Why is the U.S.Dollar heading south?

[bangkapi]

Some views of the bigger picture:

www.zerohedge.com

www.x22report.com

[swissie]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

You mean the country with the largest GDP? Great quality of life for people who live there? Ample opportunity to advance yourself? Etc? Comparing the Thai economy to the US is a bit ridiculous. Plus, who knows how the Thai economy is doing. They've admitted to lying about this in the past.

Naam! Where are you? LOL

IMHO, a lot has to do with the stock market and where interest rates are going. The current Fed meeting held rates steady. When they boost them, the USD will probably get stronger. All that hot money will flow back to the US. IMHO. As long as the US economy is still strong....

Worth a read:

http://www.investopedia.com/articles/forex/09/factors-drive-american-dollar.asp

http://video.cnbc.com/gallery/?video=3000514153

The largest GDP well that is a numbers game and the people in charge are known to fiddle with them. Yes everybody presumably is living the good life with stagnant wages, welfare etc. but its all about the money honey all this good life takes money and lots of it. A 19 TRILLION dollar debt is the result forget about states that are on the verge of bankruptcy. All together your looking at 200 TRILLION in debt. Can you give me a hamburger today and I will pay you tomorrow?

200 trillion or 200 quadrillion will not make any difference. The US Dollar remains as the only "reserve currency". We have no other "compass or measuring stick."

The outstanding dept could not be equalized by crops for human nutrition, nor by mining activities, nor productivity improvements as far as measurable by monetary units. Not for generations to come.

BUT: Unless the world declares the annual, worldwide potato crop as the new "reserve currency", we may have to sick with the US$ as a "compass and measuring stick." Simply because there are no other viable alternatives available..

Cheers.

[wwest5829]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

Yea, too many like me just living off the government in retirement on Social Security.

For which we paid into for many years! LOL[/quote

Absolutely, although having been paid below the U.S. average income level and having been retired for some years, I may now be drawing off of more than I paid in. Hmmm, think I should do the calculations to be more knowledgable.

[IAMHERE]

Because the USA is putting black people on their money. Being so PC with the money is a sign that it is time to get out of the US dollar, so the exodus to the door is causing the devaluation of the US dollar. I drive an economy size car so have some idea about the economy.

Also the world's nations need fewer dollars to pay for oil so less need for the dollar affects the exchange rate.

Edited May 3, 2016 by IAMHERE

[BudRight]

QE and low interest rates will go down history as one of the worst blunders. 30% interest rates here we come.

[Watchful]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

There is certainly some truth to the US$ being overvalued. In part this was driven by the "Risk Off" trades, where people bought US Treasuries in fear that lower global commodity prices would devastate their home currencies. Recent improvements in commodity pricing has reduced the demand for US Treasuries.

Looking backwards is easy, however. Where this is going is far more difficult. When demand for Treasuries is low, interest rates should go up, but ... but they aren't! Further confusing things is that China appears to be weaker than thought. A weak China would predict a lowering of commodity pricing and stimulating once again the "Risk Off" trade. We are in unusual times and things are quite confusing!

My sense the "leading indicator" for Thailand in China. That is, if things continue to go South in China, Thailand will also suffer.

One thing you don't hear much about, but a real strong trend in the US has been the "re-sourcing" of components form China to domestic producers. China is slowly becoming more expensive and the long suuply chains have become a headache to manage.

[nauseus]

Maybe the dollar is going down due to the backlash of Barack Obama trying to influence the outcome of Brexit, and clearly failing! Also the prospect perhaps of Donald Trump actually making it to the nomination!!

Really nothing to to do with Brexit, even if it happens!

[nauseus]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

You mean the country with the largest GDP? Great quality of life for people who live there? Ample opportunity to advance yourself? Etc? Comparing the Thai economy to the US is a bit ridiculous. Plus, who knows how the Thai economy is doing. They've admitted to lying about this in the past.

