21-11-2003 21:01									#1
	Does lower confidence in the dollar mean that investors see the US as less stable? Support Apolyton, buy Call to Power 2

Rethinking the dollar

Is the weak dollar only a result of US economic policy or do investors fear that the US govt is less stable now? I think that terrorism against the US is starting to weaken the dollar. What do you guys think?

	21-11-2003 21:07									#2
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I doubt anyone fears the USG is less stable, even if it is run by morons.

	21-11-2003 21:12									#3
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Stupid poll.

An unstable economie does not automaticly leed to a fall down....

Yes the investors are afraid of investing in the US but it wont colapse because of that....I takes a lot more than that.

Do you know what a recession is? It happens every now and then but countries (in general, unlike argentina and Mexico) get out of it.

Spec.

	21-11-2003 21:17									#4
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quote: Originally posted by Spec Stupid poll. An unstable economie does not automaticly leed to a fall down....

No, but it certainly increases the risk.

quote: Originally posted by Spec Yes the investors are afraid of investing in the US but it wont colapse because of that....I takes a lot more than that.

The question really is only that if they are afraid of investing in the US, not whether or not that fear will cause a colapse, but it might do that.

quote: Originally posted by Spec Do you know what a recession is? It happens every now and then but countries (in general, unlike argentina and Mexico) get out of it. Spec.

The question is has the risk of economic colapse in the US increased, and if so is that increased risk causing investors to lose confidence in the dollar.

	22-11-2003 12:09									#5
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as much as you would like the U.S. economy to fail. It isn't going to happen.

	22-11-2003 13:47									#6
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I don't see why a terrorist attack in Istanbul would logically cause the value of the $US to fall. But then again, the inetnational money markets are little more then speculation.

If you want to assume that some logic is involved, then I *guess* that you could look at the September 11 attacks accelerating the then decline into recession causing fears that further attacks would either tip the US back into reccession, or cause the US government to increase spending, and it's deficit, but even more.

A really scary explination is that this behaviour reflects a lack of long term confidence in the US's finances. This argument is butressed by the steady increase in the price of gold in the last few months, sugesting that gold is taking over from $US as a the place to stick money during bad times. The fact that conservative publications like The Economist are predicting a major debt crisis for the US in the next few decades has probably lead to a reluctance to park money in US stocks and bonds.

	22-11-2003 14:14									#7
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A weak dollar just means that the US economy is weak, not our entire nation.

	22-11-2003 14:58									#8
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Please please please let the US dollar get weaker, the weaker it is the more dollar I get paid

	22-11-2003 15:00									#9
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you see, it disgusts me that these commies want the U.S. to fail. They want to see starving people on the streets, just so they can say. "See, this wouldn't happen under communism."

Some of these people are the same people who wish for more death and mayhem in the middle east just to prevent Bush from being re-elected.

	22-11-2003 15:32									#10
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no

	22-11-2003 21:29									#11
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Weak dollar ??? How is that ?

The dollar is almost exactly at the level it had when the Euro was created, and we did not hear then that the dollar was weak.

When the dollar will fall at 1.64 (currently 1.19), as it has already done in the past, then we could talk about a weak dollar.

On the other hand, it is true that the twin deficits can be seen as a potential threat on the dollar strength, but Alan Greenspan two days ago explained quite convincingly that we are now in an era where unbalances are smoothly corrected. US citizens are likely to participate in sharing the burden of the smooth correction.

	22-11-2003 23:04									#12
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I wouldn't worry about it. It's still strong, and furthermore it's stable. Euro has risen a bit, slowly and steadily, but then again that was to be expected as it dropped so down at some point. Doesn't mean anything.

Besides, this is better for me, because now I can afford to spend more dollars in the US! . So I'll buy more.
Dollar is not collapsing.. it's strong like always.

But, some folks might invest in currency other than dollar for a while, if there are investors at this current moment investing in currencies. Nothing dramatic.

	22-11-2003 23:29									#13
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For a country with the largest economy worldwide and a persistent 5-6% current account deficit, the dollar is very strong. This indicates that the US still is perceived as a relatively more lucrative place to invest than other major economies, such as Japan and the EU.

	22-11-2003 23:37									#14
	Re: Does lower confidence in the dollar mean that investors see the US as less stable? Support Apolyton buy from Amazon

quote: Originally posted by Kidicious Rethinking the dollar Is the weak dollar only a result of US economic policy or do investors fear that the US govt is less stable now? I think that terrorism against the US is starting to weaken the dollar. What do you guys think?

The dollar is weak because the US gov't has to largely borrow money and most of the money it borrows is from other countries. So it has to sell the US dollar and that pushes the price of the US dollar down.

The money the US gov't borrows from US citizens means less money available for spending and investment. That weakens the econmy.

So the low dollar is very much the result of the Republicans spending money like there is no tomorrow.

The Iraqi freedom fighers/Terrorists/banditos also push the dollar down. Everytime they attack, the US is forced to spend more money to fight them. That means the US has to borrow more money.

	22-11-2003 23:41									#15
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quote: Originally posted by Dissident you see, it disgusts me that these commies want the U.S. to fail. They want to see starving people on the streets, just so they can say. "See, this wouldn't happen under communism." Some of these people are the same people who wish for more death and mayhem in the middle east just to prevent Bush from being re-elected.

