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<p>[QUOTE=&quot;Bluesboy65, post: 1153818, member: 23329&quot;]It&#039;s true that the dollar had reached recent historic highs at about 120 in July 2001 (my dollar chart info only goes back to 1985) and this was at a time where the DOW had made it&#039;s incredible surge from about $5,500 in 1996 to about $10,500 in July 2001.&nbsp; If you throw out the lows and highs over the past 26 years the dollar has been hanging out in the high 80&#039;s or low 90&#039;s give or take.&nbsp; If we were to just use 90 as a rough average over the past 25 years and the 74 range that was breached in &#039;08 (this is also the present value) the dollar has lost 17% of it&#039;s value since July 2001.</p><p><br /></p><p>If we use 17% as the &quot;adjusted&quot; decline of the dollar, that means that the present DOW level of roughly 12,200 is really worth about 10,614 (remember it was $10,500 in July 2001).&nbsp; Of course if you were buying in to the stock market in 2001 and you have been holding since that time, you&#039;re not dealing with adjusted numbers and would have experienced the full 37.5% loss; so the $12,200 DOW is really worth $7,625 in nominal terms.</p><p><br /></p><p>One other point, whether you use 17% or 37.5% loss in value of the dollar over the past decade (take your pick), these are BIG numbers.&nbsp; The Fed could shore up the dollar tomorrow by sharply increasing rates but of course that would inhibit growth, stymie exports, increase unemployment and damage prospects for a recovery.&nbsp; The other alternative is to continued accommodation.&nbsp; Given the Fed’s mandate to &quot;to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates&quot; I expect them to choose the latter.&nbsp; Not sure what constitutes a collapse of the dollar but I do expect it to move lower.</p><p><br /></p><p>Bluesboy65[/QUOTE]</p><p><br /></p>

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