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  1. #1
    AM Navigator Geno Prussakov's Avatar
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    Unhappy Dollar Keeps Falling...
    The rate is already $1.54-1.55 USD to 1, and economists forecast "a further fall, with the euro rising to $1.70 to $1.75 and the yen strengthening to 90 per dollar in coming months" [source]. What are you doing to protect your cash? Is it safer to keep it in Euros or British Pounds now?

    G.

  2. #2
    Affiliate Manager buyjewelry's Avatar
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    Banks are offering principal protected notes on baskets of currencies with set pay levels after certain milestones. It's a simple way of investing, if you don't mind the banks to make some money from you. (you could do a similar thing yourself for a bit better return)

  3. #3
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by buyjewelry
    Banks are offering principal protected notes on baskets of currencies with set pay levels after certain milestones. It's a simple way of investing, if you don't mind the banks to make some money from you. (you could do a similar thing yourself for a bit better return)
    Nice - there are ways to make the negative work - just a matter of looking at it from another perspective.

    A recession can be a good thing for some people - demand goes down and so does price, so goods are cheaper, which helps out a lot of people who aren't heavily invested in stocks or bonds. Those who jumped on the gold wagon last year or longer ago are happy as pigs in mud right now.
    Peace,

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  4. #4
    SEO: A Specialty - Web Design: Slow or outsourced andbeyond's Avatar
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    Some people are saying the Yen will go to 80 or even 70 against the dollar. That is wild if you went into the Yen when it was 125 about 5 months ago. Not that I did but I wish.

    The Finance director of Japan is not afraid of a strong Yen and wishes the USA would stop being so weak with the dollar.

    The USA Fed rate is 2.25 I believe. It went down one full point in a week. There really is not much more it can go down. Eventually they will have to stop bluffing with cheap credit and lots of liquidity.

    Interesting times we live in.

  5. #5
    I like traffic lights
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    Quote Originally Posted by andbeyond
    Interesting times we live in.
    You can say that again!

  6. #6
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by Drewbert
    You can say that again!

    Interesting times we live in.
    Peace,

    Rexanne

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  7. #7
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    With such rate of drop on dollar, are we going to see $10 a gallon of gas soon ..?
    How much will the imported goods and everything else start costing at that time?. Double, Triple?

    I was seeing a news media in which an analyst opined that in the past the US used to be lender to emerging economies like India. Now, the whole thing is reversed. The US is the borrower from the emerging economies.

    Some how that $10 trillion debt got to hurt us somewhere ...

  8. #8
    Affiliate Manager Howard Gottlieb's Avatar
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    The interesting thing about the weak dollar and our government's lack of willpower to defend its value is that the rest of the world is not facing the inflationary pressures that we are.

    Our core inflation is being driven higher by oil prices, which are priced in dollar terms. Since other currencies continue to strengthen against the ever weakening dollar those countries can purchase oil and oil products with fewer units of their own currency since that currency most likely also purchases more dollars per unit than ever before.

    One would think that Nixon's decision to abandon the gold standard might ultimately go down in history as the worst economic decision our country has made.
    I would rather live my life as if there is a God and die
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  9. #9
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    And then allow the Fed to print money as he wishes without even reporting how much is printed away ... and use it to fund reckless spending and fancy bailouts ..

  10. #10
    Moderator MichaelColey's Avatar
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    That (the falling value of the dollar) is exactly why oil prices continue to rise. Oil supplies are up. Oil demand is down. Basic economics says that either of those should be enough to make oil prices fall, yet they continue to rise. Speculation is another big factor. Even discounting the impact from the declining value of the dollar, I think oil is artificially high due to speculation. I think we'll see some relief soon on both accounts.

    I know some of you understand why the dollar has been falling, based on what you're saying above, but nobody has just come out and said it and I suspect that most don't know. The dollar is falling because the Fed keeps lowering interest rates. They've done that to spur our economy (and it has in many ways), but the negative side effect is that it causes the value of the dollar to fall.

