The Decline of the US Dollar

[bean]

Re: The Death of the Dollar

One thing a declining US$ must be hurting a few other markets as there currencies are stronger.
The exporters??
Japan are they heading for a resession thank to the US$.
We are ready to have a rise in interest rates?
We will soon be 1:1
A weaker US$ is actually stuffing the worlds economy?

 

[reece55]

Re: The Death of the Dollar

This is a hilarious must read.....

Wayne, I'm thinking you will just love this one.....

Cheers
Reece

>> Link <<

 

[explod]

Re: The Death of the Dollar

This is a hilarious must read.....

Wayne, I'm thinking you will just love this one.....

Cheers
Reece

>> Link <<

Sounds close to the mark, maybe it was a phone tap. Laughing or crying probably wont' make much difference anyway. Dollar seems to have settled tonight so who knows, Benarke may have ruminated things back on track

 

[Aussiejeff]

Re: The Death of the Dollar

Sounds close to the mark, maybe it was a phone tap. Laughing or crying probably wont' make much difference anyway. Dollar seems to have settled tonight so who knows, Benarke may have ruminated things back on track

Nope. His "ruminations" have now developed an ominous "rumbling" ... best prepare for something unpalatable to spew forth soon...




AJ

 

[BradK]

This is from the UK Independent. Front page story.

The dollar's decline: from symbol of hegemony to shunned currency
By Andy McSmith
Published: 17 November 2007


The decline of the dollar, symbol of US global hegemony for the best part of a century, may have become so entrenched that some experts now fear it is irreversible.

After months of huge and sustained turmoil on the money markets, lack of confidence in the world's totemic currency has become so widespread that an increasing number of international traders are transferring their wealth to stronger currencies such as the euro, which recently hit its highest level against the dollar.

"An American businessman over here who is given the choice would take anything but the dollar," David Buik of Cantor Index said yesterday. "I would want to be paid in yen, and if not yen then the euro or sterling."

Matthew Osborne, of Armstrong International, added: "The majority would say sterling. There are a few dealers in the City who may take the view that they'll take dollars now, while they're cheap, and hold on to them for 12 months.

"But the problem is so serious that there are people who in July or August might have been thinking, 'I'm paid in dollars, how annoying' for whom it's now a question of, 'Do you have a job; do you have a bonus?' "

The collapse of the sub-prime mortgage market in the US, which is fuelling the dollar unrest, has already brought down one British bank, Northern Rock, and has forced others to declare vast losses. Yesterday, just as it appeared that the dollar might have finally reached its floor, there was another warning that the sub-prime crisis is going to get worse. The US Treasury Secretary Henry Paulson, warned an international business summit in South Africa: "The sub-prime market, parts of it will get worse before it gets better." Huge numbers of US homeowners are still cushioned by introductory interest rates set when they took out loans in 2005 or 2006, he said. When these introductory offers run out, their interest payments will increase, setting off another wave of defaulting and repossessions. And the dollar is enduring its rockiest spell in recent memory.

Kenneth Froot, a Harvard university professor and former consultant to the US Federal Reserve, warned yesterday: "Part of the depreciation [of the dollar] is permanent. There is no doubt that the dollar must sink against periphery currencies to reflect their increase in competitiveness and productivity."

Professor Riordan Roett, of Johns Hopkins University in Baltimore, told Bloomberg News: "There is a loss of confidence in the dollar and the US. It may only reflect the widespread dismay with the Bush administration, but it is obvious that the next administration, of either party, will have a steep uphill struggle." As well as reaching its lowest level against the euro, which has been trading at more than $1.47, the dollar has also fallen to its lowest level against the Canadian dollar since 1950, sterling since 1981, and the Swiss franc since 1995.

Its plight was made still worse by a jarring signal from China that it was switching to other currencies. Cheng Siwei, vice-chairman of the Standing Committee of the National People's Congress, told a conference in Beijing: "We will favour stronger currencies over weaker ones, and will readjust accordingly."

