Dollar Going To ######, What Should I Do?

[Yangpuss]

Thanks for the education, Bizz. That was very enlightening.

I understand now why gold makes some sense as the standard--unlike wheat or rice, it can't spoil (or am I wrong about that? How long can dried rice remain good?) Hmmm..for that matter, why shouldn't wine be the standard, as it only gets better with time???

Ultimately, since the sustaining of life is what we all want, it seems that a more logical standard of exchange would be clean air, water and uncontaminated earth that produces healthy food. You can bet those things are going to be very scarce in the years to come. I would love to buy some, if I could find them in SE Asia.

Of course, unless you can put them in a bank, one runs the risk that someone will steal them from you. Desperate people are known to do such things.

[LivinLOS]

And banks collapse or the assets held within them is inflated to a tiny amount of its worth...

Buried treasure endures millenia !!

[Harmonica]

The experts said the U.S. trade deficit was behind the dollar's decline, which was nonsense.

The fellow in the street says the same -- or has he learned this from the experts?

Fact is, albeit logical, there is NO correlation between the USD and the Deficit!!

 

er.. How on earth does an fiscally educated person get this idea..

Deficit = printing money and or borrowing (in this current bubble they appear to be running the presses as fast as the ink will dry)... America is printing its money and handing it to the Chinese and other trading partners to hold. In effect this balance only continues for as long as the Chinese (and others) wish to keep taking them.. As they get more of them and they cant find things to buy from the US to balance the load more hit the 'market' or simply get stockpiled (in gold ?).. A very astute point was made in that its not who holds the assets its where its flowing.. If they keep accumulating more then need to make it 'flow' somewhere to be useful..

Quite simply common sense tells you when you make more of an item and flood the market the intrinsic value of that item goes down.

Look all through history.. Almost every time fiat money has not been backed by commodities it has been printed to worthlessness.. This is historical fact.

Read 'Financial Reckoning Day' (its funny) for examples dating right back to the earliest experiments with paper money to see this effect in action time and time again. Read up on John Law (one of the architects of paper money) and how he inflated himself to one of the richest men in Europe until they saw the emporer had no clothes and he ended life destitute.. Was it Pancho Villa (it was one Mexican bandito turned presidente and his name springs to mind) who created his own notes and then inflated himself to worthlessness (this is what a deficit does).. Look at the german post war cycle.. Look at every case of paper currency printing (even Alan 'bubbles' Greenspan says we are in a point in fiscal history we have never reached before)..

There is a real possibility of global financial meltdown due to this debt crisis.. I am not saying its a high probability but I am saying that those that protect thier assets with 'hard' currency would make out like bandits 'if' this event happens.. They will also do very very well if this event even becomes more likely (and it is doing).. Its simply another hedge..

OK then, I will offer this in response to your question stated in the first line, namely, "How on earth does an fiscally educated person get this idea?"

Its called EVIDENCE! (Part 1)

I showed a chart of the USD and Dow Jones together and showed clearly that there was little correlation between the Dollar and the Economy. The correlation in fact is so low that its not even worth pursuing.

But you ignored that piece of evidence despite the fact that the US Govt. uses the exact same charts in their work and so do the hundreds of other agencies that work with similar data.

These charts are just a simple representation of the ACTUAL progression of the index or price and there is no TECHNICAL analysis attached or included.

So this dispenses with the liability of "fundamental versus technical" diatribes.

So, concluding Part 1 -- the evidence (available free of charge at US Govt. sites and on hundreds of other sites) clearly indicates that the premise that the Dollar and Economy go hand in hand -- is FLAWED and untrue.

[chuchok]

The wifes brothers mate (Who drives a tuktuk) tells me that the USD will be low for about a year.

[Harmonica]

Its called EVIDENCE! (Part 2)

Trade Deficit and USD:

Economists have been on the wrong side of the Trade Balance figures for 30 years.

The Trade Deficit has expanded ALL THE WHILE that stocks/economy have risen.

As stocks were soaring and the economy was expanding from 1982 to 1987 and then again from 1990 to 2000 and then again from 2002 to the present, the annual trade deficit grew and grew. This is a fact.

Want to challenge this fact, amigo?

What economists have on their side is lots of logic --but, when do facts contradict

logic? ..... When one's premises are wrong.

The premise that an expanding trade deficit is bad for the economy has been wrong for at least a third of a century. As the trade deficit was rising, economists

should have been recognizing it as a sign of high consumer optimism and retail

activity in the US.

Don't believe this? Then ask yourself why Germany has an unemployment rate of 11.4% and a growing recession while it sports a PERSISTENT trade surplus?????

I rest my case, Your Honor!

End of Part 2.

[Harmonica]

Chart courtesy of US Bureau of Economic Analysis

1960-2002

[Harmonica]

Ouch! That the Trade Deficit chart. Only that part of the image came in.

