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FourScore Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:15 AM
Original message
The dollar has lost 1/3 of its value
And its spiral ever lower is accelerating.

SNIP

We’ve posted this before - but as the ailing US currency drops through $1.47 against the euro and $2.10 against sterling, it merits a second (and updated) airing.

The chart comes from Sempra Metals, who make a couple of additional points:

* The US dollar has now lost more than a third of its value (-35%) against a basket of major currencies since Feb 2002.
* The decline is accelerating. The USD has shed 2.5% of its value in the last year, 3.5% in the last month, and 1.5% in the last week alone
.



The impetus for this morning's fall was comments overnight indicating that China might further diversify its reserves away from the US dollar.

http://www.dailykos.com/story/2007/11/7/6253/92569
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Captain Hilts Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:17 AM
Response to Original message
1. It's tanked vs. the Canuck Buck and the Pound. Thanks George! nt
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Doctor_J Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:18 AM
Response to Reply #1
17. and the yen, euro, yuan, franc
This is Naziism 101 - ruin the dollar to

1. Make money for the rich and corporations
2. Pay off our trillions in debt using worthless paper.
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spanone Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:19 AM
Response to Original message
2. junior says we have a robust economy....would he lie?
:sarcasm:
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midlife_mo_Jo Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:19 AM
Response to Original message
3. Time for the good news
Edited on Wed Nov-07-07 10:20 AM by midlife_mo_Jo
At this rate, the dollar will have such little value that other countries might find it cheaper to buy products "Made in America."

Just think, we can have our own Nike and Gap sweatshops right here in the good ol' U. S. of A, but then your minimum wage job probably won't even buy a loaf of bread.
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Fredda Weinberg Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:20 AM
Response to Original message
4. I remember this from the 80's ... it's a dirty trick
Only governments can devalue currency - arbitragers can manipulate a market but only in the short run. This deliberate policy is necessary to keep the game going.
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FourScore Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:33 AM
Response to Reply #4
7. Huh?
Can you expound on this a little? I don't get it.
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Fredda Weinberg Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 02:00 PM
Response to Reply #7
31. Macro economics ... how technical should I get? n/t
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JVS Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 03:39 PM
Response to Reply #4
39. Devaulation of currency can only happen in a "semi-fixed" system like Breton Woods
Currency speculation of the type you're talking about is not possible. Ever since Nixon withdrew us from the Breton Woods agreement (which collapsed without us), currencies have been floating.
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SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:20 AM
Response to Original message
5. "You were expecting more of me and my republicon cronies?" - Commander AWOL
Edited on Wed Nov-07-07 10:22 AM by SpiralHawk
"You were really expecting us to be somewhat halfway competent around responding to the dollar's total freaking collapse? Snarf. Smirk. Chortle. Apparently you and the other proles* just don't get it yet about us republicon homelanders. Snarf. Smirk. Chortle."

- Commander AWOL Bush



* Proles - formerly known as human beings who happened to be citizens of the United States of America
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 03:59 PM
Response to Reply #5
41. O.M.G. that picture. n/t
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sinkingfeeling Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:21 AM
Response to Original message
6. So, oil is really only $65 a barrel. Aren't we so lucky to have the great Bush economy?
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Captain Hilts Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 02:42 PM
Response to Reply #6
35. Oil is sold/pegged in US dollars. nt
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mainegreen Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:34 AM
Response to Original message
8. Probably that would explain my getting 15-25% ytd returns on investments lately.
WTF? Insane.
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 10:41 AM
Response to Original message
9. There are pluses and minuses to this
Pluses:
1) The debt that we owe China and other countries is dollar denominated. Paying that debt back "costs" less.
2) Goods we export are cheaper and their sales will increase.