The warning was reinforced by a Chinese central bank vice-director, Xu Jian, who said the dollar was "losing its status as the world currency".

China has stockpiled £700bn worth of foreign currency, and has only to decide to slow its accumulation of dollars to weaken the currency further. Last month, in a humiliating turn of events, the central bank in Iraq, four years after the United States invaded, stated that it wished to diversify reserves from a reliance on dollars.

Korea's central bank has urged shipbuilders to issue invoices in the local currency and take precautions against the weakened dollar, and three of the world's big oil exporters, Iran, Venezuela, and Russia, are demanding payment in euros rather than dollars. Iran insisted that Japan should make all its payments for oil in yen, rather than dollars.

Warren Buffet, who is reputedly the richest man in the world, was asked on the US network CNBC last month what he thought was the best currency in the world to own now. He answered: "Not the US dollar."

The Wall Street Journal ran an online poll asking people which currency, they would prefer to be paid in. The euro came top, ahead of sterling, with others such as the Canadian dollar, yen and Swiss franc trailing far behind. One respondent wrote: "Being an expat in Europe with a European employment contract, I am paid in euros, and happy to get paid in euros, and shop in the US, just as long as the cycle lasts through my retirement, so I can pick up pension in Europe and retire in the US."

The Federal Reserve has cut interest rates twice since September to revive the US economy, but the cuts – combined with the possibility that more were on the way – made the dollar less attractive to investors. Yesterday, it recovered slightly when one Federal Reserve banker, Randall Kroszner, dampened speculation about further interest rate cuts, saying that rates were low enough to get the economy through a "rough patch".

Problems with the greenback, combined with cheap air fares, have encouraged more Britons to go shopping across the Atlantic. British tourists spent £785m in New York last year, the city's marketing and tourism organisation said yesterday. There were 1,169,000 visitors to New York from the UK in 2006, with 54 per cent going for four to seven nights and 31 per cent staying for two to three nights. They spent an average of £112 a day. The average age of the UK visitor is 40.

Christopher Heywood, director of tourism PR for NYC & Company, said he expected the dollar crisis to attract yet more British shoppers. "The savvy traveller who's coming here for the shopping can really get a bargain. They're coming with one suitcase and leaving with two or three," he said.

"We have people coming over here even for weekend trips to shop for the famous brand names. People are coming for the department stores that everyone around the world knows, but also for the boutique stores out of the centre of Manhattan, anything from Madison Avenue and Fifth Avenue to Bleecker Street in the West Village and SoHo."

 

[BradK]

And the decline of the Dollar in Popular Culture.

Rappers join models in insisting on euros as greenbacks fall further out of fashion

David Usborne in New York
Published: 17 November 2007

Pay attention as you watch the catchy new music video from the mega-star rapster Jay-Z, "Blue Magic", and see if you can't spot the product placement. It is not a fancy car that he is endorsing – although both his rides, a Rolls- Royce and soft-top Bentley, are plenty spiffy – but rather a currency – and it is not the dollar.

Like so many in the hip-hop genre, the song is a celebration of ostentatious wealth. But capturing the attention of commentators in this clip, shot in the glimmering, neon-lit canyons of New York City, are the repeated glimpses of flickering wads of €500 notes. Jay-Z has thus performed a currency defection: the dollar is not just down, it is out. The euro is the new bling.

It is only a music video, but Jay-Z, whose influence on pop culture is immense, may, wittingly or otherwise, be bringing America to what some pundits call the "point of recognition" – the moment when the droop of the dollar against other currencies ceases to be the preoccupation only of economists and American tourists in Paris, and enters the popular zeitgeist as a new and unsettling reality.

He is not, as it happens, the only celebrity imparting the new currency wisdom. Chatter about his video comes on the heels of reports that Gisele Bundchen, the world's richest model, is asking that payment for her numerous advertising gigs be in euros. While her manager has since denied any such stipulation exists in Bundchen's contracts, the message is nonetheless compounded: the dollar is out of fashion.

