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Author Topic: where is the $ heading??  (Read 34273 times)

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velocicarpo

« Reply #50 on: April 30, 2011, 10:52 »
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I think it is not about the States vs the rest of the world. The degrading value of many Currencies including Dollar and Euro is barely deniable. It is more about what we could do about.

The inflation of the dollar based agencies wouldn`t hit us so hard if they would raise our commissions / prices accordingly. On the other hand it could be useful for the companies to simply switch to the euro. As someone else said, less then 10% of my buyers are from the US. Many people from around the world may not even notice the switch to euro since 1 buck is sort of 1 buck heheh, but the income would increase a lot.


« Reply #51 on: April 30, 2011, 12:08 »
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Its the National Budget Deficit and not the trade deficit that is weakening the dollar in my view...".

What evidence do you base that on?  Over the last 5 years the dollar has been higher and it has been lower against most international currencies (exception might be the Swiss Franc).  If there was any great fear of the dollar dropping badly interest rates should be going up but 10 year TBill is about as low as it has ever been in the last 40 years and the 30 year Treasury is at 4.40%!  If people are willing to lend the U.S. money at that rate for 30 years they must have some confidence in the dollar.

fred

There are doubts about the health of the country's economy even though Geithner as said We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy. . . . . . .  maybe.

S&P has recently suggested that that the United States' AAA credit rating could be downgraded.

The second-largest holder of Treasury debt, China, has stepped up rhetoric hinting that they might diversify their massive $3 trillion of currency reserves away from U.S. dollars.

Alan Greenspan has even attributed the dollar's weakness to large Federal budget deficits.

And who is buying all those government bonds.  The Fed has bought up hundreds of billions of dollars of  long-term U.S. Treasuries (QE2)

I am not asking for more opinion.  I am asking for more evidence.  Your sources of opinion are even very dubious.   Just look at the securities S&P was rating as AAA in the 2008 (AIG, Lehman Bros.,  etc.) and taking Alan Greenspan's investment advice is like taking Liz Taylor's advice for a long marriage.  He denied there was a housing boom until late 2008 and promoted 30 years of deregulation that led the the financial crash.  Not a good source. 

The Chinese are double dubious.  They need a strong dollar to both keep up the value of their TBill holdings and keep their currency undervalued to maintain the unbalanced trade situation.  They have no reason to reverse either of these policies but should they change their mind it would be more beneficial to the U.S. economy.

As far as the FED purchases go, they have made it clear that they will be stopping soon so if there were great expectations of that causing an appreciable upward bounce in TBill rates there would be a lot of selling now.  That just is not happening so the evidence is that QE2 it hasn't been very effective.

I am not saying the dollar is going up or down all I am saying is that the evidence I know of shows a great deal of confidence in the long run stability of the dollar.

fred

« Reply #52 on: April 30, 2011, 12:16 »
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Oh and while the Japanese budget deficit has climbed to 200% of GDP the Yen has only become stronger.

fred

« Reply #53 on: April 30, 2011, 12:34 »
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The second-largest holder of Treasury debt, China ...


The second largest holder of US debt is the US Social Security Trust Fund (appx 18%). The largest holder of US debt is US institutions and ultimately the US public (appx 42%). See here for a chart etc.

Appx $4.5 trillion of the debt is non US owned. Meaning that appx 2/3 of US debt is held by the US itself and its citizens.

China holds $1.154 trillion of US debt according to this Reuters report from 24th April 2011.

According to the same report the total debt is $14.3 trillion. China therefore holds only appx 8% of the total debt.

velocicarpo

« Reply #54 on: April 30, 2011, 13:36 »
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The second-largest holder of Treasury debt, China ...


The second largest holder of US debt is the US Social Security Trust Fund (appx 18%). The largest holder of US debt is US institutions and ultimately the US public (appx 42%). See here for a chart etc.

Appx $4.5 trillion of the debt is non US owned. Meaning that appx 2/3 of US debt is held by the US itself and its citizens.

China holds $1.154 trillion of US debt according to this Reuters report from 24th April 2011.

According to the same report the total debt is $14.3 trillion. China therefore holds only appx 8% of the total debt.


Only 8% ! I thought it was much more since the markets are soooo hysteric about it ...

WarrenPrice

« Reply #55 on: April 30, 2011, 14:54 »
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Between Military Retirement and Social Security (my entitlements), I manage to fill my truck with diesel fuel.   :P

Oh... I'm starting to see some microstock subsidies.   ::)
What else can we bash today.  Religion hasn't been attacked lately.   ;D

« Reply #56 on: April 30, 2011, 16:20 »
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Some good info in this thread about how the weakening dollar affects us, the microstock suppliers. But how does it affect the non-US microstrock buyers?

I wonder for example: If the dollar starts to get stronger against the euro, how would that affect SS subscription sales in Germany? How would PPD sales at DT be affected if the dollar weakens against the Braziliain currency, for example? Or would such currency fluctuations have no effect?

« Reply #57 on: April 30, 2011, 17:16 »
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Some good info in this thread about how the weakening dollar affects us, the microstock suppliers. But how does it affect the non-US microstrock buyers?

I wonder for example: If the dollar starts to get stronger against the euro, how would that affect Shutterstock subscription sales in Germany? How would PPD sales at Dreamstime be affected if the dollar weakens against the Braziliain currency, for example? Or would such currency fluctuations have no effect?

Sure it would affect it. basic micro economy rule, price goes up, demand goes down. the low $$ rate is good for buyers and bad for sellers (if both are ex-US).