Naam! Where are you? LOL

IMHO, a lot has to do with the stock market and where interest rates are going. The current Fed meeting held rates steady. When they boost them, the USD will probably get stronger. All that hot money will flow back to the US. IMHO. As long as the US economy is still strong....

Worth a read:

http://www.investopedia.com/articles/forex/09/factors-drive-american-dollar.asp

http://video.cnbc.com/gallery/?video=3000514153

The largest GDP well that is a numbers game and the people in charge are known to fiddle with them. Yes everybody presumably is living the good life with stagnant wages, welfare etc. but its all about the money honey all this good life takes money and lots of it. A 19 TRILLION dollar debt is the result forget about states that are on the verge of bankruptcy. All together your looking at 200 TRILLION in debt. Can you give me a hamburger today and I will pay you tomorrow?

200 trillion or 200 quadrillion will not make any difference. The US Dollar remains as the only "reserve currency". We have no other "compass or measuring stick."

The outstanding dept could not be equalized by crops for human nutrition, nor by mining activities, nor productivity improvements as far as measurable by monetary units. Not for generations to come.

BUT: Unless the world declares the annual, worldwide potato crop as the new "reserve currency", we may have to sick with the US$ as a "compass and measuring stick." Simply because there are no other viable alternatives available..

Cheers.

Yes there are, have been, and always will be.

[2fishin2]

The dollar is doing just fine against the baht....lets take a look at the USD-THB exchange rate over the last 5 years with my hand drawn in long term trend line. All is well when looking at it from a recent history, longer term basis versus looking at it day by day, month by month. It's all a matter of time perspective.

Capture.JPG

Please dont try and interject logic into this thread. Nobody will understand.

[2fishin2]

Because the USA is putting black people on their money. Being so PC with the money is a sign that it is time to get out of the US dollar, so the exodus to the door is causing the devaluation of the US dollar. I drive an economy size car so have some idea about the economy.

Also the world's nations need fewer dollars to pay for oil so less need for the dollar affects the exchange rate.

Are you serious with that statement. Could you be any more subtle with your racist remarks. What in the HE double L has the color of people got to do with this thread. Please take your ridiculous trolling remarks somewhere else.

[Watchful]

QE and low interest rates will go down history as one of the worst blunders. 30% interest rates here we come.

You can get high interest rates today in Brazil and Venezuela. Problem is those high rates are NOT available in US$ denominated accounts.

We must remember that while 19% annual internet seems very attractive, the underlying currency can devalue 20% or more in a single week!

Thus if you seek those very high rates, at the same time you have to hedge the currency and that can become quite expensive on those volatile currencies.

[ozyjon]

It's to do with FIAT currencies and the bonds are

worthless, many people getting out of the stock

market, money in the banks worthless, world

debt, all getting out of control, big bust on its way.

[F4UCorsair]

There's a joke, but not sure it is really a joke.....

If you lined up all the economists in the world, head to toe, they wouldn't reach a conclusion.

I've spoken with economists about stock markets, world economic outlook, etc., and the usual response is, "Don't ask me, I'm an economist."

They can give you a theoretical position/analysis but not much more.

If that's the best economists can do, why bother asking on a forum where the best you'll get is uninformed speculation?

[55Jay]

There's a joke, but not sure it is really a joke.....

If you lined up all the economists in the world, head to toe, they wouldn't reach a conclusion.

I've spoken with economists about stock markets, world economic outlook, etc., and the usual response is, "Don't ask me, I'm an economist."

They can give you a theoretical position/analysis but not much more.

If that's the best economists can do, why bother asking on a forum where the best you'll get is uninformed speculation?

And if they ever did reach a consensus, better ask for a second opinion.

