I've been hearings lots as of late about many major central banks(of different nations) selling off dollars, particularly South korea. The dollar has lost 40 percent of its value against other currencies the last few years, and he seems to be tumbling further. Some people claim that a weak dollar is good for trade, but I'm not so sure. For years, most of the world's savings have been put into the U.S. through the buying of our currency. These buyers are supposed to get back interest for their investments in the currency, but with the recent decline, they most certainly aren't. With the Euro rising as a competitor, and with the volatile relations we have with the world, what incentives do these countries have to NOT dump their dollars? If the Dollar crashed, wouldn't that severly hurt the middle class?

The problem of the dollar failing seems to be like this 800 pound gorilla sitting in the room that noone is talking about, much less daring to do anything about it.  :-\\

A Japanese company I deal with tried to make a deal based on the dollar with me recently and I refused and demanded that we came to an agreement in either Euros or Yen as last year I lost, well lets just say a considerable amount, when I agreed to take payment in dollars. It does seem crazy at the moment as the dollar was always a bit of a gold standard for international business.

Perfect example UKVisitor, of the problem.

Also, if OPEC makes the switch to Euros, you might as well re-name the Dollar "Peso". Or even worse than that, it would be like the German currency in the 30's, taking wheel barrow fulls to purchase a loaf of bread. Its not called the "petro dollar" for kicks. OPEC switching would be devastating, and I think its a very real possibility.

I guess you have bad timing at posting.  The euro has been falling for the past three days, with the dollar expected to make major gains against it this week.  With the help of Europe's biggest economy, Germany, having an all-time high unemployment rate of 12.6%.  Also Greenspan endorsed the dollar on Wednesday.

Also the job numbers tomorrow are expected to drive the dollar even higher.

Here are some of today's stories:

Currencies: EU growth woes push dollar higher on euro
Link: http://www.iht.com/articles/2005/03/03/business/bux.html

Dollar Heads for Weekly Gain Versus Euro Before Jobs Report
Link: http://www.bloomberg.com/apps/news?pid=10000085&sid=abOXi_ksvSDU&refer=europe

--Now then I'm not saying the dollar is doing great, it isn't.  But you picked a bad time to post this with all the good news about the dollar coming out and all the bad news with the euro coming out.

Also a weak dollar does improve trade and helps fight the trade deficit by making US goods more competitve in foreign markets.  Both a strong and weak dollar have their advantages.  Remember 2000?  All CNBC talked about was the dollar being to strong.  It's best to have it balanced, not to strong and not to weak.

And to clarify, OPEC will not risk switching from the dollar to anything.

A weak dollar can have benefits, yes. But there is such a thing as too weak. Because if it drops to a certain level, it will seriously begin to affect our standard of living. I know there has been some good news as of late, but here has been before and then it went right back into the same slump. Some of the stuff going on right now, ESPECIALLY with oil producing nations regarding the dollar, is very dangerous. A weak dollar is one thing, a COLLAPSED dollar is another animal.

IN support of GW's point it has made it more attractive for me to consider manufacturing some of my product in the USA at the present time as the dollar value has made it more economically viable. I mean, its not as if the US economy is on the verge of collapse or anything at the moment. The government does need to address the trade gap problem though as this article points out:

http://newsvote.bbc.co.uk/1/hi/business/4254369.stm

IN support of GW's point it has made it more attractive for me to consider manufacturing some of my product in the USA at the present time as the dollar value has made it more economically viable. I mean, its not as if the US economy is on the verge of collapse or anything at the moment. The government does need to address the trade gap problem though as this article points out


As a US citizen, I say go for it.  :)

I just hope tomorrow's job report holds true to the 225,000 estimate.  It always seems the US department of labor overestimates.  That will pull the dollar up as well I hope.

Hey keep the dollar weak for a few more weeks until I get my manufacturing order in (greedy capitalist Gordon Gekko profit head on :P)

Estimates: 225,000

Total jobs created in month of February 2005: 262,000

Ahead of street estimates!  Thank God.

While the trade deficit is important, the biggest threat to the $$$ is the enormous federal deficit (thanks to Lil' Georgie's boondogle tax cuts) and the threat of further enormouser ( ;)) deficits from his hair brained Social Security plan.  A large percentage of that debt  is held by foreigners, who may not want to take on too much more.  What this economic idiocy could cause would make 1929 look like prosperity.  And we all thought the Republicans were the party of the ballanced budget.  So we have "tax and spend" Democrates (ie pay as you go) and borrow and spend Republicans (ie to he11 with the future, full speed aback).  Go figure. 

My two cents: Buy gold  ;D

-DR  :D

My two cents: Buy gold  ;D

-DR  :D


Coiuld be good advise, but better yet, go find it.

Estimates: 225,000

Total jobs created in month of February 2005: 262,000

Ahead of street estimates!  Thank God.

How many is one thing.  What kind, where, and for what wage is another.

How many is one thing.  What kind, where, and for what wage is another.


Fries with that sir?

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7858972

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7858972


Interesting, but the fact remains that a large portion of our national debt is held by foreigners.  They could very easilly decide to bring us downthrough manipluation of that debt, and there is not thing one we could do about it with the deficits as high as they are.

