Is The U.S. Dollar loosing Value?

Question

If so then should'nt all the rich people be concerned about this. since This President has been in office and this war and all. and The fare trade agreement that allowed all the jobs to go elsewhere, has caused the U.S, Dollar to loose it's value. Why would any bussiness owner even concider investing anything in the UNITED STATES ???

Answer 1

ha ha. Do you think that the rich people have their investments in dollars? Think again. They are investing in China, India, and oil.

Answer 2

I am concerned about the strength of the dollar, particularly with the looming twin deficits of Medicare and Social Security. That said, the US is still, by far, the world's strongest economy. If politicians can straighten out, I am sure our current course can be corrected. The way things are going now, I think we might be headed for hard times.

What is an investor to do? Diversify your investments to include foreign stocks. Here are two portfolios from http://www.top10traders.com that contain stocks from foreign countries (India and China) that are traded on the US exchanges:

Chinese companies:

http://www.top10traders.com/ViewPortfolio.aspx?userID=7

Indian companies:

http://www.top10traders.com/ViewPortfolio.aspx?userID=13

This is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Answer 3

It is a little more complex than that.

First, the current policy is to prefer a devalued dollar. With a "cheaper" dollar, say in relation to euros or yen or yuan, the American product lines are likewise sold at a discount. It is the foreign trade equivalent of a sale. In the case of an inflationary-biased economy, imports cost more, which is the functional equivalent of a tarrif when tarrifs are otherwise controlled by treaties. It should help the balance of trade, but since it is environmentally unfavorable to drill for oil at home but oil companies can do whatever they want abroad, the enormous cost of foreign oil is sandbagging the balance of trade big-time (along with dismantling our industrial capacity and shipping it to low wage, low benefits, low cost labor countries like China or India).

Second, some of the dollar devaluations are based on a balance perception: the amount of money (and the velocity or speed at which it changes hands in the economy), versus the productivity of the economy. Our fiat value changes when it appears that there is more money than productive value in the economy. When it looks like there is too much money and too little production, then the value of that money drops. This is also called inflation in some circumstances when prices begin reflecting a lesser value of the money. (Note, we have a devaluation without a lot of inflation--which brings us to the next)

Third, the dollar losing value is a relative function. It is relative to the market value of yen, yuan, euros, rubles, rupees, pesos, etc. When an economy has a substantial increase in productivity, relative to another, then the apparently disadvantaged one loses relative value. Part of this is the realm of speculators and traders. If european markets discount dollars to euros even though most of the european union has a much weaker fundamental position in numerous aspects than the american dollar's basis in value, then for the moment the dollar will fall in relative value. But something could and almost always does happen that will provide moments of correction. Some of this is a balance of trade problem, some of it is purposeful engineering, some of it is simple market manipulation.

Answer 4

the dollar losing value doesn't effect rich people as much because they are closer to the printers that print the money out and just get more.
one of the biggest reasons the dollar is losing value is this dirty little cycle that the federal reserve started that has snowballed out of control. its called print more money because the debt is heading for a trillion dollars and we have to do something to curb it. don't you wish you could just print money to pay for your debt? for fiscal 2006 they won't even release figures on how much money they have printed because if the market found out how over-inflated the dollar was it would knock us back into the dark ages. well ok maybe not the dark ages but you have heard all the european war stories about trucks of money to buy a loaf of bread no doubt.
isn't it ironic the second wealthiest man in the united states has been moving all his investments overseas for the past 6 yrs? his big growth market for investing in the united states? mobile homes. we are going to need a lot of mobile homes as more and more people can't afford their mortgage hikes.
the future isn't very shiny and happy unless you have lots of chrome on your trailer.

Answer 5

US Govt. policy is now to loose value of dollar to get more export
to cure the the trade imbalance with its trading partners. This will
change to strong dollar policy when US can not attract enough
foreign money to buy treasuries. US Govt. can not print more
money to budget deficit and trade imbalance because it will create
rampant inflation.

Answer 6

Bush is out soon so the $ could recover, this would mean a favourable exchange rate for FDI so the US is very appealing now, look as tescos!

Answer 7

United States of America is still the second largest economy of the Planet.