The Us Dollar

[Gary A]

The US government doesn't suffer from a weak dollar. It benefits because domestic made products get cheaper and imports become more expensive. The massive debt becomes less because money owed was borrowed when the dollar was stronger. Don't look for the US government to make any moves to strengthen the dollar.

The anti American crowd doesn't like it but the fact is that the US and Canada are as near self sufficient as any country in the world. The rest of the world better hope that North America doesn't decide to go into isolationist mode. Oil you say? Estimates are that there is more oil available in North America than has been used since the beginning. Extracting that oil would create an entire new industry and create many jobs. There is a huge surplus of clean natural gas and why it is not being utilized is a very good question. Natural gas is cheap and plentiful. The cost right now is about $3.50 per thousand cubic feet. It was over $10 during the fake oil shortage.

Expats suffer from a weak dollar but why would the government care? The US banks certainly don't like us.

[johnnyk]

The US government doesn't suffer from a weak dollar. It benefits because domestic made products get cheaper and imports become more expensive. The massive debt becomes less because money owed was borrowed when the dollar was stronger. Don't look for the US government to make any moves to strengthen the dollar.

The anti American crowd doesn't like it but the fact is that the US and Canada are as near self sufficient as any country in the world. The rest of the world better hope that North America doesn't decide to go into isolationist mode. Oil you say? Estimates are that there is more oil available in North America than has been used since the beginning. Extracting that oil would create an entire new industry and create many jobs. There is a huge surplus of clean natural gas and why it is not being utilized is a very good question. Natural gas is cheap and plentiful. The cost right now is about $3.50 per thousand cubic feet. It was over $10 during the fake oil shortage.

Expats suffer from a weak dollar but why would the government care? The US banks certainly don't like us.

Gary, the new industry has been created since the 80s to extract oil from tar sands in Alberta. But the environmental damage makes West Virginia and eastern Kentucky look pristine. We Canucks are already shipping shitloads of gas south to the US, that's why its cheap.

[ray23]

Believe me I have had a huge education in economic following these threads. Enough so as Gary puts it to see the narrow views of some people.

Play ground rules that should really help to me to learn thanks so much that was definetly a new one for me.

I'm not going to get into politics that's not what the thread is about.

Now me I will put more trust in these guys then playground stories. Remember this is not over.

http://www.bloomberg.com/apps/news?pid=new...id=aCIUadJN6F1U

Edited August 17, 2009 by ray23

[ray23]

You know I'm like Will Rogers I only know what I read in the newspapers

A little more for your reading entertainment:

http://www.bloomberg.com/apps/news?pid=206...id=aBV0j083JsAM

http://www.bloomberg.com/apps/fbk?site=sales

There are certian members that I pay close attention to on the furom to learn, Naam is one and there are others who can address the issue based on more then emotions. I don't think anyone really knows how this going to end. But, I'm not counting the dollar out just yet.

Edited August 17, 2009 by ray23

[RKASA]

You know I'm like Will Rogers I only know what I read in the newspapers

A little more for your reading entertainment:

http://www.bloomberg.com/apps/news?pid=206...id=aBV0j083JsAM

http://www.bloomberg.com/apps/fbk?site=sales

There are certian members that I pay close attention to on the furom to learn, Naam is one and there are others who can address the issue based on more then emotions. I don't think anyone really knows how this going to end. But, I'm not counting the dollar out just yet.

"You know I'm like Will Rogers I only know what I read in the newspapers"

"The man who reads nothing at all is better educated than the man who reads nothing but newspapers.  Thomas Jefferson  

[Abrak]

I dont really have a view on the dollar but I do think there is something happening that must affect its dynamics.

China's trade surplus is shrinking very fast....

In fact if current trends to continue it will all but disappear by mid 2010. The fall in exports down for 9 consecutive months is particularly worrying. Obviously a falling surplus means less USTs to buy but at least the US deficit is shrinking.

Is it good for the dollar? bad? Or simply a natural result of economic events?

[ray23]

Housing starts up in the States:

Productive activity up in the States

http://news.bbc.co.uk/2/hi/business/8195595.stm\

Industrial output up in the U.S.

http://news.bbc.co.uk/2/hi/business/8201935.stm

Waiting on a report on China buying Us Treasuries from Bloomberg.

