Dollar predictions?

[zooracer]

I found this interesting article from april of 2007 showing a classic head and shoulders bottom with the euro...forecasting a possible breakout.

Of course, the article turned out to be correct in it's forecast.

I'm curious to know why the dollar has not been bailed out...as it and other currencies have in the past....such as the louvre accord to halt the dollars decline in 87. We have done similar things with the euro too.

So, are we not doing it now because it isnt serious enough?

With everything else happening kind of at once here (oil prices, credit crunch, etc...), i would think this is a good time? And, if we enter into a recession, it's gonna get really ugly...no?

[sweeps]

The Bush Administration has a misguided weak dollar policy. Don't expect much of a recovery until he heads back to Crawford.

[cooliemae]

I could be wrong, but I believe the idea about not worrying too much about the dollar is that a weak dollar encourages exports. Because the dollar is weak compared to say the euro, things from us are cheaper than purchasing them elsewhere. Therefore, we get the benefit of increased exports and hopefully in turn avoid a recession.

[jc3900]

The Bush Administration has a misguided weak dollar policy. Don't expect much of a recovery until he heads back to Crawford.

I don't think you can rest a weak dollar entirely on the Bush Administration. Yes he is partly at fault but there are many others to blame as well. Besides bush you have the most important player, the fed. For the last 6 months the fed has done nothing but murder the dollar by lowering interest rates to bail out the banks.

Actually the all time biggest player in a weak dollar was wilson who put the federal reserve into action and thus took us off the gold standard. In fact, if we would have been on a gold standard all this time oil would have virtually stayed flat.

Besides the fed, there is also a week congress who has instituted no BIG tax cuts or cut government spending.

[zooracer]

I could be wrong, but I believe the idea about not worrying too much about the dollar is that a weak dollar encourages exports. Because the dollar is weak compared to say the euro, things from us are cheaper than purchasing them elsewhere. Therefore, we get the benefit of increased exports and hopefully in turn avoid a recession.

your right about that....

so, I guess this isnt considered enough of a problem....

I wonder if they will ever rescue it in such a way as the past accords....I just havent heard any mention of this anywhere.

[jIM_Ohio]

The low interest rates make the dollar weaker, and I think we will also find this was a way to fight the war on terror. Seriously.

We know terrorists add counterfeit money to the US money supply (that is why the $20 changed a few years back). By lowering the currency (weak dollar) that tactic is no longer effective for crippling the US economy.

In addition if we knew most terrorist funds were in US dollars, and those dollars are worth less, they cannot buy as many supplies to fight us in Iraq and Afghanistan.

We won't know this for sure for another 20 years or so.

[sweeps]

By lowering the currency (weak dollar) that tactic is no longer effective for crippling the US economy.

So you're saying we pre-emptively crippled our own economy?

[jIM_Ohio]

So you're saying we pre-emptively crippled our own economy?

Yes, to some degree.

But the gain is the terrorists which were using counterfeit money to buy military supplies now need to make more counterfeit money, or buy less supplies.

If they make more money, it's possible it's easier for us to find out where the money is coming from.

If they buy less supplies, it's clearly to our military's advantage.

No way to know for sure, but that is a guess as to one tactic being used to fight the terrorists.

[zooracer]

well....I dont know about all that...

I have always been a republican, although now have moved to libertarian...yet, I really dont see such a serious threat from terrorism to warrant destroying our own economy...

In fact, we have some serious problems going on now and I hope we pull out of Iraq very soon...

We have a serious problem now with fuel. And, it isnt so much an oil problem as it is a refinery problem. They are operating at 100% and it doesnt matter how much backlog of oil we have, we cannot refine it fast enough.

We may be seeing oil at 225 within 3 years, as predicted by some experts who are pretty well connected.

What this means is, we are going to continue to see an increase at the pump AND we are going to continue to see food prices go up.

The middle class, who live at or nearly at what they make every month are going to be seriously hurt by this.

Spending is going to drop drastically. I see people on CNBC calling for an end to the recession very soon...but I think they are wrong.

The middle class has not started pulling back their spending all that much yet. I think they will start by 3rd or 4th quarter this year.
If the dollar is still weak, and housing is still unrecovered, etc....I think we are in for a deep and LONG recession.

Go ahead, call me paranoid. Unfortunately, I think I'm right.

As a side note, I would still buy oil...even though there is some consolidation right now after it's meteoric rise this last month....I really do think we are headed for over 200.

As unfortunate as this is, I plan to make some money off it

[jc3900]

WOW is all I have to say. Ok, in my other thread you guys pretty much said I was a moron that lacked common sense for being a libertarian. Now Jim is making statements like "The united states purposely lowered the value of its own dollar to lower the purchasing power of terrorist?" You have got to be kidding me. And I am the one who lacks common sense?

[WineAndCheese]

I don't know about lowering the value of the dollar to thwart terrorism, but it would definitely make sense to lower the value of the dollar to decrease imports and increase exports.