« Reply #58 on: May 01, 2011, 10:43 »
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The Dollar will crash. No doubt. Even if you live in the US you will have to deal with a high inflation.
Personally I cannot understand why the stock companies stay in the US. IRS Problem, a weak Dollar etc.

The US is already seeing inflation.  Gas, food, medical, clothing and utility prices are rising and many people are still out of work thus losing their homes to foreclosure.  I think you are right the dollar will continue to weaken.

« Reply #59 on: May 01, 2011, 11:30 »
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The dollar will go down, you better change your currencies right now.

« Reply #60 on: May 02, 2011, 09:45 »
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The dollar will go down, you better change your currencies right now.

Actually, if you are really confident that the dollar is going down you should borrow dollars and convert them now and pay them back with the weaker dollars you get from your sales later.  You have to borrow at low interest rates of course.

c h e e r s
fred
« Last Edit: May 02, 2011, 09:47 by Fred »

WarrenPrice

« Reply #61 on: May 05, 2011, 17:22 »
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« Reply #62 on: May 06, 2011, 14:17 »
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The dollar will go down, you better change your currencies right now.

Actually, if you are really confident that the dollar is going down you should borrow dollars and convert them now and pay them back with the weaker dollars you get from your sales later.  You have to borrow at low interest rates of course.

c h e e r s
fred

True. I thought about this many times. Without doubt it will devalue. Even in a stable environment...

« Reply #63 on: May 07, 2011, 06:37 »
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Leave your money on Moneybookers or on Paypal if US dollar is your account currency and wait for a better time...
Probably next week will be better...

So, what was I told week before? Dollar goes up!

« Reply #64 on: May 07, 2011, 07:22 »
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The dollar will go down, you better change your currencies right now.


Actually, if you are really confident that the dollar is going down you should borrow dollars and convert them now and pay them back with the weaker dollars you get from your sales later.  You have to borrow at low interest rates of course.


True. I thought about this many times. Without doubt it will devalue. Even in a stable environment...


The problem is which currency to buy.  The Euro looks very shaky to me.  They have to do something about Ireland, Greece, Spain and Portugal.  Germany needs to keep the Euro low to maintain their exports.   You  might try the Renminbi but who knows that the Chinese government will do to keep it low.  The Yen has always been strong but with Japan's latest natural - and unnatural disasters - what is going to happen now? You also need to keep in mind the historical perspective.  The Real Effective Exchange Rate - inflation adjusted exchange rate measured against a basket of trade weighted currencies - of the dollar is right now about where it was in 1979 (see: http://krugman.blogs.nytimes.com/2011/05/04/falling-dollar-phobia/).  It could get stronger.  It did then.

Good recent article on the Euro problems: http://www.nytimes.com/2011/04/17/business/17view.html?_r=1

You pays your money you takes your chances!

c h e e r s
fred
« Last Edit: May 07, 2011, 07:46 by Fred »

« Reply #65 on: May 07, 2011, 08:17 »
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After large budget deficits in the Reagen and  Bush One years President Clinton not only balanced the federal budget but handed off projected surpluses well into the future.  Of course Bush 2 said hey, look at all this extra money, lets have a tax reduction for the very rich . . .  and while we are at it lets have two wars off budget

The Euro was initially pegged at $1.17 to 1 Euro (2001?) under the belief that sanity would continue in America.  Just look at the graph and you will see what bad politics can produce.
« Last Edit: May 07, 2011, 08:21 by etienjones »

« Reply #66 on: May 07, 2011, 08:24 »
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Bitcoin looks like a very interesting currency option currently. Unless govts decide to try to do something to stop it.

jbarber873

« Reply #67 on: May 07, 2011, 08:28 »
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     Currency trading is a very difficult game to play. First of all,because  currency moves are very small, even on a "big" day, to make any money, you have to be leveraged, which means if a trade goes against you, your losses can be magnified. Second, you are playing against huge trading desks at banks and brokerage house , and hedge funds, with the ability to move in seconds on a massive scale. And third, there is no such thing as insider trading in Forex, any knowledge a company has about a client move can be used for profit. You're in a market that does not always, or even often, move fundamentally. George Soros made a ton of money betting against the pound, but he took losses for a long time , and the British government intervened heavily against him before he finally won the bet. Foreign exchange is not the place for a retail investor. If you really plan to try trading currency, read a book by Marc Chandler, head of Forex at Brown Brothers Harriman, called "Making Sense of the Dollar". You'll think twice about trading currencies.

« Reply #68 on: May 07, 2011, 09:13 »
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The US dollar follow the country debt, but in reverse. It goes down when the debt get higher. 

The actual raise is only a temporary one, due to the oil price variation.

« Reply #69 on: May 07, 2011, 17:01 »
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At one point (in 2008) I got Au$1.42 per U$1, now I am getting $0.90.
It is great for buying gear out of the states, but of course having taken a pay cut (even compared to earlier this year) I don't have any extra cash to buying gear with :)
Someone on the radio (dont know who they were a financial analyst, said about 2 weeks ago they wouldn't be surprised to see au$1 = US$1.5, so I will get around $0.66 if becomes true) :(

« Reply #70 on: May 08, 2011, 01:20 »
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As long as we keep printing money, we will kill our currency, and a lot of our exported inflation is coming back to the US.... the dollar will die, or we will have 30% interest rates - either way the US hasn't even begun to feel the economic pain waiting for it.


 

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