Watching the financial news it seems like all the "experts" are predicting a further fall in the dollar. I think the "experts" are about two years too late with their forecasts. Where were they in 2002 on the crest of a 40% or so decline in the greenback? JMO, but I would bet on a steady to higher dollar over the next year.

I'd say there's a fifty percent chance you'll be right. Or some chance that you'll be 50% right.

Best wishes,

Rex

yes, rex, that's how I usually respond to stock market predictions. Of course when I ignore them they do turn out to be 100% correct.

Is this wishful thinking, some sort of advice people are supposed to use when planning their next vacation, the product of office boredom, or copy for Omar's daily horoscope column?

<<Is this wishful thinking, some sort of advice people are supposed to use when planning their next vacation, the product of office boredom, or copy for Omar's daily horoscope column?>>

Yes.

"Where were they in 2002 on the crest of a 40% or so decline in the greenback?"

I believe that, like the rest of us, they were in a world before the US was simultaneously pursuing a hugely expensive war and a series of tax cuts, resulting in record budget deficits. Now why couldn't they have predicted that?

As I have posted on another topic, yesterday's Times (London) ran a story in the business section of how Bush is deliberately pushing the dollar down and trumping the Euro by making exports cheap. Japan is doing the same, apparently. The Times reckons that it is a good ploy as Bush is borrowing at just 4%.
The bubble will burst only if the European Central Bank slices interest rates.
The dollar dropped another 2 cents against the £ today after dropping 2 cents the day before. It remained steady against the Euro.
Surely Bush isn't that clever. Did someone tell him to do it? LOL.

For all of you planning your next trip to Europe, plan on $2 for 1 Euro. Then you will not be disappointed, and you will have a marvelous time.

Yeah I don't think it's bottomed out. The ECB is still focused more on inflation than growth, and because oil futures are dollar-denominated the fall of the dollar against the Euro hasn't led to the rapid runup in energy costs in Europe that we've seen in the US. (Imagine - Americans paying at the pump what Europeans were paying 20 years ago. Oh horrors.)

The place to watch is China, not Europe, as the Chinese haven't allowed their currency to float against world currencies (and why would they when Americans keep buying their stuff at current rates) <i>plus</i> they're increasingly driving the oil market with humongous growth in demand.

So no, I think things like airplane tickets and hotel rooms and fuel for rental cars isn't going to get any cheaper in the next year, and the $2 &pound; and the $1.50 &euro; will be sitting there under the tree. Ho Ho.

This is not a surprise. This current drop in the dollar was predicted at least 6 months ago. Everything I read then said the dollar would continue to fall into the 4th q of 2004, and likely would not strengthen until 2nd or 3rd q 2005.

Of course, no one really knows what is going to happen, and so-called experts are wrong as often as they are right. But this article in this morning's Boston Globe was pretty sobering:
http://www.boston.com/news/globe/edi...inking_dollar/

The writer quotes Paul Volcker as saying that he thinks that the odds of a dollar crash in the next few years are something like three in four.

My reaction is: Might as well travel now, since things probably won't get any better soon and seem most likely to get worse.

The European central bank will not let the euro get to $1.50, exports to the US would be hurt too much. I think the high water mark for the near term will be $1.35 to $1.40 based on what I'm reading.

If you're referring to Sydney Omarr, he passed several months ago.

Even Carnak the Magnificent cannot predict the dollar's ride.

You could train a monkey to time the market better than most &quot;experts&quot;.

Having watched the &quot;experts&quot; predict 12 of the last 5 recessions and 11 of the last 4 bear markets, I'll go with Rex
&gt;I'd say there's a fifty percent chance you'll be right. Or some chance that you'll be 50% right.&lt;

Or maybe, &quot;There is some chance that 50% of the time you will be 50% right&quot;.

Is Warren Buffet buying, selling, or holding? He is right more than he is wrong!!

This is from this week's New Yorker.

http://www.newyorker.com/talk/conten...a_talk_cassidy

The &quot;Sage Of Omaha&quot; had this to say earlier this year at his annual meeting,&quot; Buy some Euros. Berkshire-Hathaway has 1 billion of 'em.&quot;At the time the Euro bought about $1.20.I would say he has made a nice profit in the meantime.

Nobody knows and it is not even worth trying to predict.

i earn and save in &pound;&pound;&pound; but have some ties in the US. i'm moving to $$$. there is simply too much press and hype around the rise of the pound/euro...this is when it is time to sell IMO.

i buy stock when everyone is selling and sell it when everyone thinks it can only go up. today, everyone only thinks that the dollar can go down, therefore i am buying. obviously the currency market is different from the stock market but i think this principle applies.

disclaimer...i'm not sophisticated nor do i have any knowledge of currency markets. just common sense. i would never trade currency to make money but for me it is to cover some US things that will i need it for in the distant future.

This whole subject is so complicated that none of us can be at all certain of what will be. Only a couple of posters have touched on the subject of the yuan, yet that appears to be a major factor. No one has even broached the subject of the dollar no longer being the world standard (many nations central banks keep their reserves in dollars because of the historical strength of the dollar; if they decide to switch to some other currency, there would be an awful lot of dollars for sale and the value should plummet). On the other hand, there is always a question of whether the dollar is going down, or the other currency is going up? Some are unwilling to put a lot of faith in the euro, a new currency backed by the full faith and credit of nations who historically have been at each other's throats, and who seem to lack the political strength to force each other to comply with economic agreements.

Currency valuation has traditionally been a difficulty for international companies, who can see their profits or losses disappear because of changes in the exchange rate. How can tourists, with almost no economic training, expertise, and information, hope to do better?

Frankly, we are not planning a annual Italy trip for 2005, but hope to see more of the USA. The dollar decline has sealed the deal for us...at least for this upcoming year. But, I can't wait to read all of the great trip reports from all of you!