[Harmonica]

The wifes brothers mate (Who drives a tuktuk) tells me that the USD will be low for about a year.

My TG on the other hand says that her uncle (who sleeps in a tuktuk) said that Thaksin (who drives Thailand) is not telling anybody why he's been BUYING dollars bigtime.

[LivinLOS]

As I know you like charts

The interest rate boost for the dollar didn't last more than a week. The dollar failed to break above the downtrend established since last March. The news of record 2004 trade gap last week apparently broke the dollar's back.

I will happily respond to your comments re deficit and dollar but am a little pushed on time.. Perhaps later today..

[LivinLOS]

For those that have commented on China and the dangerous chess game that may be being planned, considered or thought..

http://www.kitco.com/ind/Ridley/feb142005.html

That report contains some chilling reading... Really worth the time to read.

[aaaaaa]

What else did I say earlier... oh yeah, buy Gold. 

<{POST_SNAPBACK}>

huh?

that's what I saw 'em all doing last week in China town!

how much to buy ?

[Bizz]

Back to topic again and $ going south again.

[aaaaaa]

hmmmmm ! interesting topic

some people already have started "final contdown" !!!

THE COLLAPSE OF THE US DOLLAR

WHAT MONEY LOOKED LIKE WHEN IT WAS STILL BACKED BY SOMETHING

......Already, America is despised around the world not only because of the Iraq situation, but also because America is generally seen as a nation that has been greatly blessed, but, partly because of the filth that Hollywood exports around the world, is seen as an incredibly arrogant, and undeserving superpower. This has left America with few friends that would come to it's financial rescue when the chips are down. God is allowing America to be humiliated and defeated for rejecting His Law, for trusting in wealth instead of trusting in God. Our leaders have for the most part rejected the Constitution, and have allowed this once great nation to be ruined by enslaving us to a group of international bankers, in direct opposition to what the Constitution states.

We are apparently now in the final countdown towards the greatest economic meltdown in history. Yet few appear to be aware of what lies ahead. We are about to witness the end of the America that we were blessed with, and enter a worldwide age of tribulation and chaos that no one has experienced in living memory.

brrrrr! scary !

Edited February 15, 2005 by aaaaaa

[Erwin1011]

If history may be a guide : ALL major powers in history went through serious monetary troubles before their final demise.

[Blake7]

If history may be a guide : ALL major powers in history went through serious monetary troubles before their final demise.

<{POST_SNAPBACK}>

and moral/cultural decline as perceived by the rest of the world..

[chaladmak]

so, what to do - convert into Swiss franks or what?

[LaoPo]

so, what to do - convert into Swiss franks or what?

<{POST_SNAPBACK}>

If you want to do anything, don't do it in just 1 currency; divide in strong currencies like Swiss Francs/Pound Sterling/Euro.

LaoPo

[Bizz]

The Chinese economy is expected to grow at an annual rate of 8 per cent during the period of the 11th Five-Year Plan (2006-10).

State Council Development Research Centre Deputy Director Sun Xiaoyu made this remark at the opening ceremony of the China Development Forum 2005, which opened yesterday at Beijing's Diaoyutai State Guesthouse.

"That means China will achieve its goal of quadrupling its gross domestic product (GDP) from 2000 to 2020 ahead of schedule," he said.

Ok what are the implications

The United States has no intention to invade the Democratic People's Republic of Korea (DPRK), US Secretary of State Condoleezza Rice said Monday at a news conference before she concluded her China tour.

we heard that one before.

Information herehttp://tsearch.chinadaily.com.cn/was40/advancesearch.htm

[harrymand]

And what now!!! 2.5 year later? You re vote for the last dictator mr. Bush for another 4 years! You get what you deserve! I´m working for the Yankee Pesos but I live in the most expensiv country in the world. That´s why I had to move to Thailand. THANKS M.F... BUSH, YOU MAKE MY LIFE HAPPY! If it was´nt for you, I still would freeze my balls of up north!

[PeaceBlondie]

Since we've jump-started this thread, how much worse is it now than it was a few months ago? I am still getting nearly 35 baht to the dollar, roughly the same as in December. The painful decline was mostly in year 2006. My friend calls the baht a Mickey Mouse currency, and I wrote back and called it a toy currency. Okay, I love Thailand and the Thais are personally friendly, but the currency exchange problems are beyond the control of Thais and Thailand.

So, has the dollar's decline against the baht effectively stopped, roughly in November?

[LivinLOS]

The only reason your getting 35 to a dollar is the false onshore rate created by BoT restrictions.. Real rate is around 32..

Look at the chart I posted above and then go dig up a USD index chart now.. 85 down down down to 82.. Look at the USD to others.. Crossed 2 to the pound.. 1.36 to the EUR.. I dont know where dollar bulls get thier thinking from but they are the ones losing and the bears are making out like bandits..