Minuses:
1) Imports (like oil) are more expensive.
2) Foreign investment will likely drop because nobody wants to invest in a country whose currency is falling against theirs.
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progressoid Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:04 AM
Response to Reply #9
10. Too bad we import so much more than we export.
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:22 AM
Response to Reply #10
18. If the dollar continues to drop
...that may no longer be true.
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:29 AM
Response to Reply #18
19. The high cost imports to the US are also essential imports
oil, natural gas, electricity, water. One may be able to avoid buying imported lumber and Chinese-manufactured toys but not those essential imports I listed. The US is no longer an economy based on manufacturing, it is an economy based on credit which is why the current slide is SO steep.
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:37 AM
Response to Reply #19
23. And a good thing too
An economy based on manufacturing suffers much more from rises in energy costs. As oil prices spiral out of control, I would hate to be an economy reliant on manufacturing for most of my economic activity.
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 12:38 PM
Response to Reply #23
25. I suggest you read this speech by Krugman, it is very educational
especially given the "double bubble burst", the housing market and the slide in the dollar, that has occurred in recent months.

http://www.econ.princeton.edu/seminars/WEEKLY%20SEMINAR%20SCHEDULE/SPRING_05-06/April_24/Krugman.pdf
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 01:17 PM
Response to Reply #25
27. That paper is a year and a half old
The dollar decline he describes has already happened.
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 02:09 PM
Response to Reply #27
33. Hmmm, did you read the part about what would happen if...
there were to be a double-bubble burst, that being BOTH a housing meltdown AND a steep decline in the dollar? I suspect you did not or you would have mentioned both the housing meltdown AND the dollar decline in your post.

You seemed to have totally missed the key point that the fact that the article IS from 2006 and the worse-case scenario he was talking about has NOW happened, in spades.
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MLFerrell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:08 AM
Response to Reply #9
12. Speaking of exports...
I wonder what the volume of American exports is now compared to twenty or thirty years ago...

I also wonder how sharp the decline in the export of American manufactured goods has been over a similar period.

Electronics and steel spring immediately to mind.
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:34 AM
Response to Reply #12
21. Manufacturing
The dollar value of exported manufactured goods has doubled in the last ten years. The reason the manufacturing sector gets such a bad rap is because of job losses, not dollar losses. Broadly speaking, manufacturing is the most successful aspect of our economy. It produces the best return on investment and generates more revenue than any other sector. The irony is that its success is largely due to automation, which has caused the job losses.
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 12:40 PM
Response to Reply #21
26. Huh???? You just said the said the total opposite in a previous post...
"An economy based on manufacturing suffers much more from rises in energy costs. As oil prices spiral out of control, I would hate to be an economy reliant on manufacturing for most of my economic activity."

Which is it???
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 01:22 PM
Response to Reply #26
28. They are both true
1) The US economy is NOT based on manufacturing.
2) Manufacturing exports have doubled in the last ten years.

Those two statements are not contradictory in the least, and I fail to see why in the world you would think they are.
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 01:36 PM
Response to Reply #28
29. LOL, ooookay n/t
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 03:35 PM
Response to Reply #29
38. What is so funny?
All I can assume is that you are bad at math...
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 03:55 PM
Response to Reply #38
40. LOL, seeing as you provided NO math in your posts, it is a little difficult
Edited on Wed Nov-07-07 04:09 PM by Spazito
to be bad at something that hasn't even been provided for one to be good or bad at. I note you tend to pontificate without statistical data to back up what you espouse. Again, you seem to want to ignore the "math" in Krugman's speech and, with all due respect, I bet his "math" skills beat both yours and mine by a whole hell of a lot. I haven't seen your math skills, I have seen his, case closed, imo.

Edited to add: a little info for your edification as to imports/exports in 2006, I suspect you will find the "math" interesting:

http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 05:27 PM
Response to Reply #40
45. I'll make it simple
10.8% of all Americans work in the manufacturing sector. Therefore, our economy cannot be considered to be "based" on manufacturing.

In 1996, manufacturing exports were slightly more than 50 billion dollars a month, now they are almost 100 billion a month.

http://www.nemw.org/mfgfact.htm
http://www.bls.gov/iag/manufacturing.htm

So you see, it is completely possible for our economy to not be based on manufacturing while simultaneously having manufacturing exports double over a ten year period.