Interesting, but the fact remains that a large portion of our national debt is held by foreigners. They could very easilly decide to bring us downthrough manipluation of that debt, and there is not thing one we could do about it with the deficits as high as they are.


Finally! Someone gets it.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7858972


Well that didn't last long.

Dollar Heads for Biggest Winning Week in 11 Versus Euro, Yen

The dollar headed for its biggest winning week in 11 against both the euro and the yen in Asia on speculation signs of accelerating U.S. inflation will force the Federal Reserve to raise interest rates in larger increments.

The Fed this week increased borrowing costs for a seventh time by a quarter percentage point amid government reports showing rising consumer and wholesale prices. The yield on 10-year U.S. Treasury notes rose 0.2 percentage point this month to the highest since June, adding to the attractiveness of U.S. assets.

``The dollar's upward trend is going to continue,'' said Toru Umemoto, market analyst in Tokyo at Keio University's Global Security Research Center. ``Yields are rising, and the U.S. economy is strengthening. All of this is dollar supportive.''

Against the euro, the dollar traded at $1.2932 at 10:15 a.m. in Tokyo, from $1.2940 late yesterday in New York, according to electronic currency dealing system EBS. It was also at 106.51 yen, from 106.31. The dollar has risen every day this week against both the euro and the yen, up 3 percent and 1.6 percent respectively.

Umemoto, who works for former vice-finance minister Eisuke Sakakibara, said the dollar may rise to 108 yen next week.

Full story: http://www.bloomberg.com/apps/news?pid=10000101&sid=a6RINks0fWAk&refer=japan

Well that didn't last long.

Dollar Heads for Biggest Winning Week in 11 Versus Euro, Yen

The dollar headed for its biggest winning week in 11 against both the euro and the yen in Asia on speculation signs of accelerating U.S. inflation will force the Federal Reserve to raise interest rates in larger increments.

The Fed this week increased borrowing costs for a seventh time by a quarter percentage point amid government reports showing rising consumer and wholesale prices. The yield on 10-year U.S. Treasury notes rose 0.2 percentage point this month to the highest since June, adding to the attractiveness of U.S. assets.

``The dollar's upward trend is going to continue,'' said Toru Umemoto, market analyst in Tokyo at Keio University's Global Security Research Center. ``Yields are rising, and the U.S. economy is strengthening. All of this is dollar supportive.''

Against the euro, the dollar traded at $1.2932 at 10:15 a.m. in Tokyo, from $1.2940 late yesterday in New York, according to electronic currency dealing system EBS. It was also at 106.51 yen, from 106.31. The dollar has risen every day this week against both the euro and the yen, up 3 percent and 1.6 percent respectively.

Umemoto, who works for former vice-finance minister Eisuke Sakakibara, said the dollar may rise to 108 yen next week.

Full story: http://www.bloomberg.com/apps/news?pid=10000101&sid=a6RINks0fWAk&refer=japan


That is very good news for those who hold our national debt, but those who do have business plans that streatch into the distand future, not just 5, but 50 years.  I just hope that their plans don't include using what they hold to bring us down to enhance their own power (whistling in the wind?).  It is very clear that our "borrow and spend" (on the wrong things) Republicans need to be controlled.  We need to return top budget surpluses by increasing taxes on those most able to pay.

That is very good news for those who hold our national debt, but those who do have business plans that streatch into the distand future, not just 5, but 50 years.  I just hope that their plans don't include using what they hold to bring us down to enhance their own power (whistling in the wind?).  It is very clear that our "borrow and spend" (on the wrong things) Republicans need to be controlled.  We need to return top budget surpluses by increasing taxes on those most able to pay.


Or maybe cut spending on wasteful redundant medicaid and food stamp spending.  Now some is okay, but this people who live off of it year by year need to be cut off.  It's not the government's right to use taxpayers money for anything other than roads, firefighters, police, and military.

The dollar increased on speculation that the inflation going on will continue and force Greenspan to keep hiking interest rates.  Bitter sweet in a way.

Or maybe cut spending on wasteful redundant medicaid and food stamp spending.  Now some is okay, but this people who live off of it year by year need to be cut off.  It's not the government's right to use taxpayers money for anything other than roads, firefighters, police, and military.

The dollar increased on speculation that the inflation going on will continue and force Greenspan to keep hiking interest rates.  Bitter sweet in a way.


Wasteful to feed hungry kids and get them medical exams?  Well, I guess so.  The little bast...ds shouldn't have allowed themselves to be concieved in the first place, so evan though abortion should be illegal, they should just cause themeslves to miscarry.

If you really understood the idea of something called "democracy" you  would understand that WE ARE THE GOVERNMENT and WE THE PEOPLE can decide what we can spend our collective money on.  If you don't want to play the democracy game, you can jolly well  take a hike. 

But by your logic,why should my tax $$$ be spent to protect you from fire?  Why should they be spent so that you can drive on smooth roads?  Why should they be spent to protect you if you choose to live in a high crime area?

Yes, interest rates will probably go up.  Glad I have a low interest fixed rate.  So much for the "ownership siciety".