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Read this urgently if you have savings in US Dollars


londonbear
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If you have any amounts of savings sitting in dollar accounts or in US dollar shares, liquidate them today and move them to non-dollar investments.

 

These could either be in Euro or sterling accounts, Yen investments or tangibles such as gold and diamonds. Take advice on the best market for you from your advisor but move out of dollars NOW.

 

This is not idle speculation but based on market information that the dollar will be stable for a very short while but then decline by around 30% very soon. Currency markets have been waiting to see if Bush is re-elected, with the consequent likelihood that both the current account and Government deficits will continue and probably grow. The current rates are $1 = £0.5441 or Euro 0.788

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i would be surprised to see a 30% fall; the europeans are having a hard enough time exporting to the united states at the current rates yet alone the one you suggest. look for the european governments to try to support the dollar as they urgently need a stronger one.

 

the big question in the currency markets is what will china do. china is rapidly becoming the world's greatest superpower. i travel there on business and each trip i am amazed at the progress and growth i see; it is a country of proud people on the march. china's interest rate and curency exchange rate are of primary importance in today's world.

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I have lived long enough to see rapid cuurency realignments and how they affect pople's behaviour. First, most people are blissfully ignorant of such movements and are not directly affected since they don't have DIRECT international exposure to their savings or spending. Of, course they are indirectly affected but this takes time for them to perceive the differences.

 

However, for those that do have money invested abroad, currency changes DO MATTER. In the last two years, the Canadian dollar has apppreciated over 25% against the US$. This is significant and in light of the change, I started liquidating my US share holdings over a year ago and finally sold my last US shares (General Electric) a month or so ago. I was reluctant to sell as some of these investments had done quite nicely in the last year or so (in US$ terms) but in Canadian dollar terms, they were getting hammered. And looking down the road, all I could see were US deficits growing larger and larger and Canadian surpluses doing the same. So it was a no-brainer.

 

At some point, things will reverse. But until then I agree, get out of the US$.

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This is probably good advice for non-Americans, and for Americans who live abroad or have significant foreign expenses. For the average American, a big drop in the value of the dollar won't make much difference except that they'll notice that the price of imported goods rises and it'll be even more expensive to visit Europe or Japan. A drop in the value of the dollar would not be an entirely bad thing, of course. It makes American products cheaper abroad, stimulating production (and employment) in export-related sectors of the economy, as well as those sectors that begin replacing more expensive foreign goods with domestically-produced ones.

 

For those whose foreign exchange dealings are mainly with Brazil, it may make little difference, too. Changes in value between the dollar and euro/yen are not closely followed by the dollar - real exchange rate. Even though the dollar has weakened significantly against the euro in the past couple of years, the dollar has remained relatively strong against the real and the Argentine peso. I'm not entirely clear why this is, but it's been the case for quite some time now.

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If the dollar has remained relatively stable versus the real, then the Euro must have appreciated. This would make Brazil even less expensive for Europeans. I remember a few years ago when the Euro was around $.86US and even affluent Europeans were groaning about prices in Florida and New York, where gay Europeans like to play. Now it's around $1.17US or so. It really does make a difference.

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Yeah, but you'd better be sure that the NZ dollar isn't going to plunge, too! It's been a fairly weak currency in the past few years. If you're going to try to protect your savings, you should just bite the bullet and get into euros, since it's the currency that will most likely appreciate against the dollar.

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  • 2 months later...

$$ Doom for the Dollar $$

 

By DAN ACKMAN - Forbes

January 14, 2005

 

NEW YORK - The stock market is up and economic growth has been steady, if unspectacular. But, an increasing number of economists are seeing serious storms build on the horizon. They point to ever-growing federal budget deficits, a record current-account deficit, increased consumer debt, a real estate market that looks like a bubble ready to burst, a surge in personal bankruptcies and the prospect of inflation.

 

Meanwhile, interest rates are on the rise, and if they increase much more, many of these problems could get dramatically worse.

 

Doomsayers tend to be ignored--until it's too late. This week, we give voice to five prophets of doom, starting with Peter Schiff, CEO and chief global strategist of Euro Pacific Capital.

 

Could the falling dollar mean we're in for a major financial disaster? He thinks so--and he says the thing to do is get out of the dollar. That means selling U.S. stocks and even real estate and putting your money into non-dollar investments.

 

He has been warning about the currency's fall for a while now. Even though it lost a third of its value in the last two years against the euro, he believes it will decline even further. But, the dollar's fall is more a symptom than a cause. The real problem is that the U.S. is producing too little--and spending too much--and the result is likely to be far worse than the happy-talkers on Wall Street will ever let on.