QED
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Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 06:35 PM
Response to Reply #45
46. This is nice but is really irrelevant to the larger question
and your charts don't show what you have stated:

In 1996, manufacturing exports were slightly more than 50 billion dollars a month, now they are almost 100 billion a month.
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OzarkDem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:10 AM
Response to Reply #9
15. Then any good economist would tell you
now is the time to balance the budget and start paying off the debt. Start by getting out of Iraq.
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Nederland Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:37 AM
Response to Reply #15
24. Agreed (nt)
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GOPBasher Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 06:49 PM
Response to Reply #15
47. That's just insane.
Why would we want to do good things that would help our children live a better life? :shrug:
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Lone_Star_Dem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 02:51 PM
Response to Reply #9
36. Another important minus
It becomes increasingly difficult to peddle our debt to other countries.
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AngryAmish Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 04:05 PM
Response to Reply #9
43. American assets are cheaper for foreigners
One thing keeping NY real estate above water (I'm told) is many foreigners are buying now. American companies are cheaper to purchase. This is foreign investment also.
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Doctor_J Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:07 AM
Response to Original message
11. Yes the DJIA "growth" that the Repukes are always talking about
is in Bushbucks. The DJIA is behind where it was in Jan 2001 in terms of pounds, yen, yuan, euros, francs.
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info being Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:10 AM
Response to Reply #11
14. exactly
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info being Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:09 AM
Response to Original message
13. And it would be so, so simple to fix if they wanted to
The US needs to announce that it is rapidly moving to a balanced Federal Budget Deficit. No more ridiculous war spending until we get things right. The dollar would surge on the news.
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Johonny Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:13 AM
Response to Original message
16. Oh please
EVERYONE knows that this is due to the Clinton dot com bubble bursting. This has nothing to due with massive deficit spending on a pointless war, massive borrowing, and giant tax cuts for the rich.
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JackORoses Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:29 AM
Response to Original message
20. Put W's face on the Dollar, he owns it and is taking it down with him
I bet George Washington would like to have W and a Hot Iron to himself for a few minutes.

It wouldn't hurt any more than a cigarette burn, I'm sure...
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FunkyLeprechaun Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 11:37 AM
Response to Original message
22. As an American living full-time in Britain
I'm looking forward to shopping in the US in a few days time when I visit my family for thanksgiving. I'm thinking of a number of things (including looking into buying the Wii gaming console, which I really want!)

Need to get cracking on a list of things to buy... lots of clothes among them!! :-)
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14thColony Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 04:27 PM
Response to Reply #22
44. You are in a great position
Sadly I'm not quite so lucky. I too live in Britain full-time, but still get paid in US Dollars. Things are a-gettin ugly! I'm converting as many dollars as I can into pounds - managed to get quite a lot into pounds before it crossed the 2:1 barrier at least. I'm thinking of buying second-hand Monopoly sets at the flea markets as an investment as well - I figure at the current rate even Monopoly money will start rising against the Dollar!

I REALLY need to get a job where I get paid in some stable currency, like...well, anything but the Dollar basically.
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taught_me_patience Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 01:42 PM
Response to Original message
30. It makes traveling to Europe very expensive
I feel like I'm stuck in America (too expensive to travel out of the country) and am watching the decay of our once great society from the front row.
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wiggs Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 02:08 PM
Response to Original message
32. Reinforces the thinking that the stated, official 2-3% inflation rate is a crock. nt
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killbotfactory Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 02:09 PM
Response to Original message
34. Who benefits from this?
I can only believe this is being done intentionally.
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entanglement Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 03:21 PM
Response to Reply #34
37. Exporters - for one
Multi-national companies with large scale operations outside the US, for another - their overseas earnings translate into more $$$ when converted.
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B Calm Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-07-07 04:02 PM
Response to Original message
42. Damn.. I remember a time when the Canadian dollar was worth less than ours..
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