Don't Like a Weak Dollar? Might as Well Get Used to It (USA) - Polidicks

[quote]Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market. CNBC.com The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world's predominant national currencies. A combination of factors accounts for the weakness, with the Federal Reserve's easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the financial mess in Washington leading the way. In short, as trader Dennis Gartman noted Thursday, "the rout of the US dollar" is in full effect. "Panic dollar selling is setting in," Gartman, a hedge fund manager and author of "The Gartman Letter," wrote in his daily commentary. "This may carry farther than any of us dream of or, worse, have nightmares of." How low can it go? Rick Bensignor, chief market strategist at Dahlman Rose in New York, said the dollar index [.DXY 74.08 -0.03 (-0.03%) ], which measures the greenback against a basket of select other global currencies, has scant technical support "that has any meaning" between its present level and the historical low of 70.70. That's a widely shared view, even as currency pros wonder how the dollar could be falling against the euro considering the near certainty of sovereign debt defaults in smaller European Union nations. Gartman described the dollar as being in "serious jeopardy" because of its status against the euro, which was defended recently as European Central Bank President Jean-Claude Trichet announced a rate hike in the zone. No such defense is being offered in the US, where neither Fed Chairman Ben Bernanke nor most of the rest of the central bank's Open Market Committee seems much in the mood to raise rates despite the anemic dollar. Though the Fed is ostensibly apolitical, there is no pressure as well from the Obama administration to boost the dollar's value. "If things were to somehow go into freefall or there were disorderly markets, or if it is associated with a rise in interest rates, there could be some concerns there," said Josh Feinman, chief global economist at Deutsche Bank Advisors. "But that's not happening at all. Rates in the US are still very, very low. At the margin, (a weak dollar) is a slight easing in financial conditions." That, of course, is not the case for consumers buying food and energy. Some economists believe that a weak dollar is contributing heavily to the surge in prices at the pump, with one speculating that gas could reach $6 a gallon or beyond by summertime, given certain conditions. Food prices also are on a steady climb higher. In both cases, a weak dollar is at least somewhat to blame as it drives commodities, which are priced in dollars and therefore cheaper and more attractive to speculators in the global marketplace. But the stock market has enjoyed the weak dollar. The Standard & Poor's 500 and the dollar have had almost a perfectly inverse relationship this year, with the stock index gaining just over 6 percent in 2011 and the dollar losing 6.5 percent. "At the margins it helps US exporters, and the US importers probably also increase profits as they're repatriated," said David Resler, chief economist at Nomura Securities in New York. "I don't see the dollar as having a significant intermediate-run effect on the performance of the economy." With Wall Street shaking off the dangers of a possible downgrade from S&P, the market is likely to prevail against any thought that it's time to start enacting policies that defend the currency. The only thing on the horizon that appears to be dollar-friendly is the end of the second leg of the Fed's quantitative easing program—or QE2—in June. Even then, the central bank is likely only to stop its $600 Treasury-buying operations. There are no indications that the Fed will be selling back into the marketplace any of the securities it has purchased, so a rise in rates is unlikely until inflation becomes more widespread and indicated through government economic metrics. "That's probably just a warm-up for a QE 3 program later on. All these things are undermining the fundamentals for the dollar," said Sean Hyman, currency director for World Currency Watch. "It doesn't help anything that commodities keep going through the roof. There are a few dynamics working in a concerted effort all at once, and that's killing it."[/quote] [url=http://www.cnbc.com/id/42703813]Source[/url]

I am okay with this. I assume it might lead to complications, but for now, CHEAP GAMES ON STEAM

Oh cool, glad I'm getting the fuck outta here.

[QUOTE=Honesty;29407741]I am okay with this.[/QUOTE] You shouldn't, a weak dollar has negative effects worldwide (unfortunately).

You know, I saw the title and I thought it was a Glaber thread. Surprised instead. And as for the weak dollar, I mean yea, we aren't really doing much to stop it.

[QUOTE=Honesty;29407741]I am okay with this.[/QUOTE] When the US economy crashed, the worlds economy crashed. When the US dollar is weak, the rest of the world will also follow...

[QUOTE=areolop;29407827]When the US economy crashed, the worlds economy crashed. When the US dollar is weak, the rest of the world will also follow...[/QUOTE] Currencies are relevant to each other so it's impossible for all money to be weak

Looking forward to order cheap products from America the coming years. America will become the new Asia.

£1 = $2 please.

[QUOTE=Zeke129;29407841]Currencies are relevant to each other so it's impossible for all money to be weak[/QUOTE] And currencies are tied down to market economies and lets see what's going on in the other major nations.