It is amazing what you can find if you bother to look.

Does any of this mean the dollar will rise and stay up darned if I know. But, it went today. Beyond that I would not express an opinnion. I will leave that to the guys on the forum that know what they are doing. I'm not one of them.

Edited August 17, 2009 by ray23

[ray23]

Dollar on the rise, but stocks are taking a hit.

It's hard to believe how the dollar and yen rise when things look bad but that is how it is.

Truth is that I had wanted to support my views in the negative I could have found just a many article doing that as well. So in he end I'm not sure anyone has the exact answer. These days I don't wish harm to any economy cuase in the end we are all going to pay for it.

This article is from as Asia Times describes what I feel is fairly accurate unbaised oppinion of the China and the States realtionship, one that is based on a mutual need. I will say this a much different tone to this article then the ones posted back in March. Nothing is locked in stone these days and won't be for some time. So where does all this leave dollar probably it will remain on the roller coaster ride for some time to come.

http://www.atimes.com/atimes/China_Business/JJ08Cb01.html

Edited August 17, 2009 by ray23

[flying]

You know I'm like Will Rogers I only know what I read in the newspapers

there are others who can address the issue based on more then emotions.

I'm not counting the dollar out just yet.

Since you are typing on an internet forum you have much better resources at your fingertips than a newspaper.

How many of the 77 failed banks did you read about in the paper? Yet by law the FDIC has to post the information along with assets/liabilities.

http://www.fdic.gov/bank/individual/failed/banklist.html

Mind you those 77 banks were head offices & a tip of the actual numbers when branches are taken into consideration. So also consider how many Americans were displaced from employment. Also information regarding the 350 Billion dollars that were requested by Hank Paulson to buy back toxic assets

(Toxic assets that those who created packaged & sold made billions off of )

only to have the 350 billion bail dollars be baited & switched to direct deposit into the too big too fail banks is probably not found in those newspapers.

Please do not confuse me with an American dollar/ basher nor an emotional poster as I am an American living & working in America. That does not mean I have to agree with an elected government that has helped create this mess nor their one sided methods of repair.

Your faith in the dollar is yours to have but to say some are reporting based on emotion after making that statement is at odds with itself. IMHO

PS: Did the newspapers report on the billions given to bail AIG that went to Goldman Sachs 100 cents on the dollar?

Did they report where Hank Paulson worked before becoming Treasury Secretary?

Did they report that Mr Paulson was allowed to sell 200 million dollars worth of shares in Goldman TAX FREE as part of his employment package?

We as Americans never knew we were so generous with our tax dollars

Edited August 17, 2009 by flying

[ray23]

As of the 17th of this month China is increasing it's holdings in U.S. treasuries.

http://www.bloomberg.com/apps/news?pid=new...id=aqg8.X_gAcTo

You know all of this was found in one day, all found for the most part published yesterday. So what does it all mean got me. All I get out of it is the world is a very unsure place at the moment. A few weeks if that long ago everyone was on the band wagon about dumping the U.S.Dollar. The 17th they are buying treasury notes.

So what has changed not much really just a wild guess as to how things are going to go in uncharted waters.

[flying]

....consolidated previous post

Edited August 17, 2009 by flying

[ray23]

(The last article was from a different source)

If you have better source why not share I'm here to learn.

Yes I fully agree, I don't like what I see either. What bothers me most is the fact the they want to do more of the same.

The plan about letting bankrupt itself and then rebuild probably was not to far from the best answer. Problem the world would suffer not just the States, we are firmly connected in the world today. When Thailand did it, it had places to go for help in rebuilding. The States dont have that luxury.

There was a point when this was probably needed, but it has to stop and we need to start a plan on paying the deficit. That should be going on now. I see no indication of that.

Who were the big winners AIG for sure, some of the larger Banks, the Stock Markets. I have not seen anything filter down to the guy who pays those taxes. I know this all takes time. But what slap in the face when the bonus program are being started agian.

Now they are buying treasuries again, the guy talking about the play ground is completly correct I don't understand this at all and I don't think I'm alone.

