Do you understand how the dollar's collapse affects you?
Do you?
September 24, 2007
HousingPANIC Stupid Question of the Day
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62 comments:
Nope, not yet. You know what they say - ignorance is bliss.
I lived in Canada in the late 90s when the Canadian dollar was USD 0.60 and somehow managed to survive. Now it's stronger than the US dollar and quite honestly I don't think anyone in Canada can tell you their lives have changed since then for the better or worse.
If the dollar drops 20%, prices of imports don't increase 20%. What happens is the profits of the companies that export decrease 20%. A Honda that cost $20,000 in 2005 still costs $20,000 today. A Sony TV that was $1000 in 2005 is $800 today. A $5 trinket from China will still cost $5.
Yes gas will be more expensive and if you take a trip to Paris this spring you'll pay more. Aside from that, life will be about the same as it was.
No, please explain
the Dollar's collapse means that less people will be going to Europe, since the Euro is trouncing the dollar right now.
Instead more Americans will be going to Mexico and Mexicans will be coming to America. Is it possible that Americans move to Mexico, Mexicans move to America and the countries become inversed? If so, will the Mexicans completely trash the US like the do their own country while Americans beautify Mexico and becomes the Mexican renaissance? That will be the day you see Mexicans trying to sneak back into Mexico once again, since Americans "stole" it from them! VIVA Aztlan!
Nobody around here has the slightest clue! I got tired of harping on it. Unfortunately, to borrow from Ben Franklin, we WILL all hang together! After all, when the Titanic went down, all onboard, the rich and the poor, the wise and the foolish, went down with her.
i am not sure of the whole effecT or how it impacts me. Can't wait to find out before it happens. Let me know!
Yes.
I better get all my cash out of dollars and into anything else.
Maybe buy some yen., euros, etc. They may go to he11 also, but the greenback will be leading the way.
Maybe even Krispy Kreme donuts - at least they're edible.
US$ hit all time low this AM at 78.313.
And it means my gold is going to go to da moon.
$5000/oz = cheap ...cheap... cheap
There are too many foreigners buying up everything at my local stores, leaving nothing for me. :(
Don't care - American Idol is on.
AL QWAFFER, why no word on Hitler's visit to NY?
I guess you have been in Londonistan so long, you have swallowed their hatred of America to the point of not even noticing. Or is it not caring?
Or is it something like an enemy of Bush's is your friend.
Man you liberals are beyond fucked up.
Me? No. Not really. I have a 30 year fixed, low consumption, paid off 2006 car, etc...
I'm not saying that it WON"T (that would be dumb)... but in truth, I really do not know.
Yeah it sucks! I like Europe for vacations (french weirdness) so everything is so darn expensive I feel stuck in the US and A ...
Hell yeah!
-Greater export competition!
-No more buying Canadian drugs!
-Cheaper hookers! (sorry, just wishful thinking)
-More expensive coke? (oh no!)
-Domestic coke and marijuana producers get a boost, Columbians lose their pricing power and have to lower prices! (YAHOO!)
USA ! USA ! USA!
-Worldwide economic slowdown, as importers are forced to lower their prices to retain US demand.
-Slowing economies makes bull run extend in to the foreseeable future.
-US Trade deficit DECLINES.
SO what's the problem again??????
It's not all bad. It's good for exports and what's left of our manufacturing base. However, it will probably mean a lower standard of living in the long run.
Keep in mind, as long as China pegs the Yuan to the Greenback, it means that Chinese crap sold at Wal-Mart will still be so cheap, no one can compete. In fact, now that the dollar is worth less, even other developing countries won't be able to.
pwnd
perhaps you need to start a "dollar panic" blog.
what's this then, stock markets up again today.
5 days in a row since Ben's 1/2 point cut.
Thank you Ben.
Sorry HPers.
I know it's not good...I happen to hold a lot of dollars and am very concerned...moved out of Fidelity MM as it had a lot of CDO and Mortgage backed securities...creating new CD's to spread risk.... speculating that low interest rates on $ is temporary....off topic...in SF went to Open House - condo for $875 - realtor told me that financing required 20-30% down payment = $262k...interesting. In SF also saw a listing for a studio condo for $265k....earlier listed in the heavy $400k range...
FOOLS! It was never worth anything to begin with...suckers!
.
uglier hookers,
watered down booze,
reuising condoms more than 3 times,
vote for democrats
.
RE: Do you understand how the dollar's collapse effects you?
I sure do now, after reading THIS.
V.L.
Yeah it means I live in a lazy, corrupt country that looks the other way out of fear while the government is setup by elites to bilk the countries every resource dry.
