest rates-trick to try to achieve different things (consumer borrowing, import/export ratio,investments into industrial projects,...).
This will not keep on going forever, at some point you reach a level whereby lowering interest rates just won't cut it any longer and with the level they are now that point seems to be reached.
Reality is catching up quickly and some more fundamental things are going to have to happen now.

Also the positive effect on import (declining) and export (rising) is of very limited value.
Fact is that import (in$-value) can only go down for some products but will at least stay the same (and almost certainly go up) for others like OIL/Gas/Minerals negating most of the gains made.
Export will be easier but only for a limited amount of products.
Even with a weak dollar a lot of durable goods (mainly consumer goods) won't find much more takers in the rest of the world.
[edit post]
 
Newark777
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 7:37 pm



Quoting Dougloid (Reply 26):

And how would you analyze the current price of oil this day? There's more available than ever before and yet? Likewise, corn. There's more than there ever was before. But it trades at record highs.

If people are willing to pay that much for a barrel of oil, that's how much it's going to trade at. That's exactly supply and demand. With China and India sucking up so much petroleum recently, it should come to no surprise that oil is priced where it is.
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Pope
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 8:00 pm



Quoting Dougloid (Reply 26):
And how would you analyze the current price of oil this day?

Personally I believe that the price of oil is being inflated because of the political instability risk premium that surrounds that commodity. While supply and demand equilibrium establish long-term prices, short-term market price always allows for the ineffiicency of information flows.

Secondly, a statistician friend of mine said that he correlated the price of oil over the past year (14 months) to the value of the US$ and the charts very statistically dependent. Though I haven't checked the data myself, so I can't vouch for it, it seems that in Euro terms oil has been pretty stable. I'll see if I can pull some of the data later and see if I can verify this hypothesis.

Quoting Flighty (Reply 25):
Ben knows that a weak US dollar is the ONLY way we can cut imports. The ONLY way we can increase exports. It is unavoidable -- and it is good -- that the USD should depreciate. To artificially avoid that, we would end up defending a high USD. That would be pure lunacy, which could lead to a currency meltdown.

I don't believe that the fed rate cuts were an attempt to increase exports. In fact, the fed started cutting as the credit markets collapsed. Therefore the causal relationship between fed rate cuts seems to be more closely related to financial market turmoil rather than sound long-term fiscal policy or structual deficit (either trade or budget) concerns.
Hypocrisy. It's the new black for liberals.
 
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casinterest
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 9:33 pm



Quoting Dougloid (Reply 40):
What's driving the price is speculation in commodity futures trading.

The thing with oil, is that it has a logarithmic supply demand curve.

There is a heavy - heavy demand for oil, and what is currently occurring, is that the supply is matching the demand, and people are willing to pay the price that is being demanded.

The theory would be that if the price of gas goes up demand goes down, but so far in the US, that is not proving to be true. However the US economy is suffering due to the increased price.


Then end of all of this will be how much more the dollar falls before stabilization occurs.
Where ever you go, there you are.
 
Dougloid
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 9:38 pm



Quoting CasInterest (Reply 42):
The theory would be that if the price of gas goes up demand goes down, but so far in the US, that is not proving to be true. However the US economy is suffering due to the increased price.


Then end of all of this will be how much more the dollar falls before stabilization occurs.

Well, you're right about that. There's inelastic short term demand for motor fuel and heating oil, until people develop alternatives-like telecommuting.

Do you ever consider how much energy could be saved if every person who could work from home did so?

Entropy will do what it does here at some point or other, that's for sure.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
andessmf
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 9:43 pm



Quoting Dougloid (Reply 43):

Does transportation not take an inordinate percentage of the world's supply?
 
Pope
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 10:27 pm



Quoting Dougloid (Reply 40):
What's driving the price is speculation in commodity futures trading.

I ran some preliminary numbers.

The price of oil on Jan 1, 2006 was $65.51/bl. The Euro was at $1.1842. The Euro equivalent value of that barrel of oil was therefore €55.32. The € equivalent value on 2/1/08 was €64.19 a change of 16%. The dollar equivalent change was 45.5%.

To me this shows that though oil has certainly gone up in the 2 years 2 months, the primary driver has been the devaluation of the US$ an not the rise in the value of the commodity.
Hypocrisy. It's the new black for liberals.
 