Even the Wu-Tang Clan, another power on the rapping scene, is daring to diss the dollar. Never mind that they coined the catchphrase of conspicuous consumption, "dolla dolla bill, y'all"' - click on their official website and inquire about buying their new album. It is priced not in greenbacks, but in euros.

The downward spiral of the dollar is hardly new, even if its plight was accelerated by the start of the housing credit crunch over the summer. It has lost 44 per cent of its value against the euro since 2002. The Canadian dollar reached parity with its American cousin in September and has since shot above it. But awareness on Main Street America may be lagging behind. Listen to presidential candidates take questions on the stump in Iowa and New Hampshire and still you will hear nary a question about it. Americans have been accustomed for so long to thinking of the dollar as reigning supreme and unassailable, that the reality will take time to sink in.

"It's ignorance and arrogance," commented Clyde Prestowitz, of the Economic Strategy Institute. "The candidates, the voters, the country's elite – they all take it for granted that the US currency is always going to be the world's currency. It hasn't hit them yet."

But Jay-Z has given the dollar's slow demise visuals and a soundtrack, while Bundchen has given it a sexy face. Now Americans, reluctant as they may be, might start to pay attention.

James Cramer, a financial commentator and television host, even blamed Bundchen. He has since back-tracked, but not entirely. "Is Gisele really to blame? No," he said. "But when things have gotten to the point that even people like Gisele and Jay-Z realise the dollar is too weak, things have gotten out of control."

 

[Rafa]

This could possibly be posted in many threads, including 'Iraq was about oil' and 'The Middle East and Western Asia: origin of the next world war'...


http://www.smh.com.au/articles/2007/11/19/1195321650487.html?sssdmh=dm16.289727

OPEC members discuss ditching $US

Iranian President Mahmoud Ahmadinejad says OPEC's member countries have expressed interest in converting their cash reserves into a currency other than the depreciating US dollar, which he called a "worthless piece of paper."

His comments at the end of a rare OPEC summit exposed fissures within the 13-member oil cartel - especially after US ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit's final declaration.

The hardline Iranian leader's comments also highlighted the growing challenge that Saudi Arabia, the world's largest oil producer, faces from Iran and its ally Venezuela within the Organisation of Petroleum Exporting Countries.

"They get our oil and give us a worthless piece of paper," Ahmadinejad told reporters after the close of the summit in the Saudi capital, Riyadh.

He blamed US President George W Bush's policies for the decline of the dollar and its negative effect on other countries.

"All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency," Ahmadinejad said.

"Some said producing countries should designate a single hard currency aside from the US dollar ... to form the basis of our oil trade."

Venezuelan President Hugo Chavez echoed this sentiment on the sidelines of the summit, saying "the empire of the dollar has to end".

"Don't you see how the dollar has been in free-fall without a parachute?" Chavez said, calling the euro a better option.

Saudi Arabia's King Abdullah had tried to direct the focus of the summit toward studying the effect of the oil industry on the environment, but he continuously faced challenges from Ahmadinejad and Chavez.

Iran and Venezuela have proposed trading oil in a basket of currencies to replace the historic link to the dollar, but they had not been able to generate support from enough fellow OPEC members - many of whom, including Saudi Arabia, are staunch US allies.

Both Iran and Venezuela have antagonistic relationships with the US, suggesting their proposals may have a political motivation as well.

While Tehran has been in a standoff with Washington over its nuclear program, left-wing Chavez is a bitter antagonist of Bush.

US sanctions on Iran also have made it increasingly difficult for the country to do business in dollars.

During Chavez's opening address to the summit on Saturday, the Venezuelan leader said that OPEC should "assert itself as an active political agent".

But Abdullah appeared to distance himself from Chavez's comments, saying OPEC always acted moderately and wisely.

