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I have read that China is getting ready to pull their investments in the dollar and when that happens could we expect things to get worse? I believe so anyone have any opinions on this?
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Re: Do you think that America will face problems?
Sure, there will be downward pressure on the dollar. This is a good reason to have a third of your portfolio in global funds.
Will there be a mass exodus from dollar-based investments? Unlikely. There's a good reason foreigners invest in American investments: the stability of our financial, economic and political systems. -
Re: Do you think that America will face problems?
Sweepsplayer is spot on!Comment
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Re: Do you think that America will face problems?
The lack of corruption (and there really is a lack when you study other countries' economic systems) makes investing in the US very cheap - relatively.Comment
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Re: Do you think that America will face problems?
Hmmmmm.Originally posted by Sweepsplayer
As you can see from the following chart, the dollar has been declining since the ’29 Crash:
CHART
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Re: Do you think that America will face problems?
Uh, relevance? We're talking about the value of the dollar compared to other currencies. Of course the value of a dollar compared to a basket of goods is declining. That's the concept of inflation -- can you say inflation? I knew you could. If this chart was heading upward, that would mean we're in perpetual deflation - a bad bad thing. A dollar used to buy a hell of a lot more 100 years ago. But if you haven't noticed, our wages are a little more than $0.10/day here in 2006.Originally posted by VJWComment
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Re: Do you think that America will face problems?
The dollar ?Originally posted by Sweepsplayer
You don’t think it effects the value compared to other currencies ?We're talking about the value of the dollar compared to other currencies.
But you apparently haven’t noticed that American’s wages have fallen rather dramatically as well. Just during the 12 years of Reagan/Bush, the real wages of the vast majority of working American went backwards by about 20%, and during the last five years the real wages of the vast majority of working American went backwards each and every year.A dollar used to buy a hell of a lot more 100 years ago. But if you haven't noticed, our wages are a little more than $0.10/day here in 2006.
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Re: Do you think that America will face problems?
News flash: Inflation affects other countries too!Comment
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Re: Do you think that America will face problems?
However:
Swiss franc
Japanese Yen
German Mark
And remind me, what has happened to the EURO since the end of 2000 ?
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Re: Do you think that America will face problems?
Those links don't work for me (404), but I assume they show those currencies walloping the dollar. No doubt the dollar has been declining (hence my comment that there is downward pressure on the dollar). But my opinion is that it won't fall that much more. The world economy depends on a stable U.S. dollar. That's why China has kept their currency unnaturally low -- so we'll keep buying lots of stuff from them.
A declining dollar isn't all bad, I might add. Our goods become more competitive overseas, for example.Comment
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Re: Do you think that America will face problems?
Yep. Apparently the site blocks outside linking.Originally posted by Sweepsplayer
I’d be interested in learning by what possible basis, given the track record.No doubt the dollar has been declining (hence my comment that there is downward pressure on the dollar). But my opinion is that it won't fall that much more.
Then the “world economy” is in deep trouble.The world economy depends on a stable U.S. dollar.
Nice theory, but it’s wrong.A declining dollar isn't all bad, I might add. Our goods become more competitive overseas, for example.
The Bushies came to power with just that theory, that if they intentionally pushed the dollar down, it would increase exports for Corporate America. They pushed the dollar down and the trade deficit has WIDENED.
Another in a long string of failed RightWing theories.
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Re: Do you think that America will face problems?
VJW, I know you'll have to get in the last word, so hopefully this'll be the next-to-last comment in this thread...
I strongly encourage you to read up about the difference between causation and correlation. The economy is affected by a huge number of variables. The charts and figures you give to us (when not misleading and/or irrelevant) may correlate to some macroeconomic event but are likely not the cause (or at least sole cause) of the event.Comment
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Re: Do you think that America will face problems?
I merely respond in kind.Originally posted by Sweepsplayer
Sez you, without any substantiation, as usual.I strongly encourage you to read up about the difference between causation and correlation. The economy is affected by a huge number of variables. The charts and figures you give to us (when not misleading and/or irrelevant) may correlate to some macroeconomic event but are likely not the cause (or at least sole cause) of the event.
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Re: Do you think that America will face problems?
Oh, BTW:
Warren Buffett disagrees with you. He has recently placed a rather large bet against the dollar, utilizing $21.4 billion of Berkshire Hathaway money, by purchasing foreign exchange contracts in 12 different currencies that will only pay off if the dollar declines a lot further.No doubt the dollar has been declining (hence my comment that there is downward pressure on the dollar). But my opinion is that it won't fall that much more.
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Re: Do you think that America will face problems?
Yikes! You've convinced me. First thing on Monday, I'm selling my entire portfolio and putting everything in gold bullion. Thanks for the heads up.Comment
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