Newark777
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 10:34 pm



Quoting Dougloid (Reply 40):
Commodities trading is a wonderful thing to behold.

I'm more than aware of the world of option trading, but this speculation is still dependent on analyst expectations on supply and demand. If anything, though, it adds to the volatility of the market as opposed to if only those involved with creating and consuming the commodity traded it. On the other hand, it helps the market by adding liquidity that would otherwise not be there.
Why grab a Heine when you can grab a Busch?
 
UTA_flyinghigh
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 10:45 pm

At least it's good for Euro tourists. Just spent 5 days here and I went by with $500 and bought stuff at the Boeing store and other souvenirs at IAH. Bouahahahahaaaa.

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andessmf
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 10:56 pm



Quoting UTA_flyinghigh (Reply 49):
At least it's good for Euro tourists

We had a guy from Germany that came to our office for a business meeting. He left with an extra bag...

Ditto for my wife's cousins last year. They live in Switzerland. They did quite a bit of shopping here.

Quoting Newark777 (Reply 48):

Speculation works well under certain circumstances. But if with little skin in the game, you can achieve high gains, the normal restraints are removed.

That's why housing went thru the roof. With no money down, and the cashback you could get to pay off the mortgage till the sale, pricing went thru the roof.

But Pope also noted how the devalued $$ is more at fault for the price increase. The last increases came right around the time the interest rates were lowered.
 
fumanchewd
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RE: US Dollar Plunges To Record Lows Across Globe

Mon Mar 03, 2008 11:07 pm



Quoting Derico (Thread starter):
ay.

More and more US analysts, the latest being Warren Buffett, say the US is in a 'recession', and worse

That's strange. The accepted standard is that a recession is after two quarters of negative economic growth. The economic growth has been stagnant but there has not been a negative quarter yet. Although I do expect that the next quarter will be in the red!
In the time of chimpanzees, I was a monkey...
 
andaman
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 4:04 am



Quoting AndesSMF (Reply 50):
Quoting UTA_flyinghigh (Reply 49):
At least it's good for Euro tourists



Quoting AndesSMF (Reply 50):

We had a guy from Germany that came to our office for a business meeting. He left with an extra bag...

Ditto for my wife's cousins last year. They live in Switzerland. They did quite a bit of shopping here.

It seems the Euro tourists really have learnt to shop in US now, you notice that in Finland too.
And from US you can bring so much more...2x 32kg checked baggage in Y on a scheduled flight, comparing to 1x 20kg from the other directions.
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
khelmDTW
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 5:09 am

That is what happens when our currency is based on nothing really concrete. Send my thanks to Richard Nixon.
"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration"
 
rwsea
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 6:46 am



Quoting Newark777 (Reply 46):
Much of what you write on the US seems to be of the doom and gloom variety, and for everyone else you have the "can do no wrong" attitude. China is still becoming industrialized, with their currency still pegged to the USD, but their country is far from becoming a force in anything other than raw numbers. They create cheap exports for the rest of the world, and are far from the intellectual capabilities of Japan, Europe, and North America. And they must get over the gross human relations violations before they can become true global players. Sure, China is a force to be reckoned with, but let's not christen them the best before their due. Remember, ten years ago everyone thought of Japan as we see China now.

I read a recent article in the Economist about the infrastructure boom in China. Everywhere they're building new roads, rails, airports, utilities, etc. In 20 years, China will have built more roads than the entire US Interstate system. Meanwhile, infrastructure in the US is falling to the ground (e.g. Minneapolis) and we're wasting billons of dollars a month in Iraq. China may be behind the US now, but they're rapidly catching up on all fronts. The US is not making these types of investments for the future, while continuing to charge needless wars and everything else to a credit card. Hold on folks, this is just the beginning.
 
khelmDTW
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 7:35 am



Quoting RwSEA (Reply 43):
I read a recent article in the Economist about the infrastructure boom in China. Everywhere they're building new roads, rails, airports, utilities, etc. In 20 years, China will have built more roads than the entire US Interstate system. Meanwhile, infrastructure in the US is falling to the ground (e.g. Minneapolis) and we're wasting billons of dollars a month in Iraq. China may be behind the US now, but they're rapidly catching up on all fronts. The US is not making these types of investments for the future, while continuing to charge needless wars and everything else to a credit card. Hold on folks, this is just the beginning.

