When will the USA dollar become stronger...?

Question

When will the US dollar become stronger than the euro and pound? What is it that needs to be done, by the people, government, etc?

Answer 1

"The currencies of dominant military powers tend to stand at a premium relative to the interest rates and trading position that would otherwise determine their value."
[Source: The Great Reckoning by James Dale Davidson & Lord William Rees-Mogg]

So, the value of the US dollar is right now at a premium because America is still a very strong country and a superpower. As America allows other countries to dominate and take away the lead, the US dollar will sink.

There are lots of factors that determine the value of the dollar. It's not simply supply and demand and imports and exports. It's a lot more than that. The US dollar measures the country's future prospects as well as its current military strength. Everything is taken into account, and that's how the US dollar is valued.

So, there are a lot of things that could be done and are being done to help the US dollar. The government could cut back on spending. That's one idea from the hundreds of possibilities. And I have to admit that it's not the best idea, although it looks like a pretty good idea at first. I think, an even better idea would be to double military spending and upgrade our military technology to make it even better.

The US dollar began to go down in 2002 when the world realized that America suffered a huge blow and failed to retaliate in time. The US dollar dive didn't happen because America went to Iraq. The dollar was already half way down when the Iraq war started. The dollar is sliding because the world lost faith in America. They believe that America is not the strongest, not the safest, not the leading nation. America needs to prove the world again that she is the strongest. The dollar will continue to go down if nothing happens to restore America's image.

- We desperately need a victory in Iraq. It would boost the US dollar. Capturing and executing Osama bin Laden would also help the US dollar.

- Iran must be dealt with quickly before they develop nuclear weapons. Once they get nuclear weapons, the dollar may begin another slide.

- Also, Americans should invent an energy source other than oil that can power cars. We need some liquid that can explode just like fuel and is very cheap to manufacture. This would cut our dependence on foreign oil exports, and the dollar would go up.

Another thing we have to consider is the Federal Reserve's policy. Ben Bernanke is the guy who can push the dollar up or down simply with his words. He needs to be careful about what he's doing, because his actions can hurt or help the country. He has a tough job, because if he decides that he wants a strong dollar, then he'll raise interest rates. This will have very serious consequences such as stock market crash, money shortage, depression, high unemployment. If he decideds that his goal is to make the economy and the stock market happy, then he'll lower interest rates and pump money into the market and let people have as much money as they want. But this, too, will have serious consequences which we may not like. For example: the US dollar will plunge, gas prices and all prices will skyrocket. Every interest rate change is a very hard decision. Whatever the Fed chief does is going to help someone and hurt someone else at the same time. So, it's not an easy job...

What can the average people do to help the dollar?

Not much. But they can help themselves by making as much money as they can and investing a small portion of their savings in gold. That way if the US dollar takes a dive, they'll have some money in gold which keeps its value. They should prepare for the worst, but hope for the best by increasing their savings and paying off as much debt as possible. The worst may never come, but it's good to be prepared anyway. ;)

Answer 2

The reason why the US Dollar has appreciated during the financial crisis is that the US Treasury Bonds are the safest investment out there. When the big run to “relatively safe” investments happened in October/November time frame, a great many large investors dumped their assets in emerging market or other foreign assets and bought US Treasury bonds. Before you buy the US Bonds, you have to convert the foreign currencies like Euros, Brazilian reals or Indian ruppees into dollars. With all the trade going one way, the dollar appreciated quickly over night. Currently, investors are slow to get off the sideline because market volatility is still relatively high increasing the risk for stocks as well as the business outlook for 2009 being really bleak. Further down the road, it will be interesting to see if what the Obama administration is planning in a mega-stimulus package results in a trillion dollar budget deficit and big time inflation. If that happens, the dollar might drop like a rock. Pauly

Answer 3

The US economy would have to get stronger in exporting goods! Many years ago, the US economy exported cars, computers, machinery, food and so on. Today there are hardly any US exports anymore. And - even worse - the US imports are growing constantly.

The falling dollar should make it easier to export goods, that's the economical logic behind the fact. But for that, US goods firstly would have to become more competitive! As long as US cars for instance have a poor quality and consume too much petrol, nobody wants such cars.

Answer 4

When i left Europe in 2001, the dollar was worth 1.25 euros. Then Bush took over, lowered taxes (which had already been significantly lowered by Newt Gingrich and Bill Clinton) to a ridiculous level, lowered interest rates to a level so low the Federal Bank can't make money anymore (and the average American can't afford a house anymore due to exploding prices), cancelled supporting Social Security, and started a war claiming at first it would cost 20 billion dollars which has now cost us over 400 billion dollars and still rising. Since then the dollar's value has dropped by HALF compared to the Euro.
The best solution for the budget would be to elect a Democratic president who is smart enough to put Newt Gingrich in charge of the budget, cancell all tax breaks of the last 8 years and get out of Iraq.

Answer 5

In general, there aren't much chances of the dollar developing further. The US recent foriegn stratedgy is really messed up(not to mention the economic turmoil created by Bush's war on terrorism). Though agrrement on 123 with India may go a long way, to help dollar. Yes, it may seem stupid , but it's truth.

Answer 6

Right ON David R. I agree get the Democrats back in and watch the economy soar

Answer 7

it won`t no one is sure of americas policies and show it by preffering other currencies.note how the £went over $2 when brown became P.M,blair was classed as `americanised`

Answer 8

3 days after never
or 3 days after we pay off the national debt

which ever comes first