The American dollar why is it failing ?

Question

Soon the Canadian dollar will be at par with the US dollar

The Euro already exceeds the worth of the US dollar -

So what happened here ?


Economy weak - Too much spending on the war

People dumping because they have lost faith in the American economy ?

Or is this just another one in the long lines of up's and down's ?

Answer 1

Here are some statistics of failure:--80% of our elderly are poor;--35% depend totally on our welfare programs to survive;--70% live from paycheck to paycheck;--the average household credit card debt is $ 8,000 ;--80% of all baby boomers will enter retirement with huge house payments:--
and the worst statistics of all is that only 10% of all tax payers pay 70% of all taxes.
Lots of whiners and few doers

Answer 2

Man, tell me about it !!!

I moved to the Czech Republic. About eight years ago the dollar briefly reached 41 Czech Crowns. Now it is about 20.6, roughly half.

The EU is so strong economically that it has vastly outpaced the dollar. The outlook for the dollar is not so good: in the next three years, it will be lucky to stay at the present levels.

It would help if our trade deficit with China could be reduced. However, once the Iraqi government gets strong enough, we will start withdrawing troops and confidence will surge. That should be great news.... if and when it happens.

Actually, the American economy is in fairly good shape. Home ownership is high. Interest rates are low, and inflation is marginal. This economy is based on real production, not the smoke and mirrors economy epitomized by the High Tech stocks during the Clinton administration. There were high tech companies that had never made a dime, but were worth more on paper than GM !

The U.S. government has purposely kept the value of the dollar low to promote exports. This is killing me financially, but helpful to the U.S. economy as a whole. Don't expect the dollar to make some miraculous recovery. All indicators point to it being rather flat for the next few years. Add to this the fact that countries like Slovakia and the Czech Republic are posting phenomenal rates of growth. Last year, I believe the Slovak economy grew by six percent. That is unparralled. These economies will continue to grow, and the U.S. economy, already as large as it can maintain without causing inflation, will not be able to keep pace.

Answer 3

The US dollar for years has been the most trusted currency in the world thus was able to hold a high currency value on the world market. Because of this trust most of the countries in the world were trading in American currency unless they were part of the British Common Wealth in which case they would trade in British pounds. This was done because lets say India sell Mexico mangoes for $2 million and gets paid in pesos, however the value of the peso falls in two weeks and now the $2 million is worth $1 million then India has to sustain a $1 million loss. Now for the reason that the American dollar is falling is because the global market is unable to trust the American dollar has the once strong constant force it used to be. As such the more and more countries begin to trade in Euros the more the US dollar falls. All this is attributed to the Iraq war, failed domestic policies, exploding debts, gigantic deficits, the suggestion that the Iraq war has no end, the suggestion that a war with Iran is imminent, or in very simple language George W Bush.

Answer 4

Currency value has good points and bad points.

A lower dollar makes American exports more price competitive.

And makes Canadian exports to America more expensive.

The low dollar doesn't really effect the trade balance with China, because China pegs the Yuan to the Dollar.

The dollar is gaining against the Japanese Yen, or should i say, the Yen is falling.

America doesn't import much from Europe, so the dollar value doesn't hurt much there.

Just a note: The EURO was initially pegged at 1.18 Euro = 1 US dollar.

So the EURO has always been worth more than the Dollar.

And people aren't dumping the dollar.

65.7% of all Foreign currency reserves are in US dollars.

10 years ago in 1996, is was 62.1%

Answer 5

the dollar has already lost its value. I was at a hotel on vacation with my family last year, and the hotel would not take cash with out a deposit! I was shocked. But look around, Credit is everything now. the paper monitory system is disappearing. As for the actual economic value- the war in Iraq has completely devastated what was left of our economy after 9/11. The president wants us to believe that our economy is secure and is stabilizing. BULL! There is no such thing as job security anymore.
Soon we will all have the same money. The Euro dollar will try to unite the world. And because of this, money itself with loose all value. The world is heading economic disaster.

Answer 6

The Federal Reserve artificially manipulates the value of the dollar to suit their own purposes. They have always done this. They create depressions when it suits them to do so, and they create inflation when it suits them to do so! Do the research into the history of the Federal Reserve and the money changers. It is very interesting and eye opening. Do the research also into who owns and controls the Federal Reserve. Some of you will be surprised and others will not be surprised to learn that it is owned and controlled by some of the families that make up the Illuminati. LZ

Answer 7

Foreigners are less willing to hold dollar-denominated assets than they have been in the past. The US trade deficit may be part of the reason for this.

Answer 8

Because, thanks to the useless dolts we laughingly call our leaders we're hemorrhaging money, ( while our so called allies sit back and say, " war on terror, what war on terror?, oooooh that war on terror, well let the stupid Americans pay for that ) descent jobs, intelligence, allowing other countries to artificially keep their currency low, etc. how long can you do that for before it starts acting like an anchor? unfortunately we're finding out

Answer 9

It is a currency fluctuation. It has happened before, and will happen again.