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Currency Intervention Won’t Halt the U.S. Dollar’s Nosedive
istockanalyst.com — In fact, the United States holds just about 1% of the world ’s $7.6 trillion of foreign currency reserves, and our total position amounts to just 2.5% of the total daily volume of foreign exchange trading. Here’s the bottom line: If the U.S. dollar is going to fall, the U.S. Treasury is completely powerless to do anything to stop it.
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- americangoy, on 07/03/2008, -1/+25"If the U.S. dollar is going to fall, the U.S. Treasury is completely powerless to do anything to stop it."
Well.... why do you think we are using our armed forces to keep the dollar as the only allowed currency for oil trading?- Zarokima, on 07/03/2008, -1/+9Because they hate our freedoms and have WMDs?
- fireburner23, on 07/03/2008, -0/+5I've often wondered what happens once our currency is worthless. What do we do then? What about all the debts?
- ljrdxyh, on 07/04/2008, -0/+2see Yugoslavia's 1993-94 hyperflation.
- ramilehti, on 07/04/2008, -0/+3see germany before WWII
and you have similar goons in power as germany had then. How appropriate.
- Zarokima, on 07/03/2008, -1/+9Because they hate our freedoms and have WMDs?
- Thrilltone, on 07/03/2008, -1/+14Yup, we invaded Iraq right after Saddam announced that he was going to stop selling oil for dollars.
As soon as the dollar is unpegged... it's Beyond Thunderdome Baby - theNazz, on 07/03/2008, -2/+7I know, let's change our currency designs again so that we have another excuse to print up more money. It's not like the old money is out of circulation and not accepted. I think we need another new $20, $10, and $5 bill...
- PolishLogic, on 07/03/2008, -0/+1actually, they do begin taking old designs out of circulation when they run out new ones. I don't know about your experiences, but it's not easy to find an old $100 anymore. I don't think I've seen one with the old design in a couple of years now. It's probably been at least a year and a half since I've seen an old $20 or $5 design, too.
- PolishLogic, on 07/03/2008, -1/+4I'd prefer to see the Fed raise these ridiculously low rates.
- sgiffy, on 07/03/2008, -0/+2They're worried about the economy. Credit problems are still out there and they are afraid of triggering a recession. The ECB on the other hand is much more worried about inflation. Both are walking on the razors edge so to speak, but just on different sides.
A collapse of the commodities bubble and/or a strengthening of the economy would likely bring the rates clsoer together.- ljrdxyh, on 07/04/2008, -0/+3The economy is already in a recession and quickly spiraling into a depression. There's no commodities bubble, the dollar is so devalued that everything seems real expensive to U.S. Americans, but such as
South Africa, they don't seem that expensive.
- ljrdxyh, on 07/04/2008, -0/+3The economy is already in a recession and quickly spiraling into a depression. There's no commodities bubble, the dollar is so devalued that everything seems real expensive to U.S. Americans, but such as
- sgiffy, on 07/03/2008, -0/+2They're worried about the economy. Credit problems are still out there and they are afraid of triggering a recession. The ECB on the other hand is much more worried about inflation. Both are walking on the razors edge so to speak, but just on different sides.
- Koloss, on 07/03/2008, -1/+3Is this news to anybody?
- OCSmoke, on 07/03/2008, -1/+3Apparently you all missed Paulson's statement:
"I think there is a very strong possibility that we will be growing at the end of the year. We will have stronger growth at the end of the year than we have right now."
There you have it. Later this year it's all chill. The goobermint says so. - sgiffy, on 07/03/2008, -3/+2The fact that the dollar rose on the ECB's rate hike shows that the danger of a massive slide is somewhat overblown. Assuming the overall economy begin to strengthen, or the commodities bubble pops, and the fed is able to raise rates, things should improve. Right now a combination of interest rate disparity and a global savings glut are weakening the dollar. Nothing too fundamental, or all that long term.
And Europe does have an incentive to help us, its called their export economy. Just ask Germany. - 3tcp, on 07/04/2008, -1/+3Uh, this article suggests using money denominated in foreign currency that the US government has saved to influence the exchange rate of the dollar. This would be a very major shift in monetary policy, wouldn't help much and would hurt lots.
What they're suggesting is that the fed sell any euros or yen that it has in reserves and buys dollars with them. This strengthens the dollar by increasing its demand while weakening a foreign currency by increasing its supply. China does something like this in reverse - it sells its own currency (yuan) and buys dollars so that their exports are less expensive in the US. That is why China owns so many dollars.
The writer is suggesting a practice that has caused very major depressions in small countries and would be seen as an abandonment of capitalism by other countries. Basicaly, this author is nuts. - shithitinthefan, on 07/04/2008, -1/+2Europe's banking policies are only serving to delay a similar or greater slide in the value of the Euro.
- WisdomOne, on 07/04/2008, -1/+2sgiffy - I can't imagine a more off base assessment. Google US money supply and educate yourself. We are facing unprecedented challenges as a country. Also, there is no such thing as a commodities bubble. People in the know are taking defensive positions for good reason.
- tufftugg, on 07/04/2008, -1/+3 China owns what happens to the U.S. currencies.
- LSDRunner, on 07/05/2008, -1/+2I'm investing in Alberta real estate (by the oil rigs), and keeping my savings in Canadian or Euro, if not gold. How times have changed.
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