when and how does the dollar rally? or does it?

Discussion in 'Politics & Current Events' started by afgrijselijkheid, Nov 22, 2004.

  1. afgrijselijkheid

    Dec 29, 2002
    mokum
    Club:
    AFC Ajax
    ok i'm no financial wiz, so i'm asking for someone to explain to me how the dollar can rally at least a bit, when this may happen... or if it will happen

    i know bushco. has their "strong dollar policy" (which kinda reminds me of their "winning the peace" plan) and the commonkey in chief lectured us from chile that we need to deal with both long and short term deficits (snicker, then giggle, and finally guffaw) - so is he admitting, in his own special way, that we should expect a crap dollar until he is long gone from office? the strength of it can't all be tied to the deficit, right?

    this weak dollar business is killin' me since i earn in $ and spend in €

    thanks in advance
     
  2. Caesar

    Caesar Moderator
    Staff Member

    Mar 3, 2004
    Oztraya
    Not sure about the USD/Euro exchange rate, but our projections have the AUD firming from the current 77/78 cent mark to 80 cents + over the coming months, with no real indication of any correction. I'd say most of this would continue to be due to a further weakening USD rather than any real strengthening of our currency.
     
  3. Chicago1871

    Chicago1871 Member

    Apr 21, 2001
    Chicago
    Nat'l Team:
    United States
    Something big will have to happen for the dollar to rally even a little bit over the next 6 months. I don't see anything big happening for at least 16-20 months. Maybe a slow return, but nothing significant.
     
  4. Nico Limmat

    Nico Limmat Member+

    Oct 24, 1999
    Dubai, UAE
    Club:
    Grasshopper Club Zürich
    Nat'l Team:
    Switzerland
    Let me try, I just read about it in the Economist yesterday...

    Many economists try to estimate how much the dollar needs to fall in order to reduce the current account deficit. Some say 20 percent, some say 40. Right now America's borrowing is eating up around 75 percent of the excess saving of Japan, China, Germany and other countries with surpluses. The US usually borrows largely in its own currency, meaning a dropping dollar could wipe billions off the the value of foreigners' dollar assets.

    Others argue that a big fall in the dollar would only make a small dent in the US deficit. They see increased household saving (yeah right) and increased demand in Asia and Europe as the answer.

    Bottom line: right now the Euro got stuck shouldering all the burden of the falling dollar and I for one expect it to fall even more. Sorry Bluedaddy...
     
  5. 352klr

    352klr Member

    Jan 29, 2001
    The Burgh of Edin

    From what I understand it, part of the reason for the drop in the Dollar's value has been the abandoning of the "strong dollar policy" by Bushco. The strong dollar was the policy of all previous Treasury Secs. since Nixon took us off the gold standard. Bush did so in order to expand the export power of the United States for two reasons:
    1)Reduces trade deficit
    2)Increases manufacturing production and therefore jobs(Ohio and its electoral votes definitely factor into this).

    There's no link to this article without subscription, but I'll pm you an article from The Economist(Nov.13-19) entitled "Where Does the Buck Stop?"
     
  6. fidlerre

    fidlerre Moderator
    Staff Member

    Oct 10, 2000
    Central Ohio
    Jesus, I remember the good old days in college <5-6 years ago> when I traveled to Europe for school...the dollar was so strong it was just amazing. Everything was dirt cheap when you converted it. Going over there now, using the Euro is just straight up depressing.
     
  7. afgrijselijkheid

    Dec 29, 2002
    mokum
    Club:
    AFC Ajax

    yeah, try living here on the dollar
     
  8. 96Squig

    96Squig Member

    Feb 4, 2004
    Hanover
    Club:
    Hannover 96
    Nat'l Team:
    Netherlands
    Good for me though, I'll do big shopping when I go to the US after christmas this year... :)
     
  9. dreamer

    dreamer Member

    Aug 4, 2004
    The dollar will rally after the 2008 election. It's all in the script. You just need to take the time to read it.
     
  10. dreamer

    dreamer Member

    Aug 4, 2004
    Boy I miss those days when I simply bought anything I wanted in Europe and Australia, feeling like everything was a bargain there. A dollar was worth two Aussie dollars then. And only .9 dollar for a whole Euro.

    But then again who needs Europe and Australia when I can spend all my $100 savings here in the States. :)
     
  11. obie

    obie New Member

    Nov 18, 1998
    NY, NY
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    The Bush Admin's policy on the dollar has been confounding to people who work in currency exchange -- not because the dollar has dropped, but because Snow has been so nonchalant about it.

    There are advantages to a weaker dollar, but most of them are just temporary. As an importing and debtor nation we are eventually going to have to pay for this through inflation and much higher interest rates.
     
  12. dreamer

    dreamer Member

    Aug 4, 2004
    That's a good thing. The policy is working then.

    You give those guys too much clarity they'll run crazy with it and cause troubles. Better to keep them guessing.



    Exactly right. A temporary weak dollar but a strong dollar policy for the long term. Not an easy balance to maintain. That's why we should do away with all the polictical nonsense that makes no eco sense, such as raising taxes now.
     
