US Dollar Continues To Fall : What Does It Mean?

Isnt Japan the biggest purchaser of US Treasuries? I believe they are number one, and the biggest 'creditor' nation.

Something that keeps nagging at me is the statement I always hear ...

A lower dollar will help American goods become cheaper abroad, and will raise exports.

But what is exported that hasnt already been outsourced.

What industries have we let slip away.

What software and IT services are now in India.

What goods, textiles, or machinery is made that isnt already made elsewhere cheaper in china.

Speaking of China, they are about to flood the world with their auto manufacturer plants. More outside competition from one of the last mainstay industries, that are already having trouble making a profit in the US.

If the US is strengthened, the world will be. The United States actually owns the world ever since WWII when we loaned the rest of the world enough $ to rebuild themselves.

All major US based companies are outsourcing to China, India, and the others and when the price of labor goes up over there to the point where it's to expensive to hire them, the US based companies will lay them all off and hire here at home.

Originally posted by GrndLkNatv
If the US is strengthened, the world will be. The United States actually owns the world ever since WWII when we loaned the rest of the world enough $ to rebuild themselves.

Owns the world?

Such uninformed tripe that has become a signature of the louder new members over the past few weeks.

Debts were paid back a long time ago, you own nothing except the country you live in.

Originally posted by GrndLkNatv
All major US based companies are outsourcing to China, India, and the others and when the price of labor goes up over there to the point where it's to expensive to hire them, the US based companies will lay them all off and hire here at home.

But it wont, China & India together have a workforce of around 1.3 Billion people.

Now, as long as their population keeps increasing there will be high demand for jobs, lowering wages.

Then why does the rest of the world jump when we tell them to?

This is a good site I've just added to my favourites.

newsvote.bbc.co.uk...

I'm afraid it only does Dollar/Pound and Dollar/Euro graphs but they can be changed to either 1 year,3 months,1 month,or one day graphs.

Looks like the Dollar has gained some back today.

If anyone knows of a better site with up to date currency graphs can they let me know.

Thanks.

I believe the USD has only 7-8% correction to go. There are economic mismanagement factors and uncertainties in there.

I don't understand oil currencies well enough to see why they are as hugely impactful as they are purported to be. It sounds very old school, why don't we just kill the oil and petrol industries and move on? It's inevitable, why leave the fate of the world in the hands of the current fools? Oh and dispense with the current obsolete form of industrial military machine while we are at it.

I like some repeat posters on this thread, they are cute character and caricature actors.

Here's some interesting historical context....

fx.sauder.ubc.ca...

Excellent graphing and full coverage of all markets....
as well as buy/sell indicators and signals....FREE !!

www2.barchart.com...

(warning,...do not link to graph images here, they rotate image numbers daily, and when you post a graph of gold today, tomorrow it will be pork bellies showing.)

It means that Euro are gonna be higher than the U.S. dollar

Some correcting is happening, but if you subscribe to the head-n-shoulders indicator formula, then the right shoulder is forming with diminishing volume, whether inverted or not.

If the corrections cross the neckline, history shows that a trend indicator is established for the next move....

Look closely for the head and sholders in the futures market for currencies and metals.

Gold ... correcting downward but stabilizing and ready to rise on the right shoulder,(inverted)
USD...correcting upward and showing signs of building the right shoulder,
Euro, correcting downward to building the right shoulder.(inverted)

ALL with diminishing volume.


Not a garenteed indicator, but a historically proven signal.




Edit..been a long day,..mispelling everything.

[Edited on 18-2-2004 by smirkley]

Is the real value of the dollar an overall perception or an illusion? Isn't the 'real' value of the dollar tied to the full faith and credit of the US Government?
Perhaps this administration is aware of the futures impending financial 'doom' or demise and are thus, spending while they are able to?

Found thisinteresting article:
'The "Real" Value of a Dollar'
www.tocquevillefunds.com...

Excerpt:

"What is the value of a dollar? For us, the simplest and most reliable measure is the amount of dollars required to buy a fixed quantity of gold. We respectfully disagree with Mr. Bernanke. Whether he and his fellow governors are hypocritical or delusionary in their assessment of the dollar�s intrinsic worth is of no matter. What is important is that they are flat out wrong. As anyone can see, the dollar is falling against gold and has been doing so for almost five years, long before terrorism became a front-page item. As we are very busy figuring out how to profit from the view that it has much further to fall, we have given little thought on how to fix the mess. Let us leave financial diagnosis and prescriptions to those wise policy makers who got us here. Still, we cannot resist offering some friendly advice. The next time around, respect history. Anchor a new global currency to something that has real monetary value."




regards
seekerof

[Edited on 18-2-2004 by Seekerof]

What it really means is that Europe is in trouble.

Pretty much NEO:
Whats more interesting is that all this 'hype' on the "Falling dollar" and no mention of what the Euro is doing to the EU economies....only the comments directed towards its continual rise.....taking no considerations into how the continued rise of the Euro will and is adversely effecting Europe, as a whole....
This is not even mentioning the "trickle down effects" of the ever-rising Euro.....may it keep rising.

"Did the EU Create a Frankenstein Currency?: David DeRosa"
quote.bloomberg.com...

Excerpt:

"Feb. 19 (Bloomberg) -- When the euro was first issued in 1999, members of the euro zone relished the idea that it might make a dent in the U.S. dollar's status as the world's premier reserve currency. Ironically, that may be the last thing the EU wants to see happen today.

Restored pride aside, a wider adoption of the euro as a reserve currency means that dollars would be sold to buy euros. An even stronger euro now would be as welcome as a return of the plague.

Europe is lagging the U.S. in growth at exactly the same time the dollar is falling and the euro is soaring. The euro has risen 44 percent against the dollar since the start of 2002. And during the fourth quarter, the euro region's economic growth slowed because the 12-nation common currency's gains hurt exports.

The euro's gains are being blamed for Europe's torpor. Politically, allowing the euro to continue upward may be damaging to the European Central Bank, and, in a wider context, the EU itself."


Very good article.



regards
seekerof

Not to worry, that's why we've got that Iraqi oil money coming in soon...and then the Syrian, etc.

well there is some good news, both the British pound and the Japanese Yen dropped in value today...so I see the dollar strenghtening.

I trade currencies full-time so I want to add my 2 cents. If we you look at the long term trend of the US dollar (look at weekly and monthly charts) we can see it is still very much in a downtrend even though it has corrected somewhat.

Why did it correct? For a long time traders have been taking advantage of low interest rates here in the US by selling dollars and in turn taking advantage of higher interest rates abroad by buying pound, aussie and kiwi dollars, euros etc.

Well in recent months the Fed has put the world on notice it intends to start raising rates sometime this year so these traders have been buying dollars back to cover their positions. But now it seems the currency markets have priced in the expected Fed rate hikes and the dollar is set to weaken again (probably more slowly this time but over the coming years to much lower levels).

It seems China and other governments are still buying euros to reweight their currency reserves and hedge against further us dollar downside. Warren Buffet and Soros have publicly proclaimed they are betting the us dollar will continue to fall (which is very interesting as Buffet has not traded currencies before so what does the world's second richest man know now???).

Maybe just maybe the dollar is going to lose its shine as the world's reserve currency down the line. Gold has also steadied and looks like rising again. The Saudis last week stated they have no intention of dumping the dollar as their reserve currency (but behind the scenes continue to buy as many euros as allowed under the saudi central bank rules).

Euro to $2.00 anyone??

It means a Republican is in the White House.........SOS.....different day.