Russia: US Dollar too unstable to trust

Anyone seen this?

en.rian.ru...

It's quite scary.

That’s rich.

Ok let’s say oil was denominated in euros and you got this big pile of eruos. What are you going to do with it? Europe is a continent with barely 1% growth, 10% unemployment, a larger debt burden that than America, if full of people who world rather riot than work and is in the midst of demographic death spiral.

When you have a pile of dollars it allows you access to the largest, most efficient, most dynamic, most productive economy on earth.

Additionally, let’s say Iran decides to shut down the Straights of Hormuz. Who’s going to go over there and make them cut it out? France? Germany? Please; that would be the US Navy. You see American is a country that has the means to protect and defend it currency and economic interest and the rest of world gloms on to that capability.

Russia can talk about economic problems... NOT! They are still a laughing stock years after the curtain fell. All this talk about Russia's military might doesn't matter if it cannot feed its own people.

The US dollar can regain its strength if the economy continues to grow and or spending can be reigned in by governments.

That's the way it is now. I think part of the bigger picture is this: it works in two ways. It's a catch-22

1. The dollar continually becomes worth less and less because more and more of them are printed. It's like a baseball card. If you one Babe Ruth card it's worth a million dollars, but if you have a million Babe Ruth cards, they're only worth a dollar. Supply and demand. (We all know, of course, that paper money in general isn't really WORTH anything as it isn't backed by gold, but that's a different subject)

2. Countries around the world are dumping the dollar because it buys less and less. The more countries that dump it, the more it's value declines, the more it declines, the more countries that dump it. I agree with what you're saying that that's the way it is TODAY. But what about 5 years from now?

Russia saying the dollar is unstable is not a good sign for America.
Here's another example.

registration.ft.com...://www.trunews.com/newslinks.htm&location=http%3A//news.ft.com/cms/s/a73b2234-d128-1 1da-a38b-0000779e2340.html

or this
registration.ft.com...://www.trunews.com/newslinks.htm&location=http%3A//news.ft.com/cms/s/926a7118-cf05-11da-9 25d-0000779e2340.html" target="_blank" class="postlink" rel="nofollow"> registration.ft.com...://www.trunews.com/newslinks.htm&location=http%3A//news.ft.com/cms/s/926a7118-cf05-11da-9 25d-0000779e2340.html

Consider...in the 1940's a loaf of bread was say 10 cents. Today, it's $1.79 for that same loaf. Is that because the bread grew more expensive? No, it's because the value of the dollar went down that much to require more of them (dollars) to buy the same loaf of bread. Think about it.

The value of the dollar has little to do with number of treasury notes in circulation. Fiat money a complex notion and I won’t attempt to explain it here. In short, the market determines the value of a “free floating” currency and there are a LARGE number of factors that traders use to arrive at value, not the least of which is interest rates.

Methinks it's essentially non-news.

1) Everybody knows that Euro appreciated against the dollar considerably in the past 5 years. Did the Russian minister broke the news? Hardly. I don't see this as some kind of an eye opener anyway.

2) Is this very bad for the US economy? Hardly. We'll buy less French wine, maybe, but our exports will be cheaper

Originally posted by Aelita
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2) Is this very bad for the US economy? Hardly. We'll buy less French wine, maybe,

but our exports will be cheaper

That’s another good point. People wrongly think High Dollar = Good, Low Dollar = Bad.

An expensive or cheap currency each has its own costs and opportunities. What a country strives for is a stable currency. Unfortunately world events can upset those plans.