It means that housing prices, in dollar terms, will skyrocket.
Well it has not collapsed yet, its been lower..we still have a ways to go.
As a good friend once told me ...
"when people can no longer put food in their stomachs, then they will riot ..."
Until then, it will be "business as usual" within the US.
I think, all tolled, it will be a good thing for us, a not so good thing for China, and a horrible thing for Europe.
We will likely see an increase in shopping vacations where Europeans fly to the US to go on a spending spree. Pretty soon Canadians will be driving south of the border to do their shopping as well. Even as Americans spend less, more and more Europeans and Canadians will buy American products. Meanwhile, Americans will buy less European products and the number of American tourists to Europe will be reduced.
China's currency is no longer pegged directly to the dollar and their currency is already artificially devalued. They may not be able to devalue their currency further to match the US dollar or they will risk reducing their spending power in a world that is increasingly ending its dependence on US dollars.
We will see our trade imbalance reduced and our international competitiveness increased. We will also see fewer immigrants from poor countries.
All in all, a weak US dollar is a great thing for this country's economy. In fact, sometimes I wonder if the Fed is intentionally devaluing our currency. After all, it is our position that by keeping the value of their currency low, China is unfairly advantaged. Perhaps we are trying to get some advantage for ourselves.
If this keeps up, Europe will really start to feel the hurt of a strong Euro. Poor Eastern European countries on the Euro will hurt the most. You might even see countries pulling out of the Euro all together.
Dollar index of 80 is no longer support its resistance.
Contrarian folk need remember that before looking at magazine covers.
@anon September 24, 2007 4:54 PM:
"what's this then, stock markets up again today."
What's that you were saying...?
US exports will be cheaper. Foreign imports will be more expensive.
The downside is......
No... my new favorite is Survivor China!
Kudlow & Hannity told us that everything is okay, so it must be true.
US exports will be cheaper. Foreign imports will be more expensive.
The downside is......
The downside is we are a debtor nation. Over 45% of our national debt is held by foreign nations who have been buying our securities.
A devaluing dollar is not by itself necessarily "bad", but a devaluing currency and low interest rates presents a poor return on investment. Thus, the nations that we rely on to service our debt will begin to buy other currencies instead of our own. Worse, they may decide to offload their current currency holdings in US dollars, flooding the market with billions (if not trillions) of US dollars. Which will devalue the currency even further.
I love listening to the clueless individuals on this board speaking of imports/exports like they are on the front line of trade. Its easy to feel secure with a dollar dropping in value only slightly. But what if the American dollar was 1/5th of the Euro? Or less than half of the Canadian dollar? This sound good to you?
Last time I checked, the majority of nations with weak currencies are third world countries. Not exactly good company.
Oh, and incidentally, some of you may want to read Greenspan's book and see what he has to say. His prediction is that Bernake has little to no room to manouver with regards to interest rate reductions. And he sees double digit interest rates in the next few years to offset the currency devaluation. Any guesses what that will do to home prices? Especially considering that people are defaulting at 5-6% rates?
Price of oil higher = everything you need to live will be more expensive = inflation:
- Shipping of EVERYTHING needs oil.
- The food we eat uses lots of oil (transport, fertilizer, machinery, etc.)
- Plastics are made out of oil.
- Public transportation in the US sucks, because greedy Rockefeller and Ford planned that way. So pay up at the pump, suckers.
- Utilities will be higher, since they need oil.
And the list goes on and on...
so after all the boo hooing the past week about the fed cutting the rate, the general consensus is they did the right thing because our exports will be cheaper?
something smells IMHO.
the dollar's slide affects me because it makes Euro exports more expensive and hurts the EU economy. The EU will just look east instead of west. they are already starting to do that anyway.
We're in uncharted territory.
Don't put all your eggs in one basket. Diversify your assets, Gold, Silver, CD's in other currancies. Pay off debt, rent, and help those you love do the same.
I'm inheiriting $115K in Cash and $36K in stock in 3 weeks. For me, what to do is no longer a theory to debate on HP. It's real and I'm nervous. I should probably follow my own advice.
I love you nutjobs.
Housing is crashing.
But inflation is rampant.
KOO KOO
KOO KOO
Yes, but there are some gaps in my understanding. Specifically, I have yet to determine the best way to smuggle my gold and silver outside the country, and what is the best country (thats not Switzerland) to have a near by safty deposit box with my stash? Canada? Do they check cars comming in to CA? What are the tax laws in CA for selling gold? These are serious problems I have with respect to the collapsing dollar.