Nah, I'm just being a good ol' American capitalist. The more attacks on the US, the more I can make money off of betting against the US economy. And the guys who are really making money off the US are the Saudis. The price of oil has shot up after a bunch of Saudi terrorist attacked the US and the Saudis are laughing at the US all the way to the bank.

	23-11-2003 00:46									#16
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quote: Originally posted by Dissident you see, it disgusts me that these commies want the U.S. to fail. They want to see starving people on the streets, just so they can say. "See, this wouldn't happen under communism." Some of these people are the same people who wish for more death and mayhem in the middle east just to prevent Bush from being re-elected.

Predicting and wishing are two different things rockhead.

	23-11-2003 00:50									#17
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quote: Originally posted by DAVOUT Alan Greenspan two days ago explained quite convincingly that we are now in an era where unbalances are smoothly corrected.

It's his job to convince people to invest in the dollar. If he is saying these things it is apparent that he sees that some confidence in the dollar has been lost. Now how convincing is he really?

	23-11-2003 01:07									#18
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quote: Originally posted by Tingkai The dollar is weak because the US gov't has to largely borrow money and most of the money it borrows is from other countries. So it has to sell the US dollar and that pushes the price of the US dollar down.

I think the US govt still borrows most of it's money from US citizens, but more and more money is borrowed from foreigners. The amount that we borrow from foreigners is directly related to the trade deficit. When the economy slows the amount of imports the US buys will shrink and so will foreign investment. The larger the trade deficit and amount of FDI the greater the risk to the dollar and the US economy. It's never been too bad in the US, but generally around the world when foreign investors lose confidence in your currency and your FDI is very high it is disasterous to your economy.

quote: Originally posted by Tingkai The money the US gov't borrows from US citizens means less money available for spending and investment. That weakens the econmy.

Hmmm... At a period where there is unemployment this isn't true. It depends on how that borrowed money is spent though too. Spending money on Iraq is going to take away from what can be spent in the US.

quote: Originally posted by Tingkai So the low dollar is very much the result of the Republicans spending money like there is no tomorrow.

True, but mostly because the trade deficit is increasing as a result of the increase in spending.

quote: Originally posted by Tingkai The Iraqi freedom fighers/Terrorists/banditos also push the dollar down. Everytime they attack, the US is forced to spend more money to fight them. That means the US has to borrow more money.

True, but it's also because they increase the risk of investment. Terrorism has the real potential to affect economies, and investors see that.

	23-11-2003 01:11									#19
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quote: Originally posted by Tingkai Nah, I'm just being a good ol' American capitalist. The more attacks on the US, the more I can make money off of betting against the US economy. And the guys who are really making money off the US are the Saudis. The price of oil has shot up after a bunch of Saudi terrorist attacked the US and the Saudis are laughing at the US all the way to the bank.

Seems to me that the EU and Japan, whom don't produce oil, are hurt the most. But the price of oil is the biggest factor in the world economy. The Saudis are increasing the price only because the world economy is growing right now. When the world economy starts contracting they will lower the price again.

	23-11-2003 02:07									#20
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quote: It's his job to convince people to invest in the dollar. If he is saying these things it is apparent that he sees that some confidence in the dollar has been lost. Now how convincing is he really?

No, that's John Snow's job. Greenspan is precluded by a gentlemen's agreement from making any comments directly touching the relative value of the currency. I thought somebody with an economics degree would know this.

	23-11-2003 02:19									#21
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quote: Originally posted by DanS No, that's John Snow's job. Greenspan is precluded by a gentlemen's agreement from making any comments directly touching the relative value of the currency. I thought somebody with an economics degree would know this.

Hehe, technically you are correct, but the fact is, and this is an example, that people don't give a crap what Snow says, only what Greenspan says, so Greenspan is left with the responsibility.

	23-11-2003 04:18									#22
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quote: Originally posted by POTUS A weak dollar just means that the US economy is weak, not our entire nation.

Actually, it just means that the supply of $US is slightly higher then the demand for them at the current price Don't read too much into currency valuations - the Australian economy was recently booming at the same time that the $A was reaching new lows against the $US.

	23-11-2003 05:57									#23
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quote: Originally posted by Kidicious Hehe, technically you are correct, but the fact is, and this is an example, that people don't give a crap what Snow says, only what Greenspan says, so Greenspan is left with the responsibility.

You should read the text on the FED site. In fact Greenspan made a point that a protectionnist policy would be adverse to the smooth correction of unbalances.

	23-11-2003 06:06									#24
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quote: Originally posted by DAVOUT You should read the text on the FED site. In fact Greenspan made a point that a protectionnist policy would be adverse to the smooth correction of unbalances.

So. My point was that he's going to be very carefull not to say anything that would make the impression that the dollar was unstable or that would reduce confidence in the dollar.

	23-11-2003 06:16									#25
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Weak dollars are good for American jobs. Strong dollars are good for American tourists.

	23-11-2003 07:21									#26
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quote: Originally posted by chegitz guevara Weak dollars are good for American jobs. Strong dollars are good for American tourists.

And most importantly, weak dollars are good for expats (your friendly countrymen who get to vote without paying taxes ).