Cheer up, the dollar drop will get worse
 

If you want cheering up about the price of the US dollar, don't read this article posted on Yahoo. Instead go read science fiction, or economic fantasy, or listen to a presidential press conference.

http://tinyurl.com/2rndxm

Here is an excerpt to really turn you off:

The dollar has steadily eroded in value against the euro and other currencies since 2002 as U.S. budget and trade deficits ballooned, but fears of an American recession and credit crisis have sent the dollar to stunning lows amid predictions the slump will continue for a long time.

The euro traded for a record $1.5625 before declining to $1.5586 Thursday while the dollar dropped below 100 Japanese yen for the first time since November 1995.

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Welcome to the most recent addition to the list of debtor nations whose currencies are shunned.

I could say: I told "you" so before, it's just the beginning, but all I'd say today is:

GET OUT OF THE $.

Couldn't they have waited another 2 months ---- until I got back?

My most recent Kiplinger Letter has even more grim predictions ... am hoping my $ will spend better in SE Asia this Fall. The mental stroll from knowledge to acceptance of the situation has been bitter to say the least.

I am going to Italy in Mid-May. Can I buy Euros here now? Where? Does anyone think I might save a few "bucks" if I get some Euros now?

Me, too, Ira!!
I have the second installment of a Paris apartment due on Monday. At least the first half was paid at a better rate and I have 200 Euro left from a January trip to spend while there.

My investment banker in Luxembourg continues to say that the dollar has not hit bottom yet. The euro at 1.60 is nearly a certainty.

>think I might save a few "bucks"
Yes, but it's only "a few" bucks, better worry for your lifes savings, if they are in USD.

MSNBC has a story titled: Dollar Losing Clout Around the World. The Fed and the current White have really screwed things up - and I'm not very encouraged that a change in 09 is going to do any good.

And I really believe putting a Democrat into the White House will increase the world's confidence in the US and the dollar will go up (at least temporarily).

<i>Yes, but it's only &quot;a few&quot; bucks, better worry for your lifes savings, if they are in USD.</i>

Exactly. I really don't understand this handwringing. It isn't just that I think the dollar will rebound at some point (the Euro was weaker in 2001/2002 than than the dollar is today), it is that one's vacation likely makes up a fraction of their income.

Focus on making sure the rest of your financial life is in order. Move your savings to foreign stock or bond funds if you are that worried about the dollar sliding. Yeah, 10% extra on your vacation isn't fun, but it is the least of your concerns.

most of the stuff in that article is laughable and sensationalist. read it again and think about some of the silly things it says.

the dollar might be falling but the sky is not. i'm not sure why the fact that the taj mahal is no longer accepting dollars might send some of you into a panic.

this article is sensationalist journalism that should be laughed at and not revered. obviously brazilian businessmen travelling to china would be better off doing one currency trade than two...in the past it was next to impossible to get yuan outside of china. not sure why this is indicative of anything to do with a dollar collapse.

they quote one antiques importer who says wants euros for buying trips in europe ....but the first paragraph screems that antique shops in manhattan don't want any dollars.

and the paragraph about investors with a million dollars wanting to invest in South Africa, Australia, New Zealand is even more laughable. what does that have to do with the dollar decline? these are just high interest rate countries! why not run to turkey, their interest rate is even higher.

total nonsense.

The USD will collapse in the not to far future. It won't come back.

<i>The USD will collapse in the not to far future. It won't come back.</i>

Gosh, it was only 6 years ago I remember reading the same thing about the Euro. Excuse me if I'm skeptical this time around. But, hey, if you want to offer some rationale behind this statement, feel free.

It's your money, I've got mine (rather) safe. :-)
Doesn't take too much, to reach that conclusion. Or maybe just wait and see.

I think a lot of the &quot;finanical&quot; reporting is &quot;sensationalized&quot; I read an article on MSNBC a few weeks ago where the headline claimed that Beer and Pizza now cost &quot;an arm and a leg&quot; I don't know about you, but my arm and leg are worth more to me then $25!!!!

You kind of have to read and digest and decide based on that. I am still leaving for Paris Tuesday.... I just won't buy much, but I never really do. I go for the &quot;experience&quot; not the stuff LOL!

Indeed some very odd hysteria.

When you live in the US, and your life savings are in $, it will only have an impact if you plan to buy a chalet in the Euro zone and live there from your $ pension.

If you stay in the States, what will depreciate the value of your savings is your national inflation rate, not some foreign exchange rate. How other factors like the oil price may play a role is a different topic.

Countries with high interest rates usually come with the downside of high inflation or a volatile exchange rate. It is quite normal that more risk-friendly investors put some of their money there.

The Euro zone does not profit (or gets hurt) a lot by the weak dollar. On one hand, a huge chunk of the trade is between the Euro zone countries themselves, and trade with, for example, the U.S. is hedged. Thus, the price for a BMW or Porsche in the US does not rise by the same ratio that the dollar declines. And we guys in the Euro zone pay more for our BMWs than we should have to.

If you look back in history, there is no such thing as eternal stability. The most sensible thing for someone in the Euro zone would be to invest in $ or property now, while you Americans should do your economy a favor and spend some more $$ on Coors than on Limoncello.

<i>It's your money, I've got mine (rather) safe.</i>

Don't worry about me. I'm protected either way. Indeed, I watch this all with amusement.

But, I'm still curious about your assertion, as I don't see that much fundamentally different between the two economies. At some point, folks will stop worrying about the US problems and start worrying about the coming demographic crisis in Western Europe and Japan again. A few years after that, they will decide to worry again about the US trade deficit and it will swing the other way.

I guess I just don't buy the notion that something fundamental has changed in only 6 years.

CarolA, I'm leaving for Paris Tuesday too. So maybe we'll recognize each other from the airport when we get together the next week.

CarolA, I am leaving on Tuesday too!! I'm very excited.

The rise of the dollar means one less chocolate tea at Angelina. But thats ok, my thighs will thank me later.