-MC
Counterintuitive Investor wrote:
"Hey smug bastard, did you happen to notice the rates of LIBOR this morning? 30 basis point drop. Face the facts gentlemen, the doom and gloom bubble has just burst. We had a housing bubble up, then we had a housing gloom and doom bubble down. Both are done, now the market is finding homeostasis. Even the dollar has not done to badly considering. "
6 Month LIBOR 5.42
3 Month LIBOR 5.59
1 Year LIBOR 5.12
Looks a little odd, huh? This coming after HUGE exertions by central banks everywhere.
You might want to go check what those LIBOR postings were in 2003-2005, Skippy. I'll save you the trouble. Often (not always) they were below 2%. BELOW 2% Skippy. If you're waiting for your 2/28 mortgage on your overpriced shack bought in 2005 to reset to current rates sometime starting October 2007 to March of 2008, does it sound like a drop of 30 b.p. in LIBOR is going to help at this point Skippy? We are at the beginning of the this bust given the amount of fraud and stupidity. We're not at the middle or the end. The VERY, VERY stupid don't even think this is the beginning of a long term fall in real estate prices.
Smug Bastard
Most Americans do not have a clue what they are about to face. Instead of three dollar gas, try 30 dollar.
Interest rates 20 percent at least. Unemployment 15+ percent. Daily violent demonstrations and even food riots.
Price of oil higher = everything you need to live will be more expensive = inflation:
- Shipping of EVERYTHING needs oil.
- The food we eat uses lots of oil (transport, fertilizer, machinery, etc.)
- Plastics are made out of oil.
- Public transportation in the US sucks, because greedy Rockefeller and Ford planned that way. So pay up at the pump, suckers.
- Utilities will be higher, since they need oil.
Well, there is another plus on the housing bust - not as much demand for asphalt shingles on all those newly constructed roofs and not as much oil consumption that goes into making houses and transporting materials.
Smug Bastard
"Last time I checked, the majority of nations with weak currencies are third world countries. Not exactly good company."
Zimbabwe or bust
HARARE, Zimbabwe, April 25 — How bad is inflation in Zimbabwe? Well, consider this: at a supermarket near the center of this tatterdemalion capital, toilet paper costs $417.
No, not per roll. Four hundred seventeen Zimbabwean dollars is the value of a single two-ply sheet. A roll costs $145,750 — in American currency, about 69 cents.
"I haven't a square to spare - Elaine"
Smug Bastard
All right, it means my savings in roubles (still at 9% inflation rate) revalue drastically as the dollar plunges from 31.87 in 2003 to 25.00 today. Guess I can spend some of local currency on Asian high-tech import goods before everybody realizes the obvious.
But we continue to keep a few Franklins and Grants under our mattresses -- FRS, beware!
People actually think a falling dollar helps America??? Yeah, because there are so many economic powers with a poorly valued currency....and also so many countries with a high standard of living with a poorly valued currency.
If you don't think this affects you think about it like this....
Raw materials and food are traded on a global market, a falling dollar means less purchasing power for these. Oil?? Yeah that is just one commodity...how about corn, grown here in the good ole US of A. Every single thing that you buy at Walmart is made from some kind of raw material or food, price of these things go up on the global market...price goes up to you the american consumer. Oh yeah, and that savings you had, well its not worth as much anymore. The government took a nice little bite out of that for ya last week. Oh, you don't have any savings? Well, the US dollar has fallen 5-7% this year so far...but you have gotten a 5-7% raise with that, right? Oh and your retirement suffers too.
Stop believing the media spin. Each and every american should be crazy about this...but the spin is our exports are more competitive. Give me a break.
Meanwhile we are talking about gay marriage, stem cell research, prayer in school and Iraq. While the country is being stolen, your dollars are being stolen from you. IF you are fortunate enough to have bought your house more than 5 years ago, ask yourself this...if you didn't could you afford your exact same house today? You haven't gained a thing with your house increasing in value, it's still the same house. Everything else you own has lost value....including your job. If you can't afford your house today but you could 5 years ago....you have taken a severe paycut.
"Any guesses what that will do to home prices? Especially considering that people are defaulting at 5-6% rates?"
Hey Anonymous - People are not defaulting on 5 - 6% rates. People are defautling on 10 - 15% rates. That is what the subslime mortgages reset to. If they were normal market rates of 5 - 6% rates after reset, we would not have this problem.....
Time to sit on that hazy hill, spark a joint and laugh at it all.
Veronica Lodge said...
I sure do now, after reading THIS.
---
This guy is awesome. Thanks for the link, Veronica!
"Any guesses what that will do to home prices? Especially considering that people are defaulting at 5-6% rates?"