 

"We are going to go through one of the most trying financial times in U.S. history, including the Great Depression," Schiff says.

 

Why Should We Care About The Falling Dollar?

 

"The basic problem," Schiff states, "is that Americans don't produce enough, and don't save enough." Indeed, over the past 15 years, the savings rate has fallen from over 6% to less than 1% in recent quarters. As a result, the goods that we are consuming are being supplied to us by foreigners. Not only are they producing the goods, but they are lending us the money to buy them, and, in doing so, are driving the U.S. deeper and deeper into debt to the rest of the world, Schiff says.

 

As American industry has lost productive capacity, it has become increasingly difficult for the U.S. to produce enough--and sell enough--to reduce that debt. The massive U.S. trade and current-account deficits, now at around 6% of the gross domestic product, mean that non-Americans are exchanging consumer goods today for consumer goods they will obtain in the future.

 

The U.S. doesn't have the ability to supply those goods, Schiff says. "We are using dollars that we print to exchange for goods that we don't produce. We have to borrow from abroad as there are no domestic sources of savings, so the value of those dollars will continue to fall."

 

How Bad Will It Get?

 

Peter Schiff, chief executive of Euro Pacific Capital

 

"Very bad," Schiff says. The dollar will fall a lot lower than it already has--dropping by perhaps 50% against the Japanese and Chinese currencies. How will the government respond? Could efforts to forestall the currency decline have a perverse--and ultimately negative--effect? No matter what the outcome, Americans will have to consume a lot less and save a lot more. Spending on cars, clothing and electronics will all drop dramatically--perhaps right out of the economy.

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  • 1 year later...

RE: $$ Doom for the Dollar $$

 

The Sunday Times April 30, 2006

 

Dollar starts the big slide against major currencies

DAVID SMITH, ECONOMICS EDITOR

THE dollar has embarked on a big decline that will see it fall against all leading currencies, according to analysts.

 

The plunge is being prompted by America’s $800 billion (£438 billion) current-account deficit, they say.

 

The dollar has been under pressure following last weekend’s meeting of G7 finance ministers and central bankers, which emphasised “global imbalances” and said currencies should reflect economic fundamentals. Then China raised its key interest rate to 5.85%, its first hike for months, and Ben Bernanke, the new Federal Reserve chairman, hinted that American rates would pause at 5% after a rise in May.

 

http://www.timesonline.co.uk/article/0,,2095-2157799,00.html

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RE: $$ Doom for the Dollar $$

 

The dollar is hardly doing well here in Brazil, a country whose currency seems artificially strong. On Friday the dollar sank through the R$2,10 barrier, closing at R$2,08 -- the lowest in more than five years. The way things are going, it could go lower still (even though Brazil is plagued by massive government corruption scandals and considerable uncertainty about the political/economic direction of the new government to be elected in October, as well as the prospect of falling interest rates). Fasten your seatbelts, fellow Yanks. It's gonna be a bumpy ride. . . :-(

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  • 7 months later...

RE: $$ Doom for the Dollar $$

 

Hard landing fears hit dollar

 

By Peter Garnham and Christopher Brown-Humes in London and Krishna Guha in Washington Financial Times 12/1/06

 

The dollar fell further on Friday as weak US economic data heightened investor fears that the country’s economy could be heading for a hard landing.

 

The latest sell-off, which was particularly sharp against the euro and sterling, came after data suggested US manufacturing contracted for the first time in 3½ years in November.

 

The US currency fell as much as 0.8 per cent to a new 20-month low of $1.3348 against the euro and 1 per cent to $1.9847 against the pound, a new 14-year trough.

 

http://www.ft.com/cms/s/fcee46b0-816e-11db-864e-0000779e2340.html

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  • 9 months later...

RE: $$ Doom for the Dollar $$

 

FRANKFURT, Germany (AP) -- The dollar briefly fell to another low against the euro Friday in European trading before regaining some ground.

 

Breaking above $1.41 for the first time, the euro went as high as $1.4119 in morning trading in Europe. The shared currency of the 13-nation euro zone later slipped to $1.4056, below the $1.4076 it bought in late New York trading Thursday.

 

The dollar rose to 0.9999 Canadian dollars, up from 0.9993 on Thursday when it reached one-to-one parity with the loonie for the first time since November 1976

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RE: $$ Doom for the Dollar $$

 

The handwriting has been on the wall for quite some time now for the US dollar as this thread demonstrates. As Alan Greenspan now says (why he didn't speak up earlier is strange) the Republicans have pursued a very unlikely (for them) strategy of big deficits and high spending while pursuing tax cuts and waging expensive wars, all of which is leading to unsustainable deficits. As they say, somethings gotta give!

