Is the US Dollar dying?

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Is the US Dollar dying?

Scary looking statistics showing the decline in the value of the US dollar over the last year. What does this mean for the future?

Over the last year, as the chart below demonstrates, we have watched the dying dollar make lower lows and lower highs.

The USD occasionally makes a pathetic attempt to break its 200dma, but that has only happened a couple of times over the last year. Indeed, the USD has not been above its 200 day moving average since the 50dma crashed down through the 200dma in early April 2006.

The USD has fallen over two points in the last fortnight or so, and this rate of decline will continue if it breaks the support level at 80.

When the USD was testing this support at the beginning of 2005, it went on a terrific run to 92.63 but somehow we do not think that the dollar will be able to pull another rabbit out the hat as it did then. More and more investors are coming around to the fact that the USD is dead and people do not want to hold this rapidly devaluing paper anymore.

When the USD breaks 80, the whole world will see a big sell signal and this influx of people dumping dollars will send the greenback down into the abyss and its anyone’s guess how far it can fall, but it will fall…a lot.

Much more on site
 http://www.kitco.com/ind/Ki...

dollar-crash.jpg - 41.91kb
By netchicken: posted on 19-7-2007

The dollar has been projected to die for years and usually by people who are selling precious metals.
It'll be a bad day all around if the dollar falls unto itself; a whole bunch of nations have bought up our debt because the U.S. government has proven to be a reliable debtor. A nations such as China rely on the gluttonous purchasing habits of Americans (and, they own a lot of our debt) and Saudis really love our love affair with our automobiles supporting their lavish lifestyle as well as funding their Wahabi jihad against us.

Many fear that when the dollar finally falls it is going to fall hard, and just like a drowning man, its going to drag the rest of the world down with it.
By Thomas_Crowne: posted on 19-7-2007

Well a correction in the $ market is a long time comming plus add to that the sub-prime spill over to Europe. Its actually a good thing for the world economy and America in general. I hope it looses another 5% of its value.

With the Euro and Pound trading strong, there is going to be considerable advantages to the American Economy. Lots of Forex traders are making a killing now with the fall in $. Oil companies are projected to make a killing in $ terms. Already Exxon Mobil has gone up over 1% odd in the last few days. The A$ and the NZ$ are performing massively against the $. Actually a while back there was some arbitrage opportunity with the NZ$ Vs $ where they made a killing.

With Crude up and dollar down, American companies will earn more dollars. If only the sub-prime foolishness subsides, there wont be any problems.

[Caveat Emptor! This is my opinion]
By IAF: posted on 21-7-2007

Its getting worse.

The $NZ is at record highs aginast the $US all our exporters are howling about it many losing money on their exports. A country as small as ours exports to survive as our domestic markets are so small.

Technically it also means our imports are cheaper, but looking around I don't see any bargins.

July 24 (Bloomberg) -- The dollar declined to a record against the euro and weakened to a 26-year low versus the pound on speculation the rout in subprime mortgages is spreading, slowing U.S. growth.

The currency's drop accelerated after Countrywide Financial Corp., the biggest U.S. mortgage lender, reported a third straight quarterly earnings decline as more consumers fell behind on home equity loan payments. The yen gained versus all but one of the 16 most actively traded currencies as U.S. stocks fell and traders pared carry trades in which they borrow in the yen to invest in higher-yielding assets.

``The Countrywide report simply added to the dollar selling,'' said Tom Fitzpatrick, global head of currency strategy in New York at Citigroup Global Markets Inc. ``The concern is that we are starting to see the subprime issues spread into the credit market, which will knock on growth.''

The dollar dropped to $1.3827 per euro at 2:46 p.m. in New York from $1.3807 yesterday after reaching a record of $1.3852.

The U.S. currency fell 0.47 percent to 120.52 yen after touching 120.37, the weakest since May 16.

The dollar fell to $2.0654 per pound, the lowest since May 1981, before trading at $2.0639.

The U.S. currency fell to the lowest against the New Zealand dollar since March 1985 and the weakest versus Australia's currency since February 1989 as the benchmark Standard & Poor's 500 Index dropped as much as 1.2 percent.

A New York Board of Trade index measuring the dollar's value against six major currencies fell to 80.02, the lowest since September 1992, when the index dropped to the record low of 78.19.

A decline below 80 might trigger a fall to 76, according to Brian Garvey, senior currency strategist in Boston at State Street Global Markets.

More here
 http://www.bloomberg.com/ap...
By netchicken: posted on 25-7-2007

Im actually glad its dropping. It will make it easier to visit my family back home, as the dollar is now 2.05 against the pound. It certainly will be good for exports, and hopefully, will discourage this glut of imports that has been killing American productivity.
By Twilight_Rogue: posted on 25-7-2007

... Quote:
Originally posted by netchicken
Its getting worse.

July 24 (Bloomberg) -- The dollar declined to a record against the euro and weakened to a 26-year low versus the pound on speculation the rout in subprime mortgages is spreading, slowing U.S. growth.

The currency's drop accelerated after Countrywide Financial Corp., the biggest U.S. mortgage lender, reported a third straight quarterly earnings decline as more consumers fell behind on home equity loan payments.


Yeah, read that. After this report came out the market tanked! The dow went down 200+points and there was quite a bit of money made by the Derivatives players.

There is $ selling because all the Ibanks and funds are taking their money elsewhere, to emerging markets fearing the subprime problem. After that European markets tanked as well and then last Thursday there was a global sell off, tanked markets worldwide. The whole problem is people are so risk averse that they are trying to liquidate.
This entire situation was brough about by greed, banks who wanted to make a quick buck buying junk bonds and lending at subprime rates. I hope the worst is over. :sc
By IAF: posted on 31-7-2007








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