[hawker9000]

Don't you know about what event is on the horizon?

try a search on YouTube for "usd 28 may"

Be sure and put on your tinfoil hat first. One of those campaigns to convince the public of this or that, but you can't easily find out what they're even talking about unless you're willing to watch long videos Notice how that was the tactic even with this post? What you get tends to be long on preamble and "background" intended to persuade rather than inform, and short on actual news. If you conduct the recommended search, the first hit you're likely to get will be a link to a page with nothing but a long list of videos, no article or write-up of any kind, and some other juicy-sounding headlines, such as: "Whistleblower Reveals That Obama Has Authorized A False Flag Nuclear Strike On CHICAGO!!!" and “Michelle Obama Promises To CONFISCATE ALL FIREARMS Before Leaving The White House". (Seriously. Here...scroll down past all the videos to the "More From Us" list)

The immediate answer to the OP question is that with Fed rate-raising expectations in 2016 receding (for the moment), so has the dollar somewhat. There's probably some uncertainty surrounding the November elections at work as well. In terms of THB vs the USD, the dollar's down, but not really dramatically so. It oscillated around 36B/$ for a few months, but looks like it's settled back to 35 plus and minus.

...Or maybe all of Obama's dollar-printing is finally starting to catch up to us.

[kamahele]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

Welfare state? The country's unemployment rate is around or under 5%. If big business shared some of their record profits with their employees and the government would raise the minimum wage, you would see even less people needing government assistance. If the minimum wage had kept up with increased productivity over the past 40 years, it would be $22 an hour instead of $7.25 and hour. Who can live on that? What you see is corporate welfare.

[hawker9000]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

Welfare state? The country's unemployment rate is around or under 5%. If big business shared some of their record profits with their employees and the government would raise the minimum wage, you would see even less people needing government assistance. If the minimum wage had kept up with increased productivity over the past 40 years, it would be $22 an hour instead of $7.25 and hour. Who can live on that? What you see is corporate welfare.

Channeling Bernie here? Give it up. He's done. Yes. Welfare state. Everybody knows the "unemployment rate" is nothing but a misinformational joke. "Big business ... their record profits..." Another joke. Some businesses do well. Some don't. You're obviously not invested in biotech right now... Minimum wage another joke: ensures that even the unskilled, incompetent and lazy can earn more than their labor is worth, at the expense of consumers, ESP. if union members.

[craigt3365]

Some of us have been warning about the inevitable decline of the US dollar for some time now...

The US unpayable debt...creating money out of thin air and flooding the market place with dollars when the US economy has been in recession for years...has damaged US Fed and Central Banking credibility...other countries are dumping dollars...other countries are tired of US BS and are beginning to trade for oil in other currencies...other countries do not want to buy US Bonds to help support the US government because of the US leadership's inability to control spending...

The best stores of wealth on the planet are land (location is very important) and Precious Metals (Gold and Silver)

Good Luck!

I've been reading about the demise of the US dollar for many, many, many years. The US economy may not be rocking, but it's far from falling apart. Won't happen in our lifetimes.

Your view is not held by the Saudi, Russians, and Chinese...who hold much of the US sovereign debt...these countries are slowly trying to uncouple from the US dollar without completely destroying the US government and economy...their investment in dollars is at stake here...they could get pissed and dump them on the market at anytime...causing the demise of the dollar...

Not likely to happen tomorrow...but the purchasing and political power of the dollar is in decline and will continue to be so...

I am 71 now...the collapse in the confidence of the US dollar...at home and abroad... will happen in my lifetime...

I've heard people talking about the collapse of the US dollar for the past 30 years. Hasn't happened and definitely won't happen in your lifetime. Sorry, not trying to be rude. There is just no alternative right now. If there was, I'd change my stance.

As for foreign countries with US debt, if they dumped their debt, their economies would tank. Not the US. There's a huge demand for US sovereign debt. It'd get absorbed quickly.

But yes, at some point in the future, the USD won't be the dominant currency. History has shown us that.

[Berkshire]

Some of us have been warning about the inevitable decline of the US dollar for some time now...

The US unpayable debt...creating money out of thin air and flooding the market place with dollars when the US economy has been in recession for years...has damaged US Fed and Central Banking credibility...other countries are dumping dollars...other countries are tired of US BS and are beginning to trade for oil in other currencies...other countries do not want to buy US Bonds to help support the US government because of the US leadership's inability to control spending...

