How worried should we be about the USD declining to historic lows...

[steve2470]

and 7 countries thinking about using Euros instead ? From what I know, this would decimate the USA economy. Am I incorrect ? Thank you in advance for your time and patience, as always.

[The_Casual_Observer]

1. It makes the things we make here more competitively priced.

Let it keep sliding. In the end, it's all about selling stuff.

[MADem]

2. The tide comes in, the tide goes out... that's it. nt

[nadinbrzezinski]

5. You are wrong, look at the evolution of the Sterling

after 1944.. yes there was this little WW II to deal with... but when a currency stops being the main resserve currency the consequences are severe and it actually makes our debt far more expensive... as in... if our debt is denominated in Euros it willl go up by what fifty percent?

[The_Casual_Observer]

9. Don't you get tired of telling me I'm wrong all the fucking time??

Anyway, the UK is still around & going just fine, so what does that prove? Who made you the expert?

[nadinbrzezinski]

10. The UK didn't do well for a long time

and it took her about fifty years to recover... and not fully. The Sterling IS NOT a reserve currency

Look, I've seen what happens when major debt exists in a country and the national coin is suddnely devalued.. which effectively is what is going on right now.

It causes internal inflation

And if the Euro becomes the resserve currency our debt wil be pegged to the euro... effectively increasing it by fifty percent, overnight.

You think that's good? I know it's not.

Just trying to explain this... but the this will not be a problem is actually a right wing meme, trying to deflect from the real economic crisis.

[Chomskyite]

15. Yes that's nice.

Except . . . I just remembered. We don't MAKE anything here anymore, do we?

[tritsofme]

22. Odd then isn't it?

That the devalued dollar has been partially responsible for record exports?

We must be exporting something.

[nadinbrzezinski]

3. You are correct

it took the Sterling about 50 years to recover after it no longer was the currency of trade, which we took over as of 1944 with Breton Woods

[Rosemary2205]

4. Cheap dollars could mean more exports and more tourism.

[barb162]

6. V-E-R-Y

"While the weaker dollar boosts exports, it also raises worries on Wall Street about whether foreign investors may at some point start dumping their dollar-holdings because of the declines."
http://www.ndtvprofit.com/homepage/storybusinessnew.asp?id=41664&template=&cache=11/10/2007%2011:53:03%20AM

Also what if the Saudis and others decide they want their money in euros. That will hurt the US economy a lot.

[LynnTheDem]

7. His decision to switch to Euros got Saddam Hussein & his country killed.

How important is it to the US gov to be #1 in currency?

See subject title.

I'd be quite worried.

[sandnsea]

8. If the oligarchy is abandoning ship

because they've sucked everything out of the US they can, then it could be really bad. Or it might mean the people will rule themselves which might mean we will finally get the social programs we need. We shall have to see.

[Up2Late]

11. VERY, but since I personally have very few Dollars and it will REALLY piss off Independent and...

...blue collar Republican voters, maybe bad enough to destroy the illusion that the Republic Party is the party to support if you want to get rich, I'm sort of looking forward to a total economic melt-down which a total collapse of the Dollar will bring.

[nadinbrzezinski]

12. I'm not

starvation is not a nice way to go... and that would be the worst case scenario for many working people

The rich, it never hurts the rich

[Rosemary2205]

14. Ugh.

Not cool.

[soothsayer]

13. some industries will move back here (like movies are already moving back

from Canada). We're the new cheap labor pool.

[fasttense]

16. It is not just the dollar.

It is the sinking dollar, and the billions lost by the banks and finance houses through the sub-prime market. It is unemployment (the real numbers are horrible, not the numbers published by our gubermint), underemployment and outsourced jobs. It is the dwindling consumer market and the housing crash. The falling dollar alone wouldn't be so bad but add in the gubermint's budget and trade deficits, along with the negative personal savings rate and this country is just a depression/hyperinflation storm waiting to happen.

Even Wal-Mart is hurting. They have told their trucker at many Distribution Centers (DC) that they have the choice of hauling freight two states away or not at all, because the DCs don't have enough freight for the truckers to haul. When truckers are being turned away by Wal-Mart, you know a huge storm is brewing.

[gulfbreeze]

17. It scares me to death......

Read the "Shock Doctrine" by Naomi Klein. I have a feeling we've been set up for all of this in order to bring the economic "shock" here at home. I've not finished the book yet but looking at the history of the US experimenting with this doctrine on other countries and the pain the people suffered is just too much.

[undeterred]

18. It will wake up a lot of people at last as to what Bush has done to

this country.

[steve2470]

19. anyone else care to comment ? nt

[magellan]

20. Cheap money leads to inflation

The Fed has been printing money like it's going out of style to "reduce" our deficit. Banana Republics do that. Banana Republics are stupid enough to think that if you haven't got enough money you just print more of it, which is why Banana Republics don't last long, historically speaking. Because as everyone knows, the more there is of a thing, the cheaper its value. If you don't believe me, try to sell a toothbrush on eBay. Unless Britney Spears' DNA is on it, or there's something else remarkable about it, you're stuck with your toothbrush because everyone has one and can get another one easily.

Yes, a weak dollar does "shrink" our deficit, the way lower interest rates help people with debt. It makes our exports cheaper, and us an attractive tourist destination, which foreigners are grateful for. But being awash in dollars doesn't do the average working American any good, because his/her dollars buy less and less as the prices of imports go up and up, which they do because the dollar's value is falling against the currency of the foreign countries we import from. And we import a lot. Even those things that say "made in America" often have parts from abroad.

Anyway, that's my take on it from reading around the net. We're busted.

[nadinbrzezinski]

21. Or because they are forced to print that money by the IMF

trust me, have seen that one too...

And it innevitably leads to inflation, in a few cases hyperinflation and the perfect enviromnet for Friedman style "liberalization" this is being done by desing

[magellan]

25. Nadin, I think your post was cut off

Do you think we'll see hyperinflation? There's so much going on in the economy that's just plain B-A-D. I don't know whether we're going to spin off like an out of control top or just wind down and collapse.

Or both.

[upi402]

23. Check this link:

http://www.oftwominds.com/blognov07/empire-debt1.html

When the crooks in charge hid the M3 I tried to wake up the conservatives that I knew to the Republican treachery. They'd have none of it. Now I'd like to make a lowball offer on any gold they may be accidentally in possession of.

So anyway, derivatives look like the glue NOT holding this house of cards together.
A radio DJ always joked about Wall Street as legalized gambling. Hell, I wish the odds were that good now.

[magellan]

24. Yikes!

I'm one of those who has a very difficult time understanding the money markets beyond the basics (which are depressing enough). But what I was able to glean from your link suggests we're toes up and just waiting for the gravedigger to start shoveling dirt on us.

At this point I'd only enter the markets using a Republican's money.

[Lasher]

26. Good read. Reminds me a little of the Great Depression prelude.

People were investing in the stock market with money that was all borrowed. When stocks tanked they defaulted on their bank loans.

I think conservatives were aware of the sinister intent behind the M3 shell game, but have been determined to keep the rich getting richer as long as possible, at any cost whatsoever. I am struck by the irony of the label, 'conservative', and how it stands in stark contrast with the people it is meant to identify.