Tuesday, May 16, 2006

Why is the dollar under pressure

BBC: Why the dollar is falling so fast

What are the implications if the dollar continues to fall?

Posted by denzil @ 04:51 PM (809 views)
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8 Comments

1. Paul said...

There really is no way out for the US of Amerikuh.

The US government has some very stark choices. Raise rates even further (which Bernanke's recently signalled he might do) or watch the deficit plunge even deeper. The US trade deficit is 10x the size of the next net importer (Spain).

Nearly $900bn in debt.
Yes, $900,000,000,000 that the US owes the rest of the world.

To cap it, US real estate is in a tailspin:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/11/cnus11.xml

oil prices are not letting up and Japan is in a fiscal tightening mood. If the HPC isn't coming now, it's not going to at all.

Tuesday, May 16, 2006 06:00PM Report Comment
 

2. uncle tom said...

The $ is not that far off where it was a year ago, and does not seem to be in imminent danger of breaking records.

If you look at the US deficits data, and adjust for population difference, you find that the UK is in much the same boat.

Tuesday, May 16, 2006 09:48PM Report Comment
 

3. Rimmer said...

Uncle Tom

Living on borrowed Time and Money, common sense it has to end some when, odd thing is why the world views it with surprise?

Wednesday, May 17, 2006 12:28AM Report Comment
 

4. uncle tom said...

Indeed Rimmer,

And why the belief that economic growth will continue for ever, when the engines of sustainable growth seem to moving into reverse gear?

Smeg!

Wednesday, May 17, 2006 09:07AM Report Comment
 

5. talking rot said...

Hello, the doomsters are out in force again. The end of the world as we know it is nigh - head for the hills with your gold and beans!!!

There is an alternative view, as reported by "Times Online: Greenback will fall, Armageddon will not follow" which I'll post in a second.

There are ways around the impending doom that you see and I suspect the USA will find one of them. Yes the $US may fall, but it is unlikely to be terminal or have a long lasting effect. Please read my post.

Wednesday, May 17, 2006 11:14AM Report Comment
 

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