which economical reasons you can give to explain the depreciation of a US dollar to most other currencies?

Question

Student at Saint Petersburg state universty.engeering and economics universty.I am donig economics and real estate.first course.my adress is Novoismaylofsky hostel number 6.dom 8/2 index 196128.room 202.Russia Saint petersburg.

Answer 1

I saw a news report about this and in the simplest terms, this financial consultant was implicating American citizens overspending nature to the falling value of the dollar.

Personally I like the theory about the war.
Too much money is spent on War Mongering and not enough on medecine.

Answer 2

Massive fiscal, budgetary and personal debt are the main reasons. A situation that worsens by the day. These debts have to be funded by savers from other countries, mainly from the far east.

The weakening US dollar merely reflects the seriousness of US debt. Those who fund these deficits by continuing to buy US goverment bonds need to be protected against the risk of further falls. That is why it is necessary to keep raising interest rates in order to provide adequate rewards to the lenders and to try and protect the dollar.

I believe, however, that the US has been protected from its own profligacy for a number of years by a paradoxical juxtaposition with creditor nations. Allow me to make an analogy-

If I owe you a dollar, I have a problem. If, however, I owe you a million dollars, then you have a problem. If I can't afford to repay you, what do you do? If you pull the plug on me we both sink. So you are trapped into supporting me.

This has been the position for a number of years, but it cannot go on for ever. The problem simply gets bigger.

The US and Britain have pursued a cheap money policy for a number of years which has encouraged profligate borrowing and spending. This has made the economies appear strong but it has been on the back of unsound money.

House prices in both the US and Britain have been pushed up to ridiculous levels, providing further borrowing opportunities to enable binge spending. Incidentally, at least as regards Britain, inflation has not been beaten, it has simply moved to other places. House prices, public expenditure, taxation and other items conveniently left out of the inflation measure, such as petrol, are examples.

Goverments, of course, have been well aware of the true situation, but, because they want to get re-elected have allowed the public to go on binging like greedy little children.

Unfortunately, their chickens are coming home to roost. Their only hope is to try and blame it on something else or create a diversion. The Iraq war or Global warming might do it. But there will be no avoiding the pain.

Answer 3

There are several things that are causing the dollar to fall.
1. the balance of trade deficit is one of the very important causes. The U S imports much much more than it exports.

2. the budget deficit. The U S government is spending much much more money than it is taking in in taxes. They are borrowing the remainder from foreigners

3. unfunded liabilities. That is money that the nation will owe in the future that it has not set aside to pay. They are astronomical.

The only thing that has prevented the dollar for totally collapsing is the the Chinese and Japanese governments are supporting it because their trade with the U S depends on a strong (relatively) dollar and higher interest rates in the U S causing foreigners to move their money into U S debt instruments. They may wind up being very sorry about that.

Answer 4

Underlying the abovementioned short-term factors are also the twin deficits, the ageing population and the strain of social benefits. all these transpire to make the US less competitive - a long term trend. Over the short term there will be ups and downs influenced by day to day events, but generally BRIC and other third world countries will perform better than the old and first world countries for the next 30 to 50 years.

BRIC - Brazil, Russia, India and China.

Answer 5

the main reason for depreciation of a US dollar with most other currencies is not economic...and it has already been answered by many
The International Policies of USA (the nose poking attitude of US)
The war against Iraq
The war against Afghanistan

Answer 6

the currency depreciates for one and only one reason - weakening economy. the reason for decline are multitude:

1) high debt - US government has been selling billions of dollars of bonds to Chinese to fund govt spending

2) anticipated higher interest rates - this will slow down growth as consumers will spend less

3) balance of trade deficit - in order to sell more abroad (i.e. increase exports) a weak dollars helps - foreigners get more for their money and order more. plus more tourists.

4) chinese govt has increase rates - more ppl are switching money their, plus chinese economy offers better prospects

5) economic stats - last friday (non-farm payroll). job growth wasn't strong.

6) mergers and acquisitions - more M&A activity in europe

7) oil prices - higher oil prices affect US more becoz US consumers & biz are more dependent on it. this'll cause lower growth.

Answer 7

We have an idiot for a president who likes to use his master card too much.
And i don' t a hoot in hell where you live fella'! Didn't like the personal stuff, but your question was very good one so I answered! Be careful giving out your personal info like that!
Unless you are a perv, you have to watch out or you will attract one!

Answer 8

Это же баян: чем дешевле бакс, тем выше конкурентноспособность америкоидных товаров.

Answer 9

the war in iraq, the worldwide discontent on US international policies, the iran standoff.

Answer 10

Iraq war.
Every war is expensive, and the economy feel that!