Like I said I don't like it nor do I understand it. But, what is happening is happening. None of us have any control over the run away freight train. The only control I have is what I do, believe me I'm being very conservative these days. I'm lucky I have been here seven years built a comfortable life have all that I need and most of what I want. So if it really goes bad I can get by for three years using my Baht here. I would really prefer that to be a five year window. I'm working towards that.

I wasn't in that position when I started here and there are lot of people in this country dependent on the dollar that haven't had the time to build yet. Beleive me I don't look at it with rose colored glasse. But, I don't look at as the end of the world either. Every News article I posted may have very different tone next week. The problem is you can see what you want to see and find supportive evidence to back that up in either direction. All that tells me is know one really knows.

Will China bubble burst many seem to think so. If it does that is going to have a huge effect on the world, just like the U.S. did. I hope it doesn't I wish no harm to any economy, nor will I relish the fact in anyway shape or form. Fact is we need to pull together these days, not always such an easy task. Self interest are hard put aside, even in the worst of times.

If the States doesn't express a clear policy on debt repayment soon I believe the dollar will be in huge trouble. You don't hear much about controls being set up to avoid this mess again, you do hear a lot about a medical plan with a huge investment required. Again more money from the printing presses.

With about all that money the banks paid back there was actually a profit in that. Where did it go?

Edited August 17, 2009 by ray23

[flying]

If you have better source why not share I'm here to learn.

The plan about letting bankrupt itself and then rebuild probably was not to far from the best answer. Problem the world would suffer not just the States, we are firmly connected in the world today.

None of us have any control over the run away freight train. I'm lucky I have been here seven years built a comfortable life have all that I need and most of what I want.

This forum will not be the education same as the newspaper. You need to ask yourself a question then try to find the answer & sort the wheat from the chaff that exists on the web.

The plan was never to let the States bankrupt itself instead that is the solution they now seem hel_l bent on finding.

What would be different today? Some of the too big too fail collapsed & we have the pain associated with that. What will happen now is only bigger, more painful, slower to recover. As for others in the world that got sick from the koolaide they drank? Live & learn or come & take it out of our hides.

We did have control of the freight train & we voted NO bailout. Mr Obama & Mr McCain along with Paulson et al scared our reps into changing their votes OUR VOTES! To Yes on the bailout. Basically we are now in a taxation without representation state. I mean to follow through on my end of the promise.

Yes you are lucky & so am I. I want for nothing but...I have children & soon grandchildren I am not comfortable watching their future being raped by those that not only created the mess & got rich off of it but now it seems they would like to get rich off of the repair also.

Edited August 17, 2009 by flying

[ray23]

No argument from me on that one.

I really don't know where this mess is going I just know it's not over. . I'm fortunate enough to be able to help one of daughters in the states now. Not everyone can do that. It won't be pleasant but the American people will adjust, thay always have no other choice.

I wish politics were not connected to the dollar but that is not the real world. I honestly believe American Government hasn't wanted a strong dollar for years now. It was refreshing to see the Brits just say it and get it over with.

[ray23]

Ok Flying Bloomberg finally got their article done on this. I would really like your thoughts as to economic stand point on this. Naam if your out the this is great time to jump in, please.

http://www.bloomberg.com/apps/news?pid=206...id=afQhwp9e_txg

[middlepath]

Being Canadian along with lots of people we were USA haters. What ever they did we hated them. Now that I am older I look back and conclude

it was mostly jealousy. One thing I can say for sure, if you are 45 years old and older and hate the USA you will go to your grave

hating the USA. That country will made it just fine all though the rest of your life so hate away until you pass away. You will never be satisfied. In fact it is made up of all your your ancestors. I got tired of hating them the sh__s always bounce back and stronger.

and the national debt crap you hear...it's like a man that has 1 million and owes 200k, not good but manageable. I hear they the government

is bankrupted. Have you ever been to America (USA) and seen their National parks? One small National Park is worth 5 times their national debt, they

could sell one to the Chinese or us for their national debt before they would go under. Not asking you to join them but you haters like me were wasting

lots of time.

The USA has been good to us and I am sure helped your countries out too. The US Dollars will be just fine along with the Pound, and God bless the Euro too. All good my friends, all good.

