Currencies all over the world are reporting record high values versus the dollar, and even the economy of impoverished Bangladesh is enjoying a trade surplus with the US. As Maverick Libertarian Republican Rep. Ron Paul pointed out recently on Voice of America News: "If you had been holding Indian rupees - you would have made 13 percent." Similar profitability understandings may be behind recent Russian dollar sales. VOA News reports that the amount of U.S. dollars held by private Russian citizens has dropped since 2002 from $35 billion to less than $12 billion as of July 1. The fact that the dollar is seen as weak all around the globe has also ignited a debate in Kenyan economics circles whether to peg the shilling to the euro, in no small part due to the fact that "the country’s main trading partners are inclined more to euro than the dollar."
But the best indicator of the lack of international investor confidence in the dollar comes from this article:
Gold prices in dollars were up sharply in London, Zurich, and Hong Kong.
As U.S. economic growth is deemed to be slowing, the effect on the exchange rate of the dollar is causing no small amount of concern to Americans abroad - and to the Federal Reserve. So, as militarily muscle-bound as the United States is, we are an economic pushover, a ripe target for the world's beach bullies to kick oil sand in our faces.
Do you notice that there is a slant to the deck that wasn't there before? Watch that deck chair! You wouldn't want to damage your chance to enlist in the military to protect the dollar!
Article comments
1 - Thomas
Clearly, we need a president who understands money. We need Ron Paul.
2 - Dave Nalle
Shall I even bother? Oh why not. Been a while since I took the trouble to eviscerate a 'Realist' rant.
But you would be well advised, based on yesterday's 150-point drop,
That would be a 1% drop. The only reason to use the raw number is to scare the ignorant. And how is that 1% drop worse than the 2% drop back in June (270 points) or the 4% (500 point) drop back in February, or the 12% three week drop back in January of 2003? Well, what all those drops have in common is that they were followed by recovery, despite being enormously worse than today's 1% drop. It also helps to look at a slightly longer term. Well gollleeee! If you look at that 1% drop it's part of a 3.5% increase (500 points) over the course of a month. Gosh, that doesn't sound like a disaster.
"Do these people realize that part of the reason for this [$3 per gallon cost for gasoline] has been the steady devaluation of the U.S. dollar versus the Euro, U.K. pound and Canadian dollar? Since the cost of a barrel of oil is priced in U.S. dollars, the Saudis, Brits, Canadians and Norse need to charge a higher price in order to just stay even."
What, Vikings are selling gas now? Does this [Edited] not realize that if you adjust for normal inflation AND the decline in the value of the dollar, at $3 a gallon gas currently has a real cost of about 20 cents less per gallon than in 1980.
The Sydney Morning Herald opined this morning, "Yes, we have a US dollar rout."
A dollar rout would be represented by people taking their investments out of dollars at an alarming rate, yet despite the gradual decline as some investments were switched over to Euros starting in 1999, there is still 10% more international investment in dollars than there was in 1995.
OMG the sky is falling! Does someone pay you to spread the manure so thick?
Dave
3 - Clavos
"OMG the sky is falling! Does someone pay you to spread the manure so thick?"
No, as a good liberal, he does it pro bono...
4 - Scott M.
Yep, just label everyone that disagrees with you a liberal. Nevermind how ridiculous that sounds when the person is calling for sound money, less spending, etc... Yeah, definitely liberal ideas...
He attacked what Bush has done to the economy so he must be a liberal?
My conservative brethren did not used to be so stupid. What happened?
5 - Dave Nalle
Scott, Clavos did show a lack of terminology discipline. What he meant to say was that Realist is a left-wing alarmist. It's one thing to raise legitimate concerns. It's something entirely different to gin up half-truths like this and then announce that armageddon is upon us. That's just politically partisan scaremongering.
Dave
6 - bliffle
They drank the koolaid. As instructed.
7 - gonzo marx
imo, the big "adjustments" will come as the Housing market's implications start to catch up with other leading indicators
the whole sub-prime fiasco is looming...
then there's the dollar value on the world market...
both from Reuters, with links to hard data in the articles...
food fer Thought, eh?
Excelsior?
8 - Ruvy in Jerusalem
'Realist' spreading the manure? You mean the articles from the New York Times and Forbes? Apparently somebody is seeing to it that the shekel does not rise against the dollar It's back to being worth 22½ cents instead of 25 cents. But the Euro has skyrocketed here to NIS 5.84. That means that a can of coke costing €9.50 costs NIS 56!!! Fifty six shekels for something I can get for six shekels in Jerusalem? Fuck the Europeans! I'll stay home!
While you idiots in America fiddle, the fire is going to burn your asses off. You guys will be broke in no time... Boy am I glad I do not own dollars...
9 - Doug Hunter
"Boy am I glad I do not own dollars"
Me too! Unfortunately, I live in the US.
10 - Dana Curtis Kincaid
"My conservative brethren did not used to be so stupid. What happened?" - Scott M
What happened was that Republicans hung their hats on a moron, and like the Pharaoh in the old Biblical story, they saw disaster coming but hardened their hearts and decided to ignore it. Like the Ravenous Bugbladder Beast of Trall, if you can't see it, it doesn't think it can see you, correct?
The Republican thirty percent or so of the population that hasn't abandoned the Party has religion, or finances or NRA membership invested with the Party, and to admit a mistake or quit it after all this time is simply unthinkable.
After all, this is the Titanic of countries! It is unsinkable!