The dollar is way too high.
cladking
Posts: 28,630 ✭✭✭✭✭
This is spooking the markets.
China wants a high dollar to make their bonds valuable but this
is causing distress.
If we can't get the Chinese to agree to a lower dollar it might be-
come necessary to use two different dollars like a third world na-
tion. The Chinese wouldn't like it at all but their selling would be
insulated from our economy to some extent.
It looks like a lot of what's going on is being engineered by the cen-
tral banks (FED) and they have absolutely no clue. If they just got
out of the markets a while thy'd probably stabilize at higher levels.
China wants a high dollar to make their bonds valuable but this
is causing distress.
If we can't get the Chinese to agree to a lower dollar it might be-
come necessary to use two different dollars like a third world na-
tion. The Chinese wouldn't like it at all but their selling would be
insulated from our economy to some extent.
It looks like a lot of what's going on is being engineered by the cen-
tral banks (FED) and they have absolutely no clue. If they just got
out of the markets a while thy'd probably stabilize at higher levels.
Tempus fugit.
0
Comments
<< <i>Why is the dollar gaining so much ? I don't see why
From wiki: The US Dollar Index (USDX) is an index or measure of the value of the United States dollar relative to a basket of foreign currencies. It is a weighted geometric mean of the dollar's value compared to the euro (EUR), Japanese yen (JPY), Pound sterling (GBP), Canadian dollar (CAD), Swedish krona (SEK) and Swiss franc (CHF).
It was started in March 1973, soon after the dismantling of the Bretton Woods system. At that time, the value of the Dollar Index was 100.000 and has since traded as high as the mid-160s but also into the low 70s. As of August 2008, the USDX was trading in the mid-70s. On March 6, 2008, the index touched 72.89, the lowest since its inception in 1973. It continued downward and reached 70.698 on March 16.
I think the rest of the world figured out that we're not the only ones with #%&*@ politicians.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Why is the dollar gaining so much ? I don't see why
I think the rest of the world figured out that we're not the only ones with #%&*@ politicians. >>
I have a hunch that this is about the size of it.
Three weeks ago the Chinese decided they were getting shorted on
the products they sold here because the dollars kept dropping so they
insisted on the dollar being propped up. It looks like this sort of thing
is no longer any problem for the central banks but when they did it the
markets hads little choice but to implode since the debt can't be paid
off in undeflated dollars. To the Chinese this was out of the frying pan
and into the fire so now we're back on the old path.
It won't take the Chinese very long to figure out they have to find new
markets and cut us and our dollar off. This will mean inflation as fewer
goods are available but will be mitigated a little by construction of new
industrial plant to replace China products.
Of course they may not have totally given up on weathering the fire yet
so beware downdrafts.
<< <i>Why is the dollar gaining so much ? I don't see why
I think the rest of the world figured out that we're not the only ones with #%&*@ politicians. >>
Like Harry Reid (note this is not a political opinion it is the opinion on a Nevadan)