[QUOTE=farmatyr;29407857]Looking forward to order cheap products from America the coming years. America will become the new Asia.[/QUOTE] no it wont

Weak currency means prices will increase, not be cheaper

[QUOTE=VengfulSoldier;29407872]And currencies are tied down to market economies and lets see what's going on in the other major nations.[/QUOTE] Currencies will always be strong compared to some and weak compared to others, that's what I meant

VERY HAPPY TO BE A CANADIAN IN CANADA USING CANADIAN CURRENCY! /caps It's awesome, kinda like an investment knowing that the american dollar will eventually overcome the CDN.

[QUOTE=johan_sm;29407998]Weak currency means prices will increase, not be cheaper[/QUOTE] What are you talking about? More dollars for my euro's right?

[QUOTE=farmatyr;29407857]Looking forward to order cheap products from America the coming years. America will become the new Asia.[/QUOTE] This is probably one of the dumbest things I've ever read on Facepunch. And that's pretty god damn impressive.

[QUOTE=Sottalytober;29408575]This is probably one of the dumbest things I've ever read on Facepunch. And that's pretty god damn impressive.[/QUOTE] I'm sorry if I offended you. Have a good day/night.

[QUOTE=farmatyr;29408663]I'm sorry if I offended you. Have a good day/night.[/QUOTE] Ah that makes me feel bad.

You know, this isn't exactly a good thing for the rest of the world, neither. Let me give you the gist of it: Weaker dollar means less money in America. Less money in America means less consumers buying exports. Less exports mean less trade. Less trade means weaker world economy. There's a domino effect that will eventually mean harder economic times for the rest of the world, especially because America imports a very decent size more than it exports.

i'm loving this, for once i can afford to buy things from america without them costing a fortune right now its actually cheaper to buy from america

[QUOTE=ijyt;29407861]£1 = $2 please.[/QUOTE] I was when I visited America. My suitcase bulged with computer hardware.

[QUOTE=Fhenexx;29408771]You know, this isn't exactly a good thing for the rest of the world, neither. Let me give you the gist of it: Weaker dollar means less money in America. Less money in America means less consumers buying exports. Less exports mean less trade. Less trade means weaker world economy. There's a domino effect that will eventually mean harder economic times for the rest of the world, especially because America imports a very decent size more than it exports.[/QUOTE] Although other countries also import large amounts from the same sources as the US, such as the EU - if the Euro increases relatively, along with the Pound, then reduced import rates are liable to provide a boost to the economies in Europe.

American money makes good bookmarks sadly my economic skills were off as fuck and hoped to profit on the dollar

We need a Bill Clinton again.

Cheaper stuff on the interwebs :woop:

Does anyone else think the states should have their own currency in addition to a national currency? At least states would be in control of currency and wouldn't have to worry about the federal government devaluing it. Might lead to a few problems when you try to spend money on products and services out of your home state, but your currency could be worth more than a weakling dollar. Maybe people could just use gold and silver instead. The value of those precious metals tend to stay the same, your dollar does not.

[QUOTE=cqbcat;29409306]Does anyone else think the states should have their own currency in addition to a national currency? At least states would be in control of currency and wouldn't have to worry about the federal government devaluing it. Might lead to a few problems when you try to spend money on products and services out of your home state, but your currency could be worth more than a weakling dollar. Maybe people could just use gold and silver instead. The value of those precious metals tend to stay the same, your dollar does not.[/QUOTE] No. Because, most of the states are already in debt up to their necks and introducing 50 new currencies plus the USD would not make the situation better. It would make it worse.

[quote]In short, as trader Dennis Gartman noted Thursday, "the rout of the US dollar" is in full effect.[/quote] [IMG]http://i48.tinypic.com/2n1fhvq.jpg[/IMG] Ok.

[QUOTE=cqbcat;29409306]Does anyone else think the states should have their own currency in addition to a national currency? At least states would be in control of currency and wouldn't have to worry about the federal government devaluing it. Might lead to a few problems when you try to spend money on products and services out of your home state, but your currency could be worth more than a weakling dollar. Maybe people could just use gold and silver instead. The value of those precious metals tend to stay the same, your dollar does not.[/QUOTE] I'm pretty sure that would send both the 'federal' dollar and local currency spiraling into the ground. And gold and silver is great, but you'd end up turning it into currency anyway - and gold and silver fluctuate anyway. A country taking it as their currency could mess up the international markets far more than a single independant currency fluctuating.

How is this news? We've known about this for a loooong time.