[badge]

As of the 17th of this month China is increasing it's holdings in U.S. treasuries.

http://www.bloomberg.com/apps/news?pid=new...id=aqg8.X_gAcTo

You know all of this was found in one day, all found for the most part published yesterday. So what does it all mean got me. All I get out of it is the world is a very unsure place at the moment. A few weeks if that long ago everyone was on the band wagon about dumping the U.S.Dollar. The 17th they are buying treasury notes.

So what has changed not much really just a wild guess as to how things are going to go in uncharted waters.

Firtsly, China will not be able to 'dump' their dollars as theyre 'in too deep'.

Secondly, markets are leading indicators, if the worlds largest holder of $s and TPaper was dumping, the price would reflect this. In the last couple of months both dollars and credit have hardly been 'dumped'.

Markets are very ambiguous things, and if everyone believes $s go down it can only go one way, up

"Anything obvious is obviously wrong"

[Lopburi99]

The US government doesn't suffer from a weak dollar. It benefits because domestic made products get cheaper and imports become more expensive. ... Don't look for the US government to make any moves to strengthen the dollar.

It is exactly this point that has been worrying me for a long time. I'm surely no economist, but this seems like simple common sense to me. With the US struggling to emerge from it's recession and severe economic downturn, why would it possibly want a significantly strengthened dollar? What purpose would that serve in this context? I hope somebody smart can enlighten me so I can become optimistic, or at least less pessimistic.

[Naam]

The US government doesn't suffer from a weak dollar. It benefits because domestic made products get cheaper and imports become more expensive. ... Don't look for the US government to make any moves to strengthen the dollar.

It is exactly this point that has been worrying me for a long time. I'm surely no economist, but this seems like simple common sense to me. With the US struggling to emerge from it's recession and severe economic downturn, why would it possibly want a significantly strengthened dollar? What purpose would that serve in this context? I hope somebody smart can enlighten me so I can become optimistic, or at least less pessimistic.

who's claiming that?

[ray23]

Hey Naam glad to have you aboard, did you get a chance to check the Bloomberg article?

Dollar was up yeterday down today, no surprise I think really to early to call this. We simply are not done yet.

[flying]

Ok Flying Bloomberg finally got their article done on this. I would really like your thoughts as to economic stand point on this. Naam if your out the this is great time to jump in, please.

http://www.bloomberg.com/apps/news?pid=206...id=afQhwp9e_txg

While foreign investors such as China -- whose $776.4 billion of holdings makes it the biggest overseas holder of Treasuries -- plan to diversify reserves with International Monetary Fund debt, their holdings of U.S. securities are rising, according to government data.

Nuff said

[Carmine6]

As of the 17th of this month China is increasing it's holdings in U.S. treasuries.

http://www.bloomberg.com/apps/news?pid=new...id=aqg8.X_gAcTo

You know all of this was found in one day, all found for the most part published yesterday. So what does it all mean got me. All I get out of it is the world is a very unsure place at the moment. A few weeks if that long ago everyone was on the band wagon about dumping the U.S.Dollar. The 17th they are buying treasury notes.

So what has changed not much really just a wild guess as to how things are going to go in uncharted waters.

Not sure if the article changed, but it says this:

"China, the biggest foreign holder of U.S. Treasuries, decreased its total holdings of U.S. government securities by $25.1 billion to $776.4 billion. China’s holdings of notes and bonds climbed $26.6 billion in June to $617.7 billion, a 4.5 percent increase, while bill holdings fell 25 percent to $158.7 billion, the Treasury’s data showed. "

But it was an increase from April, so it was a decrease after a big increase in May. Hong Kong increased and I'm not sure why they don't add those two together.

http://www.treas.gov/tic/mfh.txt

China's moves don't really rate much in reality. The US deficit this year is $1.8 trillion and next year is expected about $1.2 trillion. Throw that much net debt on the market and China going incrementally up or down several hundred billion over months is only a story after the fact. Their activity isn't going to be noticed in the market, only when people check their holdings will they know what happened and then read meaning into the move.

My bet is China plays ball a little and increases holdings a bit. But I don't think they'll double up or something like that. You'll note that Hilary Clinton has changed tone 180 degrees from the campaign when China was stealing our future and sending poisoined toys to the US, and manipulating their currency. Now that $4 trillion in debt is going on the market over 3 years, she's playing nice.