 

Of course, Greenspan is not fessing up to having kept interest rates too low for too long after 9/11 which has now led to a housing crisis and credit crunch that appears to be spreading (the crunch part at least) worldwide. Given the rise of hedge funds and the integration of world financial markets, no-one is really immune from these sorts of imbalances but there are always winners and losers in any dynamic situation so experiences will vary!

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RE: $$ Doom for the Dollar $$

 

>The dollar is hardly doing well here in Brazil, a country

>whose currency seems artificially strong. On Friday the

>dollar sank through the R$2,10 barrier, closing at R$2,08 --

>the lowest in more than five years. Fasten your seatbelts, fellow

>Yanks. It's gonna be a bumpy ride. . . :-(

 

I remember just 3 years ago it was 3:1. Glad I took londbear's advice!

Current rate:

 

 

Brazilian Real: 1 USD = 1.862

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  • 2 weeks later...

RE: $$ Doom for the Dollar $$

 

Qatar & Vietnam ditch the dollar

 

Announcements on Thursday from the Qatari and Vietnamese governments that they are rapidly divesting in dollar denominated securities will not come as good news to the US government. Overseas investors hold half of America’s $4,400bn of marketable government debt, up from a third in 2001 according to the US Treasury department.

 

Qatari Prime Minister, Sheikh Hamad bin Jassim bin Jabr al-Thani said on US TV that the government-backed $50bn Qatari Investment Authority (QIA) now had less than 40 per cent of its investments in dollars, down from a high two years ago of 99 per cent.

 

Given that the Emirate’s oil and gas revenue is in dollars, the latest troubles in the US economy have accelerated the need to diversify investments into non-dollar markets. Currencies such as the Euro, the British Pound and the Swiss Frank, are all looking far more stable as investments for the QIA, said Sheikh Hamad.

 

Such was the Qatari PM’s concern about the sliding dollar, that he even said an oil price of $125 per barrel would not be unreasonable.

 

On Thursday, the State Bank of Vietnam quietly let slip it would be ending its dollar purchase schemes, which it has been using to hold down the Vietnamese currency. Although it only has middling dollar reserves of $40bn, Vietnam is widely regarded as a barometer for economic sentiment among other, bigger, regional dollar sinks like China, Taiwan, Korea or Singapore. Hans Redeker, currency chief at BNP Paribas, told the Telegraph:

 

Vietnam is a relatively small country but it is symptomatic of Asia. The entire region is seeing inflation move up as a result of mercantilist policies of holding down their currencies with ‘dirty floats’, which are designed to help their export sectors. They need to change monetary policy.

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  • 2 weeks later...

IMF says dollar ‘overvalued’

 

By Chris Giles in London

 

Published: October 17 2007 14:00 | Last updated: October 17 2007 14:00

 

Currency traders were given a green light to continue selling the US dollar on Wednesday, as the International Monetary Fund said the greenback “remains overvalued” and rejected claims the euro had risen too far.

 

Contradicting Rodrigo Rato, the outgoing IMF managing director, who last week said “right now the dollar is undervalued”, the fund’s staff conclude the dollar is still too high. The multilateral lender also forecast slower growth in 2008 at 4.75 per cent, compared with 5.2 per cent expected this year.

 

The IMF’s new stance on the dollar will counter the arguments to the contrary made by France and some other eurozone members at this weekend’s meetings of the Group of Seven leading economies and the IMF’s governing body. They have been urging a change in language to temper the fall in the dollar, which dropped by more than 4 per cent against the euro in September alone.

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THere are also high level talks between Mexico, the US and Canada about making a North American version of the Euro. From what I gather Bush has been the leader in the push for it, and of course our "follow the president" priminister we have in Canada here is in support of it.

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Guest zipperzone

>and

>of course our "follow the president" priminister we have in

>Canada here is in support of it.

 

What else can you expect from someone who has shit for brains?

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  • 5 weeks later...

The continuing slide of U$D...

 

Rappers are showing the Euro in their videos, and now this from India:

 

Dollar no longer welcome at Taj Mahal

By Andrew Buncombe in Delhi

Published: 19 November 2007

 

The Taj Mahal may have been built as a testament to love but some hard-headed business decisions are now holding sway at India's most famous monument. First among them is that the US dollar is no longer welcome.

 

With parts of the American economy in turmoil and the dollar rapidly losing its long-held position as the currency of choice, Indian authorities have calculated they are losing considerable sums of money by allowing foreign tourists to pay using greenbacks.

 

A statement by India's Ministry for Tourism and Culture said the government had decided to act "in view of the international practices and also to avoid any anomaly on account of falling exchange rates of the US dollar vis-a-vis the rupee and the consequent fall in revenues".

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