# Why is the US dollar getting weaker?



## sunshineboy (23 June 2009)

Why is the US dollar getting weaker?


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## Underpants Gnome (23 June 2009)

It's not.

Seriously, how about some context? What makes you think it is (what timeframe etc)? Why do _you_ think it might be?


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## caribean (23 June 2009)

I don't know, assuming you are talking about the USD index (NYBOT: DX)


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## MRC & Co (23 June 2009)

Huge trade and budget deficits + QE (Quantatative Easing).  Low relative real interest rates, after risk is taken into account.


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## theasxgorilla (23 June 2009)

MRC & Co said:


> Huge trade and budget deficits + QE (Quantatative Easing).  Low relative real interest rates, after risk is taken into account.




Yes, a massive increase in supply.  Although all things considered it's really not doing too badly.


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## explod (23 June 2009)

Not getting weaker?   a few years back the US$index was around $1.20 to 1.30, today .81


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## MRC & Co (23 June 2009)

theasxgorilla said:


> Although all things considered it's really not doing too badly.




Yeh, the world can't afford a run on the USD.  

But a slow decline must continue IMO.  Over monthly/yearly timeframes.  

Until then, it must stay stable to allow QE, or it becomes too higher risk holding bonds, their value falls and yields rise.


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## Stormin_Norman (23 June 2009)

look at the fed's balance sheet to see why.


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## Gundini (23 June 2009)

They have lost control of their ecomony! Their ponzi scheme has been discovered by the world. Printing money soooo devalues their currency. The golbe is losing confidence.... 

Surely your question is in jest!


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## tasmart (23 June 2009)

I like this article posted today 

http://www.financialsense.com/Market/daily/monday.htm

Opening statement is good:
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“Why do empires wane? They wane because they get excessively indebted and their growth rate slows, especially when their debts are to foreigners. This was the British experience, and the Spanish experience, and the French experience. And the US is there right now. That’s what tends to kill empire.”
~Niall Ferguson, Harvard historian on CNN’s Fareed Zakaria GPS
In these tumultuous times, I prefer historians over economists. Economists, with their malfunctioning models and cozy Wall Street relationships, have been abysmal at economic predictions in recent years.
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The $US has a long way down to go yet.


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## Jason Rogers (25 June 2009)

Thanks for sharing tasmart.

Look at the dominance the pound had in the 1800's, US Dollar in the 1900s, and then 21st century?  The emergence of the Chinese Renminbi seems like a plausible successor, or even a basket of currencies.

Having $1 trillion USD in reserves (China) becomes risky when you don't think the US is managing its finances very well.



tasmart said:


> I like this article posted today
> 
> 
> 
> ...


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