Thread: Dollar Falling

Is anyone more experienced with this. Why is dollar falling? Will it raise again?

Month ago I owed a friend 3800 swedish kronas.

On first july it was enough to give him 510$ and now I must give him 540$.

My country currency also is getting closer to the value of dollar.

For example 1000$ at first month was around 1450 bosnian marks,
but today 1000$ was less then 1350 bosnian marks.

If it will go further down I will basicly lose more money for nothing,
if it will raise I will get more money.

I am thinking to convert all to my local currencies or euros while dollar did not dropped more.

Probably this drop cause nothing in USA. But imagine how money you losing if you have 10k $ and you live in foreign country.

For example I remember when I started receivng Google check dollar was double stronger then bosnian marks. Now its only 1.3 time stronger and I can buy less for 100$ then year ago.

Any suggestions?

My guess as to why the US dollar is dropping in value would be
1) US budget deficit which is the amount of money the government has to borrow to cover its enormous amount of spending on bailouts and whatever else they like to do.
2) US trade gap which is the amount of trades that goes on between the US and the rest of the world.
3) US economy is just not strong right now and I believe the US dollar is based on what could be called the honor system rather than directly reflected to the amount of gold. So the less trust people have in US economy the less people would honor the strength of US currency

It's all a phase. You just gotta wait until you'll get a confirmed news how the world's gonna change

Currency exchange rates are frighteningly complex.

The talking heads on the news are talking about how the stronger U.S. economy is lowering the value of the dollar, while totally ignoring the increases in the U.S. money supply.

The current value of the dollar (in Euros) is 0.702493853. This is lower than it was in the Winter, but not near it's March 2008 low of 0.55146. Of course, back in 2000 and 2001 there were times when a dollar would buy 1.17 euros!

2007

January 0.76904
February 0.76392
March 0.75486
April 0.74
May 0.73983
June 0.74523
July 0.72865
August 0.73424
September 0.7187
October 0.70269
November 0.68124
December 0.68729

2008

January 0.6501
February 0.6777
March 0.55146
April 0.6346
May 0.55432
June 0.64237
July 0.63432
August 0.66887
September 0.6964
October 0.75306
November 0.78513
December 0.74024

2009

January 0.75315
February 0.78111
March 0.76559
April 0.75773
May 0.73182
June 0.71346
July 0.70995

I suspect that the value of the dollar (in Euros) will keep falling for some time, but currency trading is so unimaginably complex that even full-time traders routinely lose money at it.

The USD's value against the NZD has been creeping up quite a bit, recently.

Originally Posted by Hellas

Is anyone more experienced with this. Why is dollar falling? Will it raise again?

The value of the dollar is falling because the USA is losing its manufacturing base. All of the factories are being sent overseas to China and other low wage countries.

The dollar is backed up by what is called the "Gross Domestic Product" - or a sum of what the USA produces. Since the USA does not "produce" anything but waste, the dollar is almost worthless.

In the long run, I seriously doubt that the dollar will increase in value. And if it does, it will be an artificial increase. Meaning that some rich nation that actually produces something will have to under write the debt of the USA.

The only way to turn this around will to end free trade. Close the factories in China and bring them back to the USA. Or, set a tariff on imported goods.

Today's situation is somehow okay, when compared to February 2008, when the dollar was on it's lowest level. For me, it sucks when I have to cash AdSense checks, I earn less. But it's good when I buy something, because I pay less.

Thanks to your comments guys, I just went to bank and converted all my foreign money to euros according to today exchange rates.

another factor is that investors are again willing to bet on equities/investments in emerging markets and thus are pulling money out of "safer US assets" and going back to "riskier emerging markets" like Russia, India etc.

at the peak of the liquidity crises in Oct-Nov 2008, most analysts were of the opinion that US was the epicenter of the crises and so the US dollar would be the worst hit.

actually, the US$ had strengthened and peaked during October-November 2008.

the reason was the US investments abroad were encashed and brought back to US.

the reverse of it is happening now and thus the weakness in US$.

USD/EUR Currency Conversion Chart - Yahoo! Finance

Guys, I can identify with you. This has been among my biggest worries for months as someone who subscribes to austrian economics and believes that USD will not only fall, but completely collapse. This is possibly an unpopular view because it is so hard to imagine, but don't take it from me. Listen to any [ame="http://en.wikipedia.org/wiki/Austrian_economist"]austrian economists[/ame], the most famous of whom are Ron Paul and Peter Schiff. Those were the guys who were at the start of this crisis famed for predicting this crisis and almost exactly the way it's gonna happen.

They're saying the dollar's days are numbered. And just recently I've been linked this: "U.S. Dollar Collapse Starting Next Monday?" written on July 31st according to which USD is apparently hanging by a thread above the abyss and it's just a matter of time before it free falls. Monday, of course, passed, but the point wasn't to make a specific day prediction, but to illustrate the possibility of it collapsing anywhere from tommorrow to few months from now, that in any case, it's pretty inevitable.

The reason I believe this is possible is simple. Some of you guys say dollar is backed by GDP, production etc. and I can see why that may seem to make sense, but the dollar itself are just numbers (not even all printed on paper, but numbers in computers) which are backed by absolutely nothing! No gold, no silver, just faith! The entire monetary system based entirely on faith.

The value of a single dollar is also dependent on solely the amount of the single dollar units in existence in the market. So if government does what they did in recent months, print trillions upon trillions of new money and inject it into the system - it obviously means a single dollar is gonna be worht far less.

That's not all though. The crisis has actually helped the dollar because it caused deflation as people spending less, less dollar units were circulating in the market and thus the dollar rose up. If Obama and Bush didn't print up trillions, dollar would probably be a bunch stronger today, possibly having the biggest rebound in decades! Unfortunately, they didn't. However, their trillions didn't manage to tank it all.. their inflation was met with market's deflation causing the current state of things.

And here's the catch. They're talking about coming out of recession now which to the governments and media equals to "more credit flow". See what this means? More credit flow means more loans and more dollars floating around the market. It means getting back to the pre-recession status to an extent, except this time there's trillions of government printed money to add. BOOM. Dollar crashes to hell. This is too many dollars for a single one to have any worth.

This is why it's inevitable. It's impossible to get out of this recession without the dollar collapse! US government has stupidly made sure of it.

What I'd like to ask all you fellow net builders caught victim in this stupid game of theirs, especially those outside of US like me is this: What will you do if the value of US dollar goes to the same level or below your local currency? I think you all know what that means. TO me it means I can't make a living anymore unless I successfully charge people a lot more dollars (5 times what I charge now) which is probably gonna scare away my US customers and tank my business). I'm honestly curious about this, what do you plan to do?

Thank you!