[ray23]

Intersting differnce in the economies China can tell their banks to loan and they will or not and they won't. Lot more control.

[ray23]

Thanks Carmine for getting it down to something understandable, they must not have gotten the support they were looking for and started buying treasuries again. It would appear at the moment they may have more pressing problems.

[Lopburi99]

The US government doesn't suffer from a weak dollar. It benefits because domestic made products get cheaper and imports become more expensive. ... Don't look for the US government to make any moves to strengthen the dollar.

It is exactly this point that has been worrying me for a long time. I'm surely no economist, but this seems like simple common sense to me. With the US struggling to emerge from it's recession and severe economic downturn, why would it possibly want a significantly strengthened dollar? What purpose would that serve in this context? I hope somebody smart can enlighten me so I can become optimistic, or at least less pessimistic.

who's claiming that?

"Geithner also renewed a pledge to back a strong dollar" (http://www.reuters.com/article/europeanCurrencyNews/idUSN1534007720090715)

That is what I am questioning. How can he claim he wants a stronger dollar (per Gary's reasons above)? Or maybe he is protecting himself by hiding behind his omitted explanation of what "to back a strong dollar" really means in actuality and practice. Typical Washington smoke, mirrors, deception and crap. Brings to mind the now-infamous statement by Bill Clinton "It depends what the meaning of the word IS is".

Edited August 18, 2009 by Lopburi99

[Abrak]

This concept of a pledge to to a 'strong dollar' seems to be some prerequisite for the job of Fed Chairman or Treasury Secretary.

Bernanke for instance has written copious amount of work about how the US would benefit from a weak dollar and that it should be Government policy to achieve it.

So I guess it is all just a game.

[ray23]

Sounds like the plan we had for he past eight years, didn't work well.

[Abrak]

Sounds like the plan we had for he past eight years, didn't work well.

Well it did in its own way. Officials claim a strong dollar policy while pursuing one that leads to its decline. China and Japan believe in the rhetoric and buy USTs (based on the strong dollar policy) so that the US can finance growth at their expense.

And telling Japan and China that you deliberately intend to devalue your currency would make them appear somewhat foolish.

[flying]

Well it did in its own way. Officials claim a strong dollar policy while pursuing one that leads to its decline. China and Japan believe in the rhetoric and buy USTs (based on the strong dollar policy) so that the US can finance growth at their expense.

And telling Japan and China that you deliberately intend to devalue your currency would make them appear somewhat foolish.

Exactly & it is not like they have a choice ,,,, They have to claim a strong dollar/product if they expect China to buy it. But how long do they expect them not to react to what they see & hear.

Geithners need to again raise the debt limit.......Chinese love to gamble but even they know when to halt the chips. They not only know how far in we are...they hold the IOU's.

This is where policy I think could make a big difference. If Mr O turned around & started doing things that did make a change. Things that did stop the nleeding. Maybe debtors would see a reason to stay. But if this govt. continue the madness I would be very surprised if our creditors chose to be even more stupid than their customer.

Edited August 18, 2009 by flying

[Abrak]

Well it did in its own way. Officials claim a strong dollar policy while pursuing one that leads to its decline. China and Japan believe in the rhetoric and buy USTs (based on the strong dollar policy) so that the US can finance growth at their expense.

And telling Japan and China that you deliberately intend to devalue your currency would make them appear somewhat foolish.

Exactly & it is not like they have a choice ,,,, They have to claim a strong dollar/product if they expect China to buy it. But how long do they expect them not to react to what they see & hear.

Geithners need to again raise the debt limit.......Chinese love to gamble but even they know when to halt the chips. They not only know how far in we are...they hold the IOU's.

This is where policy I think could make a big difference. If Mr O turned around & started doing things that did make a change. Things that did stop the nleeding. Maybe debtors would see a reason to stay. But if this govt. continue the madness I would be very surprised if our creditors chose to be even more stupid than their customer.

I agree with you 100%.

The real question is whether the US is going to show monetary and fiscal responsibility.

My personal belief is that the 'irresponsibility' of the past was a very deliberate policy choice to achieve certain benefits and that as they display financial responsibility it will work in their favour. I am assuming a level of intelligence that is hard to justify.

I do find it difficult to assume that policy makers are more stupid than me though.