US Dollar – Still King

When investors need liquidity, the world still flocks to the Dollar...

 

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No country or currency stays on top forever, and some see signs that the dollar is already starting to slide

 

That is too bad, I have enjoyed a good economy, but sadly you are right.

 

What are some of the signs that the dollar is starting to slide?

 

As long as the U.S. looks better fiscally than other nations, it will be able to finance its deficit. But that doesn't mean it can continue to bleed red ink forever. In the short term, interest rates are likely to remain low as the Federal Reserve tries to nurse the economy out of recession. In the long term, however, unchecked borrowing could lead to higher interest rates and slower economic growth. As such, the debt has serious implications for savers and investors.

 

There's no denying the numbers. The U.S economy appears on the brink of a slowdown and whether that ultimately means a soft landing, or a screeching halt, no one can predict the severity or the timing.

 

Your right!very clear explanation

 

I am not sure if these numbers are 100% correct. But I recently read that:

Since the US went off the gold standard in 1933 ... the dollar has lost 96% of it's value.

If you look at it only from the year the US went off the silver standard in 1965 -- the dollar has lost 76% of it's value. The number since 1965 seems to be reasonable. I know you could buy a cheap car for about $3,000 back '65 ... and today a cheap car will run you about $12,000. Other things like houses and gasoline have gone up more than 4x.

In light of this, i dont know why more people don't buy bullion as a hedge on inflation.

 

Hi michael, what point has made you so impressive?

 

I think the dollar in its current state is failing. And its really our own fault. I can not believe they agreed to this stupid Federal Reserve idea. Every dollar that is printed is instant debt. Why are we even outsourcing out money production? I really think JFK had it right when he made Executive Order (E.O.) 11110. We should have stayed at the least on the silver certificates idea. Here is C & P for those of you not familiar with his order.


President Kennedy's Executive Order (E.O.) 11110 modified the pre-existing Executive Order 10289 issued by U.S. President Harry S. Truman in 1951, and stated the following:
"The Secretary of the Treasury is hereby designated and empowered to perform the following-described functions of the President without the approval, ratification, or other action of the President..."
The order then lists tasks (a) through (h) which the Secretary can now do without bothering the President. None of the powers assigned to the Treasury in E.O. 10289 relate to money or to monetary policy. Kennedy's E.O. 11110 then instructs that:
SECTION 1. Executive Order No. 10289 of September 9, 1951, as amended, is hereby further amended (a) By adding at the end of paragraph 1 thereof the following subparagraph (j):
'(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of an outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,' and (b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof.
SECTION 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.
John F. Kennedy, THE WHITE HOUSE, June 4, 1963.

 

I appreciate your insight and outlook on dolor valuation.Thanks!

 

Lets hope for a soft landing.

 

Ginger do you thing the chinese renminbi can climb to be closer to the Euro as a world currency?

 

In last two years the USD has not been doing well. So, I totally agree with Ginger that no currency in the world can always remain on top. By the way, Euro is also doing well since it was introduced a decade before.

 

@ renu
European countries and others like Australia have high taxes on fuel. This pays for some of the infrastructure like roads, bridges. It also pushes the price up to encourage economical use.
Nearly all currencies have risen in comparison to the weak US dollar. Your dollar is week because your economy is stuffed, your debt is huge, and you are spending billions a day on a war that you shouldn't have started.
Unfortunately oils is sold in US dollars at present so you sad arsed bastards are making it more expensive for everyone.
All this will do will force oil to be sold in different currencies such as the euro.
Once oil is not tied to the US dollar, your economy will be cut loose and you will be rapidly heading for third world status

 

since the past few weeks we have seen that the dollar is appreciating against the Euro and its predicted that by the august 2011 the euro dollar parity would be 1.081.

 

As far as i can predict , dollar will remain the king, it will have its ups and downs like any other currency but i wont just fall into pieces, i mean how can you even think it will , even today 70% of the world trading is done on Dollars.If the dependency level is so high then how can it just fall ?

 

It is true. But at least there is a difference between a currency being on top for longer period than a currency that is not at all stable in its position.

 

I couldn't get your point you have stated here.Would you please put it a little more detailed.

 

Not anymore is it ? its depreciating since the past one week !