Dollar Continues To Lose Hearts And Minds
By Justin Gardner | Related entries in Money, The WorldCurrency fluctuates. That’s just what it does. But after Bush abandoned the strong dollar policy, our currency has done pretty much nothing but become less valuable.
And what once was the standard, is now being shunned nearly everywhere…
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.”
And there it is. And virtually nobody’s talking about it on the campaign trail.
Why?
This entry was posted on Sunday, November 18th, 2007 and is filed under Money, The World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
November 18th, 2007 at 5:53 pm
Why are no candidates talking about the declining dollar? Simple. if they talk about it, they would pretty much have to say something about what they would do about it. Any real solution would involve a lot of stuff that people would really resent, like more balanced budgets.
Of course, they could simply give out economic insanity and pretend that it was workable. After all, Edwards (among others) does that all the time, and rarely gets challenged on it. But why take the chance, as long as they can just ignore it?
November 18th, 2007 at 7:38 pm
My wallet feels more deflated every day. And I don’t buy much.
wj, my guess is they don’t bring it up because any solution will mean instant pain to the voters. The only way to correct the problem is a combination of balancing the budget (can you say tax increase?) & tightening credit, meaning an instant recession. Far better to put off dealing with the problem until after the elections, if that is possible. This appears to be the reason for the Federal Reserve tactic of lowering interest rates.
Neither party wants to have to talk about what it will take to fix the problem because it would cost votes. OTOH, if we are in recession before the election, the GOP can kiss what little chances they have of reelection goodbye. Of course, then they will blame the recession on the Democrats.
November 18th, 2007 at 11:43 pm
Well, frustrated Americans whether or not they vote in the election, are voting with their feet. I work in information processing, and a lot of people from the firm in recent years have been moving to Germany. German is must-know for many tech fields anyway no matter where we are, and especially if someone already knows German, or is just planning to, the thinking is: With the Euro worth so much, why not just move to get a job in Germany? IOW, human capital follows financial capital. Some other Euro countries such as France, Belgium or Italy have also been getting this American talent.
Nobody goes to the UK really– highest personal debt levels in the world there and bracing for a fall. Also, even many Canadians and Australians are moving to Germany and other Euro countries for the same reasons. If you can work the same or even more modest hours and make more money, with better quality of life and better schools to raise your kids in, why not? And Germany/Austria is just visually appealing to live in– not to mention places like France, Switzerland and Italy!
The only hurdle is just language, but German’s handy anyway for anyone doing tech. And French isn’t too hard to learn if you’re there.
I’d advise any professional in North America, Australia, New Zealand or similar places with this currency mess going on (or in the UK for other reasons)– learn a Euro language, esp. German if you’re technical, or otherwise something like French or Italian if you’re inclined in that direction, and consider moving. You can get a lot more done, and get paid a lot more in the process, with a better place for your children to grow up in and attend school.
November 19th, 2007 at 1:04 am
THIS IS WHAT I SEE BUSH IS TRYING BANKRUPT AMERICA, AND SO IN 2010 WHEN THE NORTH AMERICAN UNION IS IN PLACE THEY CAN SAY WE NEED TO SWITCH TO THE AMERO TO SAVE THIS COUNTRY, ITS ALL IN THE PLAN FOR ONE WORLD GOVERNMENT BY THE GLOBALIST.
November 19th, 2007 at 7:16 pm
The candidates probably aren’t talking about the sinking dollar because it’s starting to cut into our humungous trade deficit, which is a good thing. This represents a back-door way of getting people deep in debt to ease off demanding more and more credit.
And, the relatively nice thing about this development for the candidates is that it actually spares them from having to administer strong medicine to slow down America’s headlong rush toward insolvency. Market forces will slow things down automatically.
That’s because as the dollar sinks in buying power, foreign-made goods and services become more expensive to Americans. At the same time, U.S. exports become more affordable and attractive to foreign consumers.
Bush & Co. will step in to stop this process if, and only if, oil-producing countries like Iraq and some of the others switch to doing business in terms of Euros instead of dollars.
November 19th, 2007 at 10:39 pm
Yeah, nobody, that is Ron Paul to the main stream media, has been talking about this since he first went into Politics. It’s his primary point of contention. But of course to the main stream media and their autocrats he will remain, the One Who shall not be Named. Thank God for the Internet.
November 19th, 2007 at 10:41 pm
Sorry, he’s a “virtual nobody”
November 21st, 2007 at 2:00 am
The old saying -
“Be careful what you wish for – it might come true”
There were plenty of warnings of the likely impact of Bush’s tax cuts on the US economy – that the promises were as likely to be sweet violets as they were to be roses. The tax cuts for a start are inflationary.
I doubt that anyone is concerned about how much of the US is now owned by the Chinese – through their funding of US government bond issues. That pumps even more liquid dosh into the US economy, and (if the pundits are right) increases the rate of inflation.
But the biggy is the mortgage market and the likelihood of that imploding. There was plenty concern about Freddie Mac and Fanny Mae some 5 years back. Nothing came of them – in terms of predicted collapse. So, what are the chances this year? Well, look no further than Citi Group for a start…