Your gift of foresight is incredible. That is so true, we keep throwing our money away, at the cost of our own infrastructure and economy. Something needs to change.

This may sound ignorant and heartless to some, but we need to stop interfering in others business, shaping countries, Aiding countries, and creating the world as we want it, in our image. We need to focus on helping ourselves before we even think of helping others. This country is falling into disrepair. Not only roads and infrastructure, but the Economic and Educational system (cough, price of tuition, cough, cough). Once we get these things in order, THEN and only then should we begin aiding the other countries or changing the world. Those things cost money that WE DO NOT have.
"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration"
 
Klaus
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 8:11 am



Quoting MD11Engineer (Reply 4):
Sooner or later the oil countries will demand Euros or other stable currencies as payment for oil.

They're gradually shifting to it anyway:

Quoting Pope (Reply 36):
To me this shows that though oil has certainly gone up in the 2 years 2 months, the primary driver has been the devaluation of the US$ an not the rise in the value of the commodity.

Although that probably works only because the strong demand makes it a seller's market.
 
Flighty
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 8:42 am



Quoting ArniePie (Reply 30):
This will not keep on going forever, at some point you reach a level whereby lowering interest rates just won't cut it any longer and with the level they are now that point seems to be reached.

My instincts (which are usually good) tell me that you are right. However, Bernanke is exceedingly well aware of the potential dangers here. I see no reason why he should be corrupt. If he is, he needs to step down now.

But he's certainly aware of basic central bank strategic planning. I give him the benefit of the doubt that he has a plan. It can't be as stupid as it seems. Just can't be.

Quoting Klaus (Reply 45):
Although that probably works only because the strong demand makes it a seller's market.

Yes, our oil demand remains strong. But adjustments are being made. Decisions change with $100 oil inside the USA (even if Europe is not feeling a similar pinch).

Thanks to technology, we have a number of options over time to soften the impact of high fuel prices. Plug-in hybrids are a good option. Zero gas per day for the typical commuter. That will have an effect. Over time, you will see we make new decisions about energy. This is simply the outgrowth of $100 oil and its sturdy pressure on our national technology.
 
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Zkpilot
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 10:46 am



Quoting Alberchico (Reply 28):
Can anybody explain to me how can the goverment make the dollar go up or at least arrest its fall??? Economics is not my strong area.

The government (or its agents in this case the Federal Reserve) controls how much money is circulating in the market and also sets interest rates. If interest rates go up, people from other countries see that by putting their money into bonds/banks etc in the country with a higher interest rate, they can get better 'safe' returns for their money. If interest rates fall then they earn less interest on their money as so pull that money out.
Now the dollar rises and falls based on demand for that dollar... ie if people are selling US$ and buying Euro$ instead (because the Euro has higher interest rates amoungst other things) then the US$ will fall as it is not in demand and being sold whilst the Euro$ will rise as it is in demand.
Around the world at the moment there is a lot of what is called "carry-trade" that is people borrowing funds cheaply (mostly in Japan where the interest rate is close to 0%) and buying up higher yielding currencies (Aus$, NZ$, Euro$, Pound, etc). In these countries yields from interest are often 300-800 basis points (3-8% pa interest rates) higher than in say Japan or other places. So you could effectively borrow say $10,000 worth of Yen in Japan, use these to buy up Aus$, NZ$ etc and buy government (or other) bonds and get paid say 7% interest on them whilst not paying virtually any interest on your loan.

So for a government to make its currency go up, it either has to raise interest rates, buy back its own currency (and sell other currencies), reduce inflation (inflation devalues money), or issue less money.

Hope that helps.  Wink
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cpd
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 11:07 am

This low dollar is wonderful news - I spend money in the USA - and contribute a little to your economy. Plus I don't get ripped off on camera lens prices charged here.

I almost snapped up a 300mm F/2.8 the other day at a great price - yes, it was a Nikkor as well. I waited too long, deal finished.  Sad
 
MD11Engineer
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RE: US Dollar Plunges To Record Lows Across Globe

Tue Mar 04, 2008 12:17 pm

Another thing to cushion the price of oil are second generation bio fuels being developed now. Instead of just using part of the plant (like seeds), they use the whole plant and are thus more efficient.

Jan
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