  13. -cman-

    -cman- New Member

    Apr 2, 2001
    Clinton, Iowa
    Bascially we're fuXored. The only way the dollar comes back up to anything approaching the late '90's early '00's levels if any one or two of the following things happen a) The ecnomoy expands at a hot (>3.8%/yr) pace, b) the federal deficit shrinks significantly, c) the U.S. depends less on imports -- which a weak dollar should help with, b) saving rates in the U.S. increase about five-fold and we begin to take up our own slack in financing the deficit.

    Does anyone see a significant possibility of any of those, with the possible exception of "a" happening in the next two to five years? I thought not.

    An additional problem is that "c" thing. Our current economic health depends broadly on two sectors; consumer spending and the housing markets. Downward pressure on the dollar equals higher import costs -- lowering the balance of payments problem -- but putting price pressure on an hugely import-dedendent consumer marketplace. Inflation anyone? To fight inflation, the fed will continue to raise interest rates, thus making the housing market less atracctive.

    The result of a serious continued downward trend in the dollar then could be a flirtation with the dreaded stagflation, anemic economic growth combined with higher prices. Pretty nasty that.
     
  14. obie

    obie New Member

    Nov 18, 1998
    NY, NY
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    You know nothing about the power of the currency exchange markets. What wonderful new monetary or fiscal policy is Snow going to introduce "long-term" that's going to turn the dollar from "weak" to "strong"? Maybe we plan to use our military to liberate global forex markets...
     
  15. dreamer

    dreamer Member

    Aug 4, 2004
    The eco will be OK again after the 2008 election. Just need to put up with some nonsense for now.

    Don't forget. Eco is but one aspect of running a nation. For something more important, eco is sometimes expensable. Like someone said before, don't confuse money with power.
    https://www.bigsoccer.com/forum/showthread.php?p=3632660#post3632660

     
  16. obie

    obie New Member

    Nov 18, 1998
    NY, NY
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    I really don't want to know what BushCo thinks is "more important" right now than the long-term health of the national economy.
     
  17. dreamer

    dreamer Member

    Aug 4, 2004

    With this kind of arrogance......... I hope for your sake your wife put some cash away under the mattress so you won't lose everything in the market.
     
  18. dreamer

    dreamer Member

    Aug 4, 2004
    Somehow you seem to think Bush is in control of everything. There's only so much he can do. This country is run by the media.

    https://www.bigsoccer.com/forum/showthread.php?t=148325

    Just don't feel typing everything over again.
     
  19. -cman-

    -cman- New Member

    Apr 2, 2001
    Clinton, Iowa
    :confused:

    The ecology will be okay after '08? If you mean the econ. what crystal ball do you have that says so? If the econ., as you say, does not really pick up a big head of steam before then the deficit will continue to climb. One of the primary contributors to the present meteoric drop in the dollar -- Why do people say meteoric rise? Meteors, by definition FALL. -- is the lack of big institutional borrower to continue to finance same. See bond rates.

    Therefore, even if you are correct and some mysterious econ. turnaround does happen beginning in '08, we will still be in a huge hole. Much bigger than in the Clinton-era runup.

    As for your assertion that the President isn't in control of everything; true, I guess. But he can have a salutory effect by proposing, fighting for and getting passed economically sound fiscal and budget policies. Instead he is going in the absolute opposite direction and allowing the dollar to plunge in order to shore up our current acount numbers while risking economic ruin for the middle class as a consequence. All so he can have his precious tax cuts and war too.

    As for the media... well if you mean the market, yes. If you mean invisible media puppet-masters, you're loony.
     
  20. dreamer

    dreamer Member

    Aug 4, 2004
    You're not the first confused soul I've seen around here. And just like them, you have no hesitation in calling people loony as well.

    The crystal ball I'm using is the old and reliable EcoLeafreader DXII. I'll dust it right now again and see if it's telling me anything different.
     
  21. dreamer

    dreamer Member

    Aug 4, 2004
    No. It's still saying the same thing, 2008. Deal with it.
     
  22. obie

    obie New Member

    Nov 18, 1998
    NY, NY
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    Thus said the person who confidently predicts an economic turnaround in 2008.
    "Cash under the mattress" could very well end up being the worst investment possible under the upcoming inflationary period, if this dollar slide doesn't end soon.
     
  23. dreamer

    dreamer Member

    Aug 4, 2004

    Hey any deflated money is better than having nothing at all, according to some stories I've heard. One day you'll thank your wife for doing the right thing.
     
  24. Chicago1871

    Chicago1871 Member

    Apr 21, 2001
    Chicago
    Nat'l Team:
    United States
    Instead of throwing around ignorant remarks about people who are actually posting coherently, try backing up your predictions that after the 08 election the dollar will magically rebound. "I've heard stories" doesn't count as a support. At this point I'll accept "I think this because..." followed by some semblance or coherent thought that smacks of economic knowledge, if only a little, tiny bit.
     
  25. dreamer

    dreamer Member

    Aug 4, 2004
    Instead of calling people ignorant, why don't you learn how to read first?

    What I'm predicting is, the economy will not rebound in any meaningful way until at least after the 2008 election, barring any significant development, unless the media changes its mind about Hillary Clinton. The next several months, if we get a significant run-up in the market, it will be the last liquidity driven mirage of prosperity we'll be seeing for some time.

    By the way I wasn't the attacker. Was in self-defense. If you could read the messages above.
     

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