    I don't expect it dollar to continue to fall. The interest rates are pretty close to as low as they can go. As the economy improves, I expect the Fed to hold the rates steady and eventually start raising them again. That will cause the dollar to hold steady and eventually rise.
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  11. #11
    Affiliate Manager PingoPrepaidCallingCards's Avatar
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    Have you scene the new $3 Bill?
    Geno

    This reminds me of the NEW $3.00 Bill that was just announced.

    Digg covered the story with over 4k digg's

    I heard, that it will soon be replaced with the new $4.00 to $8.00 bill. Time to focus on UK affiliate programs.....

    -Brian

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  12. #12
    Staril - Mad Cat Woman Sue's Avatar
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    When I first started in this business a $100 would be about CHF 150 to me. Now it is approximately 100 franks.

    A friend who had a hobby of trading USD against Yen lost all the money he had invested in it ... the $ dropped so quickly that the trading company he was working with closed all the positions.

    I'd love to target the Swiss market for a change ... if only I could find a single affiliate program for a Swiss merchant

  13. #13
    Full Member TLE's Avatar
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    Quote Originally Posted by MichaelColey
    I know some of you understand why the dollar has been falling, based on what you're saying above, but nobody has just come out and said it and I suspect that most don't know. The dollar is falling because the Fed keeps lowering interest rates. They've done that to spur our economy (and it has in many ways), but the negative side effect is that it causes the value of the dollar to fall.
    That's the textbook causation, interest rates (through the bonds market) directly effects the exchange rate. Long story short, investors needs US denominated funds to invest in US bonds. So if US bonds yield (the interest rate) decreases, then the level of demand for US denominated bonds decreases, and hence the demand level for US dollars decreases.

    On the poli-sci/economics frontier, there's a lecture given at some of this country better economics school. The lecture goes something like what ever happens, be sure to get the recession out of the way in an election year. That way you can protect your job by "rescuing" the country and to show your usefulness to the incoming administration. Very troubling especially since historical/empirical data verifies this.

    Unfortunately, IMO it's more likely that interest rates will fall further (and hence the dollar), for the remainder of this year. The prime, currently at 5.25%, could go to 4% (its low in June 2003). The main (only) thing Chairman Bernanke is looking at, at this point, are the inflation numbers. Even w/ the funny business in the oil market inflation looks (amazingly) under control.

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  14. #14
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    I think its better to be in British pounds, because in last months i lost hundreds due to this ups and downs

    ilugh
    Last edited by Trust; March 26th, 2008 at 02:47 AM.

  15. #15
    CPA Network Rep erickb2006's Avatar
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    I heard some corporate US retailers are leaning towards a bargaining approach so that they can stimulate the sales of their higher-end electronics (plasmas, computers, etc.)...could be great news if you want a new big-screen plasma!

    Everyone seems to be looking for the next quick money maker - real estate had its boom and bust; then there's overseas currencies; now, it's oil and other commodities like gold and platinum...isn't this attitude of "make a quick buck and sell" at the heart of the cause of our ailing economy?
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  16. #16
    Outsourced Program Manager DaveAMWSO's Avatar
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    It is a pretty unique time for the economy. I would suggest that the falling dollar is not really a big concern of U.S. economists right now.

    Devaluation of a currency is the traditional way of working out an economic downturn and of bringing trade imbalances back under control.

    I think the bigger risk here is that the Fed and Govt. are now furiously injecting more money into the market in a desperate attempt to stoke demand spending again. The risk of out of control inflation is high. Although really, the fed had no choice but to back up those banks with loan guarantees. If there was a big run on the banks, then we'd really be in for some problems.

    Since the repeal of the Glass-Steagal bill, the banks are up to the same nonsense that created so many problems in the 1920s.
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  17. #17
    SEO: A Specialty - Web Design: Slow or outsourced andbeyond's Avatar
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    Quote Originally Posted by erickb2006
    I heard some corporate US retailers are leaning towards a bargaining approach so that they can stimulate the sales of their higher-end electronics (plasmas, computers, etc.)...could be great news if you want a new big-screen plasma!