[Brian2056]

Everyone's an expert. I about fell out of my chair at the "Stay out of US stock market and real estate." Right.

[solo siam]

For those that have commented on China and the dangerous chess game that may be being planned, considered or thought..

http://www.kitco.com/ind/Ridley/feb142005.html

That report contains some chilling reading... Really worth the time to read.

"The final war for the planet's resources has already started. You name the commodity and China's buying it and consuming it in HUGE quantities. Last year they consumed nearly half of the world's cement, twice the world's consumption of copper, and nearly a third of the world's coal, 90% of the world's steel plus nearly every other commodity you can think of has been in greater demand by China. "

"A startling fact is that world's richest 1 billion people - just one-sixth of the world's population - account for three-quarters or more of global consumption of oil, steel, cement, copper, aluminum, timber, coal, and other energy. "

These two statements seem to contradict each other quite harshly, unless half or more of the richest billion people in the world live in China - The only other way that these two statements could be conciled is if China was exporting those products mentioned in the first paragraph to places like the USA, but surely then that would make the USA etc... the consumer.

I've never got the whole oil thing, As soon as the cost makes oil permanently prohibitive as an affordable energy solution, the switch will be made to something else, Switching over to vegetable oils for machinery, electric motors and Hydro/Solar/Wind/Nuclear Powerplants etc.. makes ecological sense, and one day it will make economic sense - The technology is constantly coming down in price and as oil becomes scarcer it will rise in price, there will be a day when the two lines cross each other and the switch will be made, maybe not in a year or 5 years but certainly before oil runs out or rises to extreme prices.

[maurizio04]

Since we've jump-started this thread, how much worse is it now than it was a few months ago? I am still getting nearly 35 baht to the dollar, roughly the same as in December. The painful decline was mostly in year 2006. My friend calls the baht a Mickey Mouse currency, and I wrote back and called it a toy currency. Okay, I love Thailand and the Thais are personally friendly, but the currency exchange problems are beyond the control of Thais and Thailand.

So, has the dollar's decline against the baht effectively stopped, roughly in November?

Judging by the Euro/Bath exchange the thai market is really out of control. The Euro is going up every day against the dollar but i can have the same bath for Euro than in last december.....

[LoveDaBlues]

I think the baht/USD has leveled off for the most part. I look for the USD to SLOWLY gain ground against the baht over the next 2 years or so and eventually get back to the 40:1 ratio.

But then again, I'm invested heavily in US property so what do I know?

[VegasVic]

Everyone's an expert. I about fell out of my chair at the "Stay out of US stock market and real estate." Right.

Yea, that post by thaistick is pretty funny in hindsight, given the fact that all the major U.S. market averages (except the NASDAQ) are setting new records almost daily now, of course the main reason that U.S. corporate profits have been climbing so dramatically(and thus the market) is the weak dollar. I have a feeling that that the time for this "joy ride" weak dollar cycle will sadly have to end in the not too distant future as some of the larger European economies are starting to feel the effects of the strong Euro and it is only a matter of time before the EU central banks begin to intervene to weaken the Euro. If the Euro was allowed to contiue to strengthen then there would be the real possibility of a serious recession in many European countries. In defense of thaistick I have to say that looking at a post from two years ago there are many of us that could be made to look rather foolish.

[Neeranam]

Stop moaning - it was only 25 when I came to this country. Ungrateful b@stds.

[VegasVic]

Stop moaning - it was only 25 when I came to this country. Ungrateful b@stds.

Of course back then you could buy a 3 bedroom bungalow or a oceanside condo in pattaya for about 400,000 baht!

[ray23]

Stop moaning - it was only 25 when I came to this country. Ungrateful b@stds.

Of course back then you could buy a 3 bedroom bungalow or a oceanside condo in pattaya for about 400,000 baht!

Excellent pont. when the baht wa 25 the old timers I have met have told me that with 150 Baht you could get lunch. a few beers and a lady. what will a 150 baht do for you today. It's never the numbers it's buying power that matters. My buying power is significanlty less then four years ago.

[Neeranam]

Stop moaning - it was only 25 when I came to this country. Ungrateful b@stds.

Of course back then you could buy a 3 bedroom bungalow or a oceanside condo in pattaya for about 400,000 baht!

Excellent pont. when the baht wa 25 the old timers I have met have told me that with 150 Baht you could get lunch. a few beers and a lady. what will a 150 baht do for you today. It's never the numbers it's buying power that matters. My buying power is significanlty less then four years ago.

Maybe 50 years ago. I think it's ridiculous that someone getting a state pension of 40,000 baht and living in Isarn can complain about the dollar going down a baht or two. I know a guy with $150,000 in the bank and a pension of 95,000 baht a month who is scared to move here as he doesn't think he has enough money. A single guy too!