Dollar may crash to $.85 next year
dog77_1999 @ Wed Oct 31, 2007 9:37 pm
Toro Toro:
romanP romanP:
The trade deficit has a lot to do with the decline of manufacturing and skilled labour in America. If America wasn't importing so much from China and depending on their manufacturing labour to supply just about every area of consumer goods that isn't a bulk refined natural resource, there would be no reason to have a trade deficit.
But then America would be poorer and there would be less incentive to invest here and the dollar would be lower anyways. If America became overtly protectionist, one would expect the dollar to weaken considerably.
The idea that a trade deficit is bad and a trade surplus is good is discredited mercantilism. Countries that do not grow often have trade surpluses, as Europe had with America for the past 15+ years.
I don't necessarily disagree that the trade deficit has an effect but America has run a trade deficit since 1980, and in that time, the dollar has traded between 76 (today) on the dollar basket and 140 (7 years ago.) Besides, the opposite of a trade deficit is a capital surplus, i.e. foreigners invest more in your country than you do in theirs. Capital flowing into the country increases demand for your currency. (However, I do think currency traders are focusing on the trade deficit rather than the capital surplus at the moment.)
BTW skilled labour is getting paid in a serious way in America. That is definitely not going away.
Yes, America has had a trade deficit for a while. You have to remember that there is more to the exchange rate than trade. One is inflation, which has been kept under control during this time and can safely say hasn't impacted the exchange rate. The second is the service trade balance. This includes all of the work that Americans do for foreigners(engineers, doctors, dry cleaning). The US runs about 100 billion surplus a year, and continues to grow. Another factor is business repatriating their earnings to the US. Again, because US companies are money whores more money is earn by US corporations than foreign corporations. This helps the trade balance some. Finally, there is investment. This includes direct, bonds, etc. This has been positive for a while, but now is starting to go negative.
In all, I would estimate our real money imbalance to be around 450 billion. The central banks have been covering this spread unitl now. This will eventually fix itself.
romanP @ Wed Oct 31, 2007 9:44 pm
Toro Toro:
Actually, lack of growth generally is a bad thing.
Only with the current economic model, which is not so great in itself, because it assumes that infinite growth is the only way forward, which is impossible because we have finite resources.
I think a sustainment-based economy would be a better idea than a growth-based economy, where we find more innovatives ways reuse what resources we have instead of continuously overproducing like we're currently doing.
OPP @ Thu Nov 01, 2007 8:29 am
romanP romanP:
BartSimpson BartSimpson:
sasquatch2 sasquatch2:
The value of the loonie and the Greenback are more influenced by the price of oil than any other factor IMO.
You don't think our US$9 trillion dollar debt doesn't affect the value of the dollar?
Our debt is the #1 force devaluing the US dollar and the jacktards - Republican & Democrat both - will not do one damn thing to stop the debt from getting bigger.
America really needs to have an armed revolt.
Oh! HELL YEAH!!
Yank-in-NY @ Thu Nov 01, 2007 2:00 pm
OPP OPP:
romanP romanP:
BartSimpson BartSimpson:
sasquatch2 sasquatch2:
The value of the loonie and the Greenback are more influenced by the price of oil than any other factor IMO.
You don't think our US$9 trillion dollar debt doesn't affect the value of the dollar?
Our debt is the #1 force devaluing the US dollar and the jacktards - Republican & Democrat both - will not do one damn thing to stop the debt from getting bigger.
America really needs to have an armed revolt.
Oh! HELL YEAH!!
LOL, says the drunken commie.
neopundit @ Thu Nov 01, 2007 3:38 pm
romanP romanP:
They have a huge deficit with China, which China is not happy about (one very large reason they want to dump the US dollar for the Euro), and I'm sure you're aware of the deficit they owe us too.
If the deficit is a bad thing for America, then how can the surplus be bad for China?
Also, China owns massive amounts of American debt. If the dollar collapsed (which would happen if they decided to unload it all) they would stand to lose a lot of money. They want a strong dollar.
OPP @ Fri Nov 02, 2007 8:29 am
Yank-in-NY Yank-in-NY:
OPP OPP:
romanP romanP:
BartSimpson BartSimpson:
sasquatch2 sasquatch2:
The value of the loonie and the Greenback are more influenced by the price of oil than any other factor IMO.
You don't think our US$9 trillion dollar debt doesn't affect the value of the dollar?
Our debt is the #1 force devaluing the US dollar and the jacktards - Republican & Democrat both - will not do one damn thing to stop the debt from getting bigger.
America really needs to have an armed revolt.
Oh! HELL YEAH!!
LOL, says the drunken commie.
Eh! I found a picture of you:
jocksgt2007 @ Mon Dec 10, 2007 9:26 pm
I for one am hoping to see the USD/CAD rate to be $1.000USD = $0.9900CAD by tomorrow and at $0.8500CAD by the end of the week and $0.500CAD by the end of the year. I welcome a U.S $ free fall. Already the Australian and New Zealand Currencies are soaring against the USD so I think a free fall will happen this week. I hope so.
dog77_1999 @ Mon Dec 10, 2007 10:53 pm
jocksgt2007 jocksgt2007:
I for one am hoping to see the USD/CAD rate to be $1.000USD = $0.9900CAD by tomorrow and at $0.8500CAD by the end of the week and $0.500CAD by the end of the year. I welcome a U.S $ free fall. Already the Australian and New Zealand Currencies are soaring against the USD so I think a free fall will happen this week. I hope so.
Going to the US on vacation?
Actually, that would be really hard to do. I very gradual decline is more likely. $.85 is possible next year.
themasta @ Mon Dec 10, 2007 11:01 pm
I saw this and had to respond, the loonie cannot be "over-valued", that makes no sense. The exchange rate is set by the market and so the value of the loonie is as it is, neither over or under valued in any meaningful sense.
jocksgt2007 @ Tue Dec 11, 2007 4:01 am
Right now it looks like $1.00USD = $1.01CAD so the USD does not seem likely to fall at least this week. But who knows the Markets are very much full of panic.