Please let me know about the U S Dollar's future?

Answer 1

After the overthrow of the US Government by the northern armies of Canada in 2075, owning a US Dollar will be a criminal act. They will be collected and destroyed en masse, and the resulting decreased supply will make the few surviving dollars worth a fortune to those collectors brave enough to actually keep one.

The largest surviving collection will be destroyed by a mysterious fire in 2103, shortly after the Canadians are forced out of power by the invading Samoans. It will be widely hypothesized that the fire was set by Canadian loyalists, but the claims will never be substantiated by any evidence. After this fire, only one US dollar will remain, as a priceless collector's item.

Unfortunately, in 2110 the bill will be destroyed during a demonstration of an antique soda machine. The machine will not accept the dollar and while trying to smooth the bill out to make it acceptable to the machine, the bill will be torn.

That is the future of the US Dollar.

What? Well that's what MY crystal ball says...

Answer 2

I suggest that the long run relative value of the US dollar is likely to fall.

About 70% of US Gross Domestic Product [GDP] is produced by wages and salaries. The principle drivers of comparative wage and salary income are comparative education [learning] added by the worker and comparative capital [tools] added by the employer.

After 1946, the US went on a major education upgrade [via the GI education bill] at a time when most other nations were not doing so. This gave the US the highest average attained education in the world and lead to the US having the highest wage and salary structure in the world -- and thus a strong dollar.

However, in the past two decades the US advantage has begun to erode with the result that an ever increasing proportion of the world's most educated and skilled workers are no longer in the US.

This will, in my opinion, lead inevitably to a decline in the relative value of the US dollar.

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While it is possible that capital flows will offset this effect, a shift in relative capital flows would require that the risk-reward ratio for investing in the US improve faster than similar ratios in foreign countries.

With the Democrats apparently about to take power in America and their 'tax the rich' program likely to raise taxes on capital income [which lowers returns] about 2010, it would seem that capital will likely cease flowing toward the US [may already have done so] and begin outflowing around 2009 [when the 2008 election results are known].

If taxes on capital are seen as likely to go up after the 2008 elections, I think it very likely that the US dollar will come under immediate pressure from both the wages and salaries front and the capital front ... and a crash in the value of the dollar by 20% or more might well occur.

Thoughtful Americans might want to move a portion of their assets into foreign jurisdictions well before this occurs [ie: start now]. The freer markets of Asia come to mind [Singapore, Japan, Australia, Korea, maybe HK] as possible beneficiaries of continued growth in China while not being hugely dependent on the US markets.

I have no reliable forecast on whether the risks of doing business [owning assets] in China are likely to decrease over the next few years. After the 2008 Olympics, various pundits suggest that the real Chinese policies will become evident as they'll want less in the way of favorable world opinion. If the risks do decrease, this would likely shift the risk-reward structure in favor of owning assets in China [directly or indirectly] and away from assets in America.

Disclosure: I already have a slice of my assets positioned in China. I am not likely to change this proportion until I see greater clarity in the risk-reward structure across multiple nations, which may not occur until after the 2008 US elections.

Answer 3

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Answer 4

US Dollar vs British Pound/Euro.

USD will continue to lose value, how quickly depends on our future fiscal/monetary policy regarding our spending (war, etc) and our inflation rate.

Answer 5

inflation will never stop.