Hey Anonymous - People are not defaulting on 5 - 6% rates. People are defautling on 10 - 15% rates. That is what the subslime mortgages reset to. If they were normal market rates of 5 - 6% rates after reset, we would not have this problem.....
Lots of the "subslime" are defaulting on the 1 and 2 percent teasers they started with. Some don't even make the first payment. Damn this country is full of scum, both foreign and domestic.
"Pretty soon Canadians will be driving south of the border to do their shopping as well."
Canadians are already importing vehicles from US dealers because even with an import duty tax, it's cheaper buying stateside.
Here's a contrarian thought:
Fellow HPers, enough about Weimar, the US doesn't have to payback war reparations to anyone and we don't have Zimbabwe's General Mugabe kicking out nationals (with money and businesses) just because they're of a different color than him.
A more accurate scenario is the British Empire, starting with the succession of India in '47 up until the loss of the petrodollar hub, Bahrain, during the early 70s. For that time period, the pound took a serious pounding (pun intended) on the forex, going from a high of 4 GBP to 1 USD to a low of 1.5 GBP to 1 USD. And realize, Britain lost most of its territories, the equivalent of the USA only being able to keep New England, New York/NJ, and Pennsylvania but losing the rest of the nation. And this is in terms of production and capacity (along with a population of taxable and producing worker bees), not simply aggregate land masses.
Our profligate borrow and spend practices have doomed us to a long term bear market, however, given our world reserve status as the "Pound Sterling" for this particular era, we'll be seeing a lot more of what Britain went through during it's slide downhill before it had resurrected into the financial hub ("The City") of continental Europe during the 80s. My only hope is that we're not depending upon Wall Street for our future comeback because if so, then we're really on the way to becoming a Brazil of the 80s, as an end game.
Isn't the destruction of the U.S. middle class just another page in the playbook of the power elite's plan to subdue those of us who would oppose the coming communist take over of America?
As to the destruction of the Dollar, that's essential to the introduction of the Amero which will be hailed as our financial savior.
Invest overseas and in PMs. Little else will save you.
It became clear to me this weekend at the shooting range. Two years ago you could buy Wolf 7.62X 39mm ammo (made in Russia) for 1000 rounds per $100. This weekend the cost was 300 rounds for $100. That seems like a 70% drop to Me.; in all fairness this is not all due to the weak dollar the war plays a part. But the war is part of the reason for a weak dollar Sun Tsu knew this 5000 years ago.
the price of everything goes up while wages and salaries stay the same
"Yes, but there are some gaps in my understanding. Specifically, I have yet to determine the best way to smuggle my gold and silver outside the country, and what is the best country"
Well, what you need is a decent sized sailboat. Replace the lead ballast with a container for your gold. Then sail off to a foreign port -- not sure which, but the world is out there for the choosing.
http://www.infowars.com/articles/economy/greenspan_confronted_by_activists_flees_from_angry_mob.htm
Watch the videos in this link.
They are getting ready to pull out the carpet. Be warned!
I don't care anymore,I've gone Global.HA.....HA so there.
For September 25, 2007 4:01 Clipped Link-
Greenspan confronted
http://www.youtube.com/watch?v=S5wfNnV6vTU
To the poster who glibly pointed out that the Dow is up lately..
Try adjusting the Dow for inflation and then against the Euro. Over the past 3 years, you barely break even.
The Dow has steadily increased.. because the money supply has increased at the same rate. The Fed has turned on the printing presses the past 3 years to transfer more of your wealth to the super-rich, the true Republican clientele.
If you adjust today's Dow to the equivalent purchasing power of the dollar when Bush the Stupider entered office, you get a gain under 100 points.
Thinker wrote
"All in all, a weak US dollar is a great thing for this country's economy. In fact, sometimes I wonder if the Fed is intentionally devaluing our currency. After all, it is our position that by keeping the value of their currency low, China is unfairly advantaged. Perhaps we are trying to get some advantage for ourselves."
I think you may be hitting the nail on the head since I believe a weaker dollar would help manufacturing here.
Smug Bastard
iVE GOT ALL THIS BOUGANVILLA BUSH REFUSE..DOES ANYONE KNOW HOW TO TURN IT INTO MASH TO GET IT READY TO DISTILL FOR GASOFUEL...LOOKING FOR ALYERNATIVE METHODS OF SUSTAINABILITY....
"what's this then, stock markets up again today.
5 days in a row since Ben's 1/2 point cut.
Thank you Ben.
Sorry HPers."
Just because the stock market is up, doesnt mean USD Index is up. its at its lowest point. time to cash out and get some gold. Sorry buddy. glad that the dow jones being +86 is a positive economic indicator to you. Good luck!
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