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Thread: Dollar continues to Decline

  1. #1
    ColleenC1
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    Dollar continues to Decline

    The dollar dropped the most in a week against the euro in the wake of news that the United Arab Emirates intends to convert some of its reserves of U.S. assets into the European currency.


    Is anybody worried, with the China having about 3 trillion of U.S. currency threatning to dump it.

    Now with the United Arab Emirates intended to convert its reserves.

    I am, I have a little Swiss gold, but not much, What's your thoughts on the situation?

  2. #2
    Vulture of The Western World Eric's Avatar
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    Re: Dollar continues to Decline

    Yes, I am.

    The US is, in my opinion, in the same position (roughly) that Great Britain was at the beginning of the 20th century. That is to say, we are a declining - and over-extended - power that will soon be eclipsed by emerging new power(s)...

    I am glad I have already got most of my financial ducks in a row.... unless the Chinese actually take over the country physically, that is!

  3. #3
    Senior Member Mase's Avatar
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    Re: Dollar continues to Decline

    The good news is that U.S products become less expensive on the world market. Should help the balance of trade. China needs to let their own currency float on the money market.
    A man's greatest mistake is to think he is working for somebody else.

  4. #4
    ColleenC1
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    Re: Dollar continues to Decline

    The chief worry is that if China's central bank -- the largest foreign holder of U.S. dollars -- begins to unload its reserves, the dollar will plunge. With China's yuan effectively pegged to the dollar, other leading currencies would move higher after the realignment.

    There's no evidence yet that's what China is actually doing. But few investors want to be the ones left holding dollars when the plunge comes. "People are getting very nervous," said Andrew Busch, chief foreign exchange strategist at BMO Nesbitt Burns in Chicago.


    Your information is 2005 news, times are changing quickly

    http://www.theglobeandmail.com/servl...Story/Business
    November 28, 2006


  5. #5
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    Re: Dollar continues to Decline

    Iran has also announced they're converting their reserves from dollars to euros.

    By itself, this news rates a "ehh, so what?", but if it starts a trend amongst the smaller nations, it could significantly drop the value of the dollar.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

  6. #6
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    Re: Dollar continues to Decline

    >> Is anybody worried, with the China having about 3 trillion of U.S. currency threatning to dump it. <<

    I haven't heard of any threats to dump but that could be just me. My notion is that China is not about to fiddle with currency rates (or dump) for fear that the present prosperity might be damaged. The US, quite unintentionally, made a mess of the Chinese economy around 1934 by changing the US value of silver, or so some think; Friedman was inclined in that direction although he cites others who felt it was not so.

    There is no reason to hold Swiss gold in preference to any other. Buy Krugerrands if you want gold, I believe that they are the cheapest way to have the metal in a quickly usable form.

  7. #7
    ColleenC1
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    Re: Dollar continues to Decline

    I haven't heard of any threats to dump but that could be just me. My notion is that China is not about to fiddle with currency rates (or dump) for fear that the present prosperity might be damaged. The US, quite unintentionally, made a mess of the Chinese economy around 1934 by changing the US value of silver, or so some think; Friedman was inclined in that direction although he cites others who felt it was not so.

    Check out the website
    http://www.theglobeandmail.com/servl...Story/Business
    November 28, 2006

    There is no reason to hold Swiss gold in preference to any other. Buy Krugerrands if you want gold, I believe that they are the cheapest way to have the metal in a quickly usable form.

    I bought Swiss gold back 1995 and the reason I did was it had a guarentee on the rate of return. The value has since doubled which is good for me. I was leary about Krugerrands because of the sudden influx years ago of the Krugerrand, I would like to know more... if you would like to elaborate

  8. #8
    Vulture of The Western World Eric's Avatar
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    Re: Dollar continues to Decline

    I'd like someone to explain what use a lump of gold would be in the event of a major economic collapse in the US?


  9. #9
    mrblanche
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    Re: Dollar continues to Decline

    Quote Originally Posted by Eric
    I'd like someone to explain what use a lump of gold would be in the event of a major economic collapse in the US?

    It might or might not have a value, depending on just how far an economy collapsed.

    You want a hedge fund? Buy a fifth of good scotch, vodka, gin, etc., every week and find a good, safe storage place for it. Keep with it a stash of "do-it-yourself" books on farming, mining, smelting, animal husbandry, etc.

    Those two items will always bring a high value.

  10. #10
    Vulture of The Western World Eric's Avatar
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    Re: Dollar continues to Decline

    "You want a hedge fund? Buy a fifth of good scotch, vodka, gin, etc., every week and find a good, safe storage place for it. Keep with it a stash of "do-it-yourself" books on farming, mining, smelting, animal husbandry, etc.

    Those two items will always bring a high value."

    I agree!

    And that's more or less just what I have done. We own our house - out in the country - free and clear. We could live off the land (and off the grid) in reasonable comfort, if it came to that. I have supplies sufficient for a couple of months - food and ammunition and so on. Plenty of water (we're on a well and so not subject to the failure of infrastructure on that count).

    I'd much rather have the above than a heavily mortgaged McMansion in the suburbs and a bag full of Krugerands!

  11. #11
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    Re: Dollar continues to Decline

    If a country was going to massively dump the US currency on the market, they wouldn't do it by making a big announcement. They'd surreptitiously feed their dollars into the market gradually, and only when other currency traders wised up to the move, would they sell large quantities, in order to get the most for their trades.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

  12. #12
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    Re: Dollar continues to Decline

    To ColleenC1

    >>Check out the website http://www.theglobeandmail.com/servl...Story/Business
    November 28, 2006 <<

    The article has go into the 'pay for' bin so I didn't look at it beyond the first couple of lines - a web search suggests that the source is 'iffy' and in any case, the removal of the fixed exchange rate seems to be what the US wants.

    >> I bought Swiss gold back 1995 and the reason I did was it had a guarantee on the rate of return. <<

    Were you buying Swiss francs, coins? The Krugerrand is simply a coin with an accepted gold content which costs very little more that the value of its content.

  13. #13
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    Re: Dollar continues to Decline

    We could live off the land (and off the grid) in reasonable comfort, if it came to that. I have supplies sufficient for a couple of months - food and ammunition and so on. Plenty of water (we're on a well and so not subject to the failure of infrastructure on that count).

    Emulating the LDS, are you? There's nothing wrong with that.

  14. #14
    DonTom
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    Re: Dollar continues to Decline

    If a country was going to massively dump the US currency on the market, they wouldn't do it by making a big announcement.

    I agree. It only makes me wonder why they made the announcement. Often, people claim to do the opposite of their plan when the false claim can increase their profit.

    I remember several years ago when some rich organization was claiming they were going to be buying many millions of dollars worth of rare coins. It made the prices go up, so they could then sell theirs at a much higher price. Obviously, the true intent was to sell, not buy, from the very beginning.

    Remember, this world runs on BS. If you wanna get rich, learn how to control the BS factor.

    -Don-

  15. #15
    Vulture of The Western World Eric's Avatar
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    Re: Dollar continues to Decline

    "Emulating the LDS, are you? There's nothing wrong with that. "

    Being prepared doesn't mean I also believe in golden tablets, polygamy or the "prophet" Hinckley, etc!


  16. #16
    ColleenC1
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    Re: Dollar continues to Decline

    I own certificates in gold, it is a hedge against the devaluation of the dollar.

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