The best stores of wealth on the planet are land (location is very important) and Precious Metals (Gold and Silver)

Good Luck!

I've been reading about the demise of the US dollar for many, many, many years. The US economy may not be rocking, but it's far from falling apart. Won't happen in our lifetimes.

Your view is not held by the Saudi, Russians, and Chinese...who hold much of the US sovereign debt...these countries are slowly trying to uncouple from the US dollar without completely destroying the US government and economy...their investment in dollars is at stake here...they could get pissed and dump them on the market at anytime...causing the demise of the dollar...

Not likely to happen tomorrow...but the purchasing and political power of the dollar is in decline and will continue to be so...

I am 71 now...the collapse in the confidence of the US dollar...at home and abroad... will happen in my lifetime...

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

[theguyfromanotherforum]

Because it was way overvalued and commodities are going up?

Thailand economy is not that bad. Everyone works here unlike the welfare state of USA.

"Thailand economy is not that bad. Everyone works here unlike the welfare state of USA".

Heresy, go wash your mouth out with soap and water, you wont fit in here with lines like that - the official line here is that the Baht is going to crash and the country will be broke by Xmas, gotit?

Yes and the farang state pensioners will be getting THB 200 to the USD and 400 to the GBP and they can afford a short time with a slapper every week instead of once every 8 weeks and they can drink Heineken instead of Leo

I lol'd

[Naam]

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

less revenue for the states because the price of commodities are down does not necessarily mean their economies are down. it just means less to spent and go for either deficit spending or reduce spending.

and the ruling politicians of the usual suspect "shining beacon" countries (plural and not limited to the U.S. of A.) would celebrate 24/7 if their economies had only half the GDP increase of China.

"Feds would have raised rates recently if not for the recession in the EU" =

[Berkshire]

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

less revenue for the states because the price of commodities are down does not necessarily mean their economies are down. it just means less to spent and go for either deficit spending or reduce spending.

and the ruling politicians of the usual suspect "shining beacon" countries (plural and not limited to the U.S. of A.) would celebrate 24/7 if their economies had only half the GDP increase of China.

"Feds would have raised rates recently if not for the recession in the EU" =

Cmon Naam, are you suggesting that the economies of Saudi Arabia and Russia are not in the toilet? As for China, do you know about the corruption, pollution, inflation, inequality, social unrest, etc.?

As for the recession in the EU comment, that wasn't the Fed talking but some financial dude on CNBC. Wasn't even my opinion.

[Khon Kaen Dave]

The Thai economy is strong.Thats great if you've already got loads of money.What was it one UK smartass banker or lawyer said back in the 80's?

Recession?what recession?

For the rich,the economy is always strong,and they love a recession because things and people can be bought cheaper.

The Thai economy is strong, but i dont think many Thais would agree,it doesnt get much better for them,even the ones who know what economy means.

[hugh2121]

Donald Trump.

Love him or hate him, the fact is that he has tremendous support and the financial markets are nervous of him.

Markets fear the unknown/uncertain.

[little mary sunshine]

34-35 Now, couple of years ago it was 28-29... That's life,

Up down.....

[Nasrullah]

It's to do with FIAT currencies and the bonds are

worthless, many people getting out of the stock

market, money in the banks worthless, world

debt, all getting out of control, big bust on its way.

Agree with everything,except the getting out of the stock market bit...

When any central bank goes on a QE bender(putting money in the bank's bank)the wall st gang has a play/gamble on the stock market.

Most people(middle class down) have no stocks at all.

Also, whenever any central bank starts QE......watch the currency devalue immediately......It's a game for the rich club,,,,

And we will never be part of that club.....

[HenryB]

Maybe the dollar is going down due to the backlash of Barack Obama trying to influence the outcome of Brexit, and clearly failing! Also the prospect perhaps of Donald Trump actually making it to the nomination!!