A day earlier, Saudi Arabia opposed a move by Iran on Friday to have OPEC include concerns over the falling dollar included in the summit's closing statement.

Saudi Arabia's foreign minister warned that even talking publicly about the currency's decline could further hurt its value.

But by Sunday, it appeared that Saudi Arabia had compromised. Though the final declaration did not specifically mention concern over the weak dollar, the organisation directed its finance ministers to study the issue.

OPEC will "study ways and means of enhancing financial cooperation among OPEC ... including proposals by some of the heads of state and governments in their statements to the summit," OPEC Secretary General Abdalla Salem el-Badri said, reading the statement.

Iran's oil minister went a step further and said OPEC would form a committee to study the dollar's affect on oil prices and investigate the possibility of a currency basket.

Oil is priced in US dollars on the world market, and the currency's depreciation has concerned oil producers because it has contributed to rising crude prices and has eroded the value of their dollar reserves.

Cartel officials have resisted pressure to increase oil production to ease prices.

The OPEC summit closed on Sunday in Saudi Arabia, with heads of states and delegates from 13 of the world's biggest oil-producing nations.

King Abdullah tried to take the focus off the dollar debate, announcing the donation of $US300 million ($A339.16 million) to set up a program to study the effect of the oil industry on the environment.

Kuwait, Qatar and the United Arab Emirates also agreed to donate $US150 million ($A169.58 million) each to the fund, Saudi foreign minister Prince Saud Al-Faisal said.

 

[wayneL]

 

[Aussiejeff]

wayneL, now look at moi, look at moi...! I've got one word to say to you...

"Priceless"





AJ

PS: Hark! Is that a Eurobird I hear in the distance, twittering "Burn baby, BURN!" LOL

 

[explod]

wayneL, now look at moi, look at moi...! I've got one word to say to you...

"Priceless"





AJ

PS: Hark! Is that a Eurobird I hear in the distance, twittering "Burn baby, BURN!" LOL

Well Big Chief Burnin Bush been jawbonin this week so maybe his feathers caught fire from your nice rubber band plane and de market got to follow the flame on Thursday. Seemed to go out quick though.

Arr well, maybe we could do a deal with the cavallery and burn the middle east a bit. They sit up an look at that.

 

[explod]

Well Big Chief Burnin Bush been jawbonin this week so maybe his feathers caught fire from your nice rubber band plane and de market got to follow the flame on Thursday. Seemed to go out quick though.

Arr well, maybe we could do a deal with the cavallery and burn the middle east a bit. They sit up an look at that.

Looks like they got a bit rattled. Their Index down 1.2% today. Got to be some fireworks of sorts tonight.

I bet Big Chief's Staff Officer being tapped on de shoulder inna de tee pee as we speak.

 

[Kauri]

Reuters,,,,Reports on Saturday said that Bush plans to meet Monday with his advisory panel on financial markets - which includes Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson - after the Fed had to step in to keep Bear Stearns afloat. Dow Jones reports that it is unlikely that Bush will back any dramatic action to help the US economy after the markets were unnerved on Friday due to the growing credit crunch that almost claimed its biggest victim yet on Friday. Dow Jones notes that in Bush"s weekly radio address on Saturday he said the federal government must guard against going too far in trying to fix the troubled economy, cautioning that "one of the worst things you can do is overcorrect." Bush said "it is clear that growth has slowed," but said the recently passed program of tax rebates would lift the economy in the second quarter. He also warned that "If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse.""Steering through a rough patch requires a steady hand on the wheel and your eyes up on the horizon. And that's exactly what we're going to do," the president added. In response, Senate Majority Leader Henry Reid, D-Nev., said in a written statement, "The president continues to convince himself that inaction is the cure-all for the economic problems hurting hardworking Americans."

 

[Aussiejeff]

"Steering through a rough patch requires a steady hand on the wheel and your eyes up on the horizon.

Ahhhh! Such wise words from The Ultimate Master of the succinct, yet philosophically deep quote...

The US is saved!