Why is the USA $ weak?check its loss of value on international exchange.?

Question

in answer to many questions on the Answers site people say the USA.econimy is not failing.

Answer 1

It most certainly is failing/has failed. Massive, and getting bigger by the day, fiscal deficits, trade deficits, personal borrowing on both credit cards and mortgage borrowing against grossly inflated house prices. The US, as in Britain, is raising interest rates, not because of inflation, but to stop further irresponsible borrowing by younger people who have no fear of debt. It has also been done to protect the dollar, so that buyers of US government bonds obtain a return consistent with the currency risks they are taking.

Those that say the US economy together with the British economy, is not failing, haven't a clue what they are talking about.
House prices have become so important in both our countries that everyone is talking them up. Both governments are culpable because, by following an irresponsible low interest rate policy, they have brought about massive increases in spending on credit and have sent house price inflation through the roof. In short, we have created a generation of irresponsible borrowers and spenders at both personal and national level.

Moreover, we are increasingly unable to compete on world markets.

Answer 2

Do you know the story of the Emperor's new clothes. The dollar was backed by gold reserves until 1971 or was it 73. Under that scenario (with a fixed rate for gold) governments could only print so much money. When the two were delinked and the gold price allowed to float it gave the government free rein to print more money. Under Bush this printing has ballooned. Asia (China Japan Taiwan etc) and opec countries hold vast amounts of dollars for two reasons. One is the US agreeing to support Saudi Arabia in return for them agreeing to sell oil in US dollars. The US has also used its economic might to force other commodities to be priced in dollars. These dollars have to be recycled and most went into US Treasury notes. Places like China have bought Treasuries to allow the US to buy their goods on credit. Because the US is highly protectionist in terms of allowing foreign ownership of businesses certain countries are saying f*ck the US we'll start selling things in euros and start winding down our dollar reserves (percentage of foreign reserves). Do you know that saying If you owe the bank a million dollars and you can't pay you should be worried, but if you owe 100 million its the bank that needs to worry. The size of the US debt is making people worried hence the rally in gold (a safe haven interchangeable with any currency). People are worried that the US won't be able to pay it's debt. If Treasuries become unattractive the only way to make them more attarctive is to put up the interest rates. This negatively impacts the US economy and so the cycle begins. Currencies in the end are no different from any other commodity in terms of supply and demand. Supply keeps increasing and demand keeps falling implies a fall in price. There are many economic commentators that view many third world countries as having better controls over their finances than the US. I read somewhere that Bush has said that the figures are "just numbers". From the first president holding an MBA. Astounding. Words like that do not fill people with confidence that he has any grasp of the problem. The $8 trillion your country owes is the simple figure. A treasury committee has calculated US debt worked out on an accrual basis to be closer to $79 trillion. Now you tell me what your nation is worth and subtract this from it. I would be asking why is the dollar so strong it has a long way to go and its downhill. Reference to the emperor's clothes Most householders are in debt using their houses as collateral. As interest rates go up this will unwind. As more people sell or have their houses repossessed so prices will fall. People will have to sell stocks to stay afloat but fewer people own stocks than in the 90s. Get the picture. The more people realise the above the sooner it will happen but because the media is so tightly controlled in the US by big business interests you'll just keep hearing good news until its too late. Buy some gold and start praying - and I'm an atheist.

Answer 3

The more dollars the US prints the weaker it gets. Unless of course all the other countries print money willy nilly too. Some countries are a special case like the UK. being an island we have a housing and property shortage and so can print loads of money - and it doesn't slush around in the economy - people use it to pay their high mortgages on property in the hope of retiring owning million pound homes. One day everyone in the UK will be a millionaire and a pint of beer will cost £1,000. There's always a catch!

Answer 4

Black Sabbath got no clue. The euro zone and sterling are riding high and the green back is in the gutter at the moment. The US economy is like a house of cards and could come down at any moment. Debt based, that is.

Answer 5

Its no longer as much as the POTUS. on occasion we've signed treaties and different agreements, with the approval of congress, and characteristic agreed to be certain via particular regulations and regulations. This has been authentic for generations...its no longer a clean ingredient in any respect. the place replaced into all this BS approximately our shape being "null and void" THEN?

Answer 6

Interesting question: We invaded Iraq because Sadam threatened to trade oil using Euros instead of Dollars. Iran has threatened the same thing. Not much news, but it is the core of this mess we are in.

Answer 7

I saw the international stock market tonight on the news. It's fallen throughout the world.
They do say that, 'When America sneezes, the rest of us catch a cold!'

Answer 8

Our deficit is too high. If we controlled our budget the va;ue of the dollar would rise. For now, investors see US debt and are afraid the government may not be able to pay back everything it has borrowed.

Answer 9

I remember the days when 4.5 dollars to £1 sterling Its now 1.6 approx to the £1, draw your own conclusion

Answer 10

It's still better than every currency beside the Euro or Pound Sterling.