US Dollar Vs Euro

look at this graph of US dollar Vs Euro

I bet it's not what most expected.

finance.yahoo.com...

Maybe the Treasury or whoever does the fiscal engineering knows their game.

Maybe I just shared just a little hope for someone.

[edit on 15/10/08 by ROO-meh]

Somebody asked my the other day why the US$ was strengthening so much and I told them it was a flight to quality.

They then asked how it could be a flight to quality with the US economy in such a tailspin.

I replied, "Think about it this way, the US economy *IS* a piece of SH## right now, but it's the sweetest smelling piece of SH## out there!"

So basically although our economy is tanking, it's not going down quite as fast as others, so the dollar holds it's value? It can't be that simple though, correct? Are the countries that are not pumping in billions gaining on the currencies that are? I'm a little confused about all of this.

reply to post by unityemissions


No. Generally what happens when you pump a lot of money into a market out of thin air it causes inflation. Very basic concept right? Well all though it generally takes a while for the inflation to become visible after doing this our problem is that all the other countries controlled by central banks have been doing the same thing so the dollar in comparison to other currencies is holding or even gaining in value.

This is however an illusion that will only hide the inflation for a short while. I would say I would expect some VERY VERY dramatic inflation on a global scale here in the next year.

[edit on 15-10-2008 by Anonymous Avatar]

Originally posted by unityemissions
So basically although our economy is tanking, it's not going down quite as fast as others, so the dollar holds it's value? It can't be that simple though, correct? Are the countries that are not pumping in billions gaining on the currencies that are? I'm a little confused about all of this.

It's certainly a factor, but many other factors come into play like anticipated differentials in interest rates.

Originally posted by unityemissions
So basically although our economy is tanking, it's not going down quite as fast as others, so the dollar holds it's value? It can't be that simple though, correct? Are the countries that are not pumping in billions gaining on the currencies that are? I'm a little confused about all of this.

Don't worry that's what the federal reserve wants, confusion..

This whole deal stinks, and our crappy canadian elections .. ugh.. more B$
.... [sarcasm] I wonder who'll get elected in the united states [/sarcasm] this world is going beyond crazy while the old ways slip away.

Originally posted by Anonymous Avatar
reply to post by unityemissions

 

No. Generally what happens when you pump a lot of money into a market out of thin air it causes inflation. Very basic concept right? Well all though it generally takes a while for the inflation to become visible after doing this our problem is that all the other countries controlled by central banks have been doing the same thing so the dollar in comparison to other currencies is holding or even gaining in value.

This is however an illusion that will only hide the inflation for a short while. I would say I would expect some VERY VERY dramatic inflation on a global scale here in the next year.

I believe they did this on purpose so that way people falsely believe things are a-okay.

It's a shame; interest, what a scam. Do they print "interest" money? because if not, where does it come from?



[edit on 10/15/2008 by PuRe EnErGy]

Something I would watch for... the dollar will gain on the Euro and the Pound as the DOW loses. =)

finance.google.com...

Will explain after my nap...

Sorry to be the idiot poster but i don't quite get the graph in the OP's link. Does this graph mean the Euro is closer to the Dollar's value now? Like way back in Aug04 (on the graph) the Euro was worth 1.55 times more than the $ whereas now it's somewhere between 1.35 and 1.40?

The Dollar is only showing dominance over the Euro and the Pound because the EU & UK haven't yet worked out their mortgage backed security toxicity issues.

Just look at a chart of the Dollar/Japanese Yen...it provides a more accurate perspective of actual dollar strength, or lack thereof.
In fact today the dollar broke below the 100 yen support level today currently sitting below 99.70 which is fairly significant for it's been above 100 historically for decades now.

The Dollar now has a credibility problem. Nations are not trusting the powers to be to correct the problem by merely throwing more monopoly money at it.
Excessive borrowing and cheap credit are what got us into this predicament to begin with.

We haven't seen the end of it. The Derivatives which were an under the table measure of insuring the investor against losses on their investments are coming due soon and no one has the money to pay these derivatives policy holders/investors.

This will be a major problem.

reply to post by screamo


Yes, the graph represents the price of the Euro in the numerator and the price of the dollar in the denominator. So, 1.55Euros to 1.0 Dollars. With 1.55 being greater than 1.35 means the dollar has gained ground on the Euro but, it's still pretty much 35% less than the Euro.
A weaker Euro will help the EU's imports. With the excessively weak dollar it was killing the EU's strongest economy and it's biggest import which is German Automobiles.
I recently saw an interview of the Audi US sales manager who said that their sales were down 28% from September of last year. With the credit crunch in October things will only get worse.

IMO people with real wealth know when a currency is not worth holding. When you see the US Currency start to tank you'll know it's all over for the US economy as everyone will be selling off for a better curency or Gold\Silver\etc. As long as it holds it's value then it's an idicator that there is still faith in a recovery.

When you start to see this is when I would start to panic.