Amazing do you remember when the Japanese was going to over take America than Russia. Well maybe they both are going to overtake the USA next week

[HenryB]

Well we who live in Thailand can invest all our money in Thai Real Estate

To be rich in the years to come

[Nasrullah]

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

less revenue for the states because the price of commodities are down does not necessarily mean their economies are down. it just means less to spent and go for either deficit spending or reduce spending.

and the ruling politicians of the usual suspect "shining beacon" countries (plural and not limited to the U.S. of A.) would celebrate 24/7 if their economies had only half the GDP increase of China.

"Feds would have raised rates recently if not for the recession in the EU" =

Cmon Naam, are you suggesting that the economies of Saudi Arabia and Russia are not in the toilet? As for China, do you know about the corruption, pollution, inflation, inequality, social unrest, etc.?

As for the recession in the EU comment, that wasn't the Fed talking but some financial dude on CNBC. Wasn't even my opinion.

i've read this whole thread and most poster's had good observations in their text.

But not only do i agree with naam's post but take issue with yours berkshire!

Yes....saudia arabia and russia are in the 'toilet a the moment',due to low demand for oil....ie demand for everything worldwide is way down.

NO suprise really,as most countries are in either a depression/recession.....

Believe me,the US has a lot more problems than china.The latter is in a transitional phase trying to create more of a domestic consumer

economy rather than just being an export economy.Only time will tell if they can pull this off......i think they can because china is in the

business of 'business' where the US is in the business of war....A bunch of self-serving imbociles run AmeriKa.

China is a dictatorship no doubt.But a benign one when it comes to business.I'm sure they are well aware of the civil wars of previous

dynasties and don't want inequality to spark such conflicts.

The USA is a beacon of prosperity you say...c'mon....The federal reserve is bankrupt and everyone knows it...They have lent out that

much money to commercial banks that will never/can't be paid back.And the US can't raise interest rates as this will lead to a demise

of the commercial banks..A 1% rise in rates did you know,adds up to a 20% increase in monthly mortgage repayments.That last increase

.25-.5% was a token increase...had to do it to give some credence to their signals.

So that nonsense about recession in EU is just that......The US data is not good at all.If it was,then rates would not of been on 'hold'

since 2006......

As for the exports....no one these days wants a strong dollar.They're all trying to win the export war-while depreciating their currencies

as a consequence!

The CNBC dude.........he's in the 'white shoe boy club' ie he loves QE,low rates....bond buy back

America is in decline as the rest of the world is playing a different game now compared to the 'petro' dollar days..

[Naam]

These are standard Trump campaign rhetoric that have no basis in reality. The economies in Saudi Arabia and Russia are in the toilet due to low oil prices. China has so many problems I don't even know where to start. The USA is the single shining beacon of prosperity in the world right now, no one else can make that claim. I just watched on the news the other night that the Feds would have raised rates recently if not for the recession in the EU. Fact is, the US doesn't want a strong dollar because it would hurt their export sector. But that's not the sole driving force behind US monetary policy.

less revenue for the states because the price of commodities are down does not necessarily mean their economies are down. it just means less to spent and go for either deficit spending or reduce spending.

and the ruling politicians of the usual suspect "shining beacon" countries (plural and not limited to the U.S. of A.) would celebrate 24/7 if their economies had only half the GDP increase of China.

"Feds would have raised rates recently if not for the recession in the EU" =

Cmon Naam, are you suggesting that the economies of Saudi Arabia and Russia are not in the toilet? As for China, do you know about the corruption, pollution, inflation, inequality, social unrest, etc.?

As for the recession in the EU comment, that wasn't the Fed talking but some financial dude on CNBC. Wasn't even my opinion.

i said "does not necessarily mean...".

but yes, Russia is in a recession, no doubt about that.

Saudi Arabia's economy is not down. because, as per definition, an economy never existed. hopefully the new young chap in charge has success. but it will take a couple of decades to develop an economy and a strong hand to teach the young Bedouine generations what work means and that the hand-outs are limited.

as far as China is concerned your litany of negative points does not negate the fact that the economy is still growing at a pace many "shining beacons" can only dream of.

all afore-said of course in my [not so] humble opinion