    Everyone seems to be looking for the next quick money maker - real estate had its boom and bust; then there's overseas currencies; now, it's oil and other commodities like gold and platinum...isn't this attitude of "make a quick buck and sell" at the heart of the cause of our ailing economy?
    I think it is human nature to try to make a buck or get ahead. If you can do it faster than all the better.

    Some people have said that boom bust cycles are good because the wild speculation and investments make the infrastructure and technology needed for the next phase. Like today we work in the internet industry that grew fast in the 99 - 2000 times creating business models, jobs, technologies and aspirations.

    The problem I see is the close nature of politicians and business that allow conglomeration, reduce competition, and skirt dangerous situations all in the name of record profits and contributions to campaigns.

  18. #18
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    Lots of people out there are worried that with the interest rate tending towards 0% and the Fed out of ammo that the dollar will replace the Yen as the arse end of the carry trade.

    If that happens it's going to be a loooong time b4 the USA pulls itself out of this recession.

  19. #19
    Newbie hotelbooking's Avatar
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    Probably going to the USA for a holiday soon.

  20. #20
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by MichaelColey
    I don't expect it dollar to continue to fall. The interest rates are pretty close to as low as they can go. As the economy improves, I expect the Fed to hold the rates steady and eventually start raising them again. That will cause the dollar to hold steady and eventually rise.
    And as of 4/29, futures traders are now betting that the dollar will now start to climb.
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  21. #21
    Affiliate Manager Alan Hamilton's Avatar
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    Hstory bears out that it takes time for change to affect a recovery, but the time is coming as it always does. My concern however is more fuel related as Exxon execs informed analysts that they intend to hold production levels at todays level through 2012. We'll see how that plays out.
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  22. #22
    AM Navigator Geno Prussakov's Avatar
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    Aug. 8 (Bloomberg) -- The euro slumped to a five-month low against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy slows... [full article, bold font mine]
    It this a beam of hope?

  23. #23
    Full Member Tech Evangelist's Avatar
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    Quote Originally Posted by andbeyond
    Some people are saying the Yen will go to 80 or even 70 against the dollar. That is wild if you went into the Yen when it was 125 about 5 months ago. Not that I did but I wish.
    This isn't the first time that the dollar slid this far against the Yen. I used to deal with Japanese suppliers in the 1980s and 1990s. The exchange rate was fluctuating between 130 and 70 back then. It was a roller coaster ride. If I remember right, it briefly went down to 65 at one point.

    Theoretically, a low dollar should cause more countries to buy American goods, which props up the employment. The problem is that there aren't as many American goods sold on the world market any longer. We no longer have a manufacturing economy.

    My big concern is the price of oil because that market mostly deals in dollars. If problems like this continue, we might see the oil markets switch to the Euro, which could cause more problems for the USA.

    This is all part of the business cycle. It has happened before and it will happen again.
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  24. #24
    Affiliate Manager Howard Gottlieb's Avatar
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    I believe there will be serious issues if our government does not work to strengthen the dollar. Too many commodities are traded in dollar equivalents which makes the rest of the world experience higher than necessary inflation on goods and services.

    A stronger dollar may bring some short term issues as we transition away from cheap foreign goods back to more competitively priced domestic merchandise. But in the long term if the dollar continues to slide countries like China will ultimately stop buying its paper which could be absolutely catasrophic for our economy.
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  25. #25
    Affiliate Manager Alan Hamilton's Avatar
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    Quote Originally Posted by Geno Prussakov
    It this a beam of hope?
    Yes, to put it simply. When a world depends on U.S. trade, defense and commerce support to bolster their own growth, the USD is not in danger of becoming a ruble any time soon! LOL Huge economies like ours must go through an adjustment period occasionally.

    Over the past several years we have had to deal with wars, oil prices, middle east stability, immigration, labor costs and so many other world impacting issues that we were bound to go through a bit of a recession. But not to worry - we will do just fine. Patience.
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