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US$$ or Euro??


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Any input is appreciated. I think we have seen most corrections doing it's run, like the AUD$$ is pretty much exhausted now, the Euro can't gain any more ground against the US$$ cause most people are long anyway, so my reversal theory just plain says:

 

 

"Out of the Euro, into the US$$"

 

 

./

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Jack_be_nimble

A few years back, I would have had 100% confidence in the USD, but I'm not so sure now, considering all of the taxpayer funded and $$$ printing for bailouts. The Feds will have to print a ton of dough to cover this and, most likely, future bailouts, etc. Recently, our Senate blocked a House bill to audit The Federal Reserve. This makes me nervous. I wonder what our foreign creditors are collectively thinking these days.

But, still, the dollar is still holding it's strength against the peso.

 

Jack

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All-Or-Nothing

I've lost a lot of confidence in the US dollar over the years but it's hanging on.

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* US Gross Debt 2008 10,024.7bn 72.5% of GDP (EST) (US Debt)

* Japan National Debt 194% of GDP 2008 est) 836,521 trillion yen 2007

* Italy National Debt 107% of GDP (FT)

* UK National Debt 43% of GDP (UK)

 

Note: Japan

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JohnFromTexas

I'm not sure those figures on UK debt are accurate -- last I heard they were now at or about 100% plus of GDP because of their own public expenditures to fend off the recession and inability to balance the budget. I hate what is going on in the US here now in terms of fiscal responsibility -- pretty much exactly what I was worried would happen if the O-meister got elected. Apparently he has no idea what the term 'fiscal responsibility' means :kidding: Not that the other side is great, but at least better in terms of fiscal policy.

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I don't think the Australian dollars run has ended yet. The economy has survived the recession quite well, Chinese demand for raw materials is on the rise again and most importantly for the strength of the dollar the wild spending by the government on handouts means interest rates are on the rise again with 2 rises forecast before the end of the year.

 

In my businesses we switched from doing business in USD to Euros about 18 months ago. I am now taking advice on whether we should go back to US again and it would seem that the opinion is stay in Euros. We shall see.

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I'm not sure those figures on UK debt are accurate -- last I heard they were now at or about 100% plus of GDP because of their own public expenditures to fend off the recession and inability to balance the budget. I hate what is going on in the US here now in terms of fiscal responsibility -- pretty much exactly what I was worried would happen if the O-meister got elected. Apparently he has no idea what the term 'fiscal responsibility' means ;) Not that the other side is great, but at least better in terms of fiscal policy.

 

I think the UK figure for 2007 was accurate.

 

However 2009 will see UK moving rapidly in the wrong direction.

 

I like Norwegian Kronor; and STO is an easy way to get some.

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GoneAsiatic

I like the Canadian loonie because that country is rich in natural resources. Although things may be a little depressed now because the U.S. is their biggest trading partner, sooner or later the U.S. consumer will begin spending again. Old habits are hard to change.

 

Although the economic situation in Europe is somewhat grim, the sheer force of so many countries adopting the euro should cause it to eventually rise. Still, I like the Canadian dollar best. Canada has not yet anyway begun quantitative easing.

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Funny how everybody goes with the current flow. Remember, the US$$ has been talked down to the excess now and not much happening anymore. The AUD$$ has been talked up so much over the recent months, same there. Most natural resources in Canada are owned by US corporations BTW.

 

./

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I tend to look long term. I know many of you trade investments on a regular basis, maybe even daily. That's not what I'm talking about here.

The way things are going I think the dollar will have to be allowed to depreciate. The only other choice is to raise interest rates on US bonds which would transfer into the consumer market and cost someone re-election. Can't have that.

I doubt depreciation would happen overnight. More likely is a slow, controlled drop over a period of years. Since the "crash" many equity holders moved into dollars which is why it's done so well. Even now there's a back a forth pattern; stocks up, dollar down, stocks down, dollar up. This may go on a little while longer but eventually we're likely to see a slow, steady decline in the dollar.

Does that mean another currency will gain steadily against the dollar? Probably not. We live in a world where all currencies are "fiat" and can be controlled to a great extent by central banks. In order to keep exports competitive other nations will depreciate their currency as well. For me the solution seems to be to put cash into the currency you're going to be purchasing in, namely, pesos.

A word of caution: Remember Argentina.

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I think the sentiment is so much against the US$$. People, don't forget the rescue programs were similiar in Europe. On top of that, let's not forget how much the wealthy countries in Europe have been bleeding in order to get all the poor ones up to spiff. That burden and debt is still there, just not properly documented. The old Euro story will have a revival. I think the next crises this coming fall with hit Europe and it's banks very hard. The US did the right thing and played with open cards.

 

./

Edited by scianna54
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I've heard that the economic situation now is a "Once in a Hundred year Global Crisis".

 

I've heard too from TV economist to better stay cool with their cash & beware of stock investments.

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GoneAsiatic
Funny how everybody goes with the current flow. Remember, the US$$ has been talked down to the excess now and not much happening anymore. The AUD$$ has been talked up so much over the recent months, same there. Most natural resources in Canada are owned by US corporations BTW.

 

./

 

Scianna, actually I began anticipating a weak dollar even before the market crashed and adjusted some of my investments then. It did not work too well because I put a lot in European countries, Malaysia (Anybody want to buy some copra?), Chile and China. I sold the European and Chinese investments and began investing in materials, base metals, Ag and other petro commodities in March/April when their prices were low. Some of these companies are based in Canada, and I only know of one that has USA ownership, Thompson Creek Metals. It has operations in both countries. My TSX index ETF has stuff that I don't bother researching.

 

It does not matter to me which country owns a company as long as it has international exposure in an area I like and is earning revenues in the local currencies. So I did buy a lot of U.S. companies that derive a substantial portion of their revenues from their international ops. Coca Cola is an example of one that fits that profile, although I do not own it. Warren Buffet beat me to it and raised the price. Somehow that guy always gets there before I do. I suppose that's why he is a billionaire, and me, I just did into my penny jar and invest for a hobby.

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broden

thinking of converting all my cash in to ramen noodles .. they have real staying power

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Euro is King now!

 

The Saudis are considering quoting oil in Euro, instead of dollars, which is to be decided by 2012.

 

If that happens, say good by to the Dollar, it'll just be another currency.

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