2006-11-30 02:02:25 · 7 answers · asked by Ringo G. 4 in Business & Finance ➔ Investing
Taranto is correct. With the U.S. running huge budget and trade deficits and in debt to the tune of $9 trillion (that's current liabilites, total Fed debt including long term and unfunded liabilities is some $35 - $40 trillion), foreign investors holding trillions of U.S. dollars are starting to wake up to the fact that the dollar is on the verge of collapse. China wants to diversify out of it's dollar reserves as the falling value of the dollar is going to erode the value of their forex reserves. Peter Costello, the Treasurer for Australia has called for Asian countries to diversify out of U.S. dollars. In other words, the financial condition of the U.S. (which is not good) is prompting people to move out of dollars which is causing the dollar to fall.
2006-11-30 07:16:49 · answer #1 · answered by 4XTrader 5 · 1⤊ 0⤋
The main cause of the drop in the value of the dollar is the large deficit created by the Republicans. The US has never owed this kind of money before -- not even when Reagan was in office. Running at a deficit is equivalent to having a tax on spending.
2006-11-30 11:45:04 · answer #2 · answered by Ranto 7 · 1⤊ 0⤋
There are too many reasons why the American dollar is depreciating. On the short term the media can affect the strength of the dollar, example - China hinted they were going to sell their American dollars so everybody jumped the gun and started selling their dollars. More American dollars means less value. Americans are buying more imports and exporting less? The war in Iraq? Look it up let me know what you think.
2006-11-30 10:19:08 · answer #3 · answered by Spatz Columbo 2 · 0⤊ 0⤋
The Genie is out of the bottle. The constant warmongering, the strength of the Chinese and Indian economies, The lies told before the election about the state of the economy, the general and underlying weakness of the US economy and the impending depression of oil stocks that Bush has fought so hard to avert and the Iraqi people paid for with their lives.
2006-12-04 11:20:18 · answer #4 · answered by Anonymous · 1⤊ 0⤋
The US economy is slowing down, especially compared to China and Europe. That usually leads to lower interest rates, which makes investors move their money from US investments to Euros or other currency. Less demand for US dollars means they are worth less compared to other currencies.
2006-11-30 10:06:08 · answer #5 · answered by Kutekymmee 6 · 2⤊ 0⤋
1) The USD is losing value.
2) Billions of people (Mostly foreigners) lend their money to the United States of America and the United States of America pays them back after a while (With interest)
It turns out that money was used to search for "Weapons of Mass Destruction" on Irak and everybody was fine with it.
Saddam Hussein is now on Dead Row and the United States of America still has hundreds of thousands of soldiers in Irak.
What exactly are they doing there?
Why don't they go Home?
They were needed back home when Katrina landed and many died because help was miles away (In another country, in fact)
Most foreign investors are now selling their USDs and buying foreign currencies in more peaceful countries.
Nobody wants to finance a war (Except Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics and United Technologies)
2006-11-30 19:29:45 · answer #6 · answered by Anonymous · 1⤊ 1⤋
www.forex.com has a great article from Nov 28th on the bottom right of thier web page under news. Good Luck
2006-11-30 22:24:06 · answer #7 · answered by Blanston 2 · 0⤊ 1⤋