What causes this?..I need answers..Will it still go high?
2007-09-27 01:36:22 · 8 answers · asked by KevinJ 3 in Business & Finance ➔ Personal Finance
Because the interest rates are very low and other countries (Mexico included) offer more money than the United States of America.
Because the inflation is very high and other countries (Mexico included) offer lower inflation than the United States of America.
Because the minimum wage is the highest in the World and instead of reducing the minimum wage by 50% to keep jobs from going to Mexico and Canada they actually increased the minimum wage from $5.15 USD to $5.85 USD.
If the United States of America increases the current interest rate to 10% then the USD will be the strongest currency in the World.
If the United States of America reduces the inflation to 1% then the USD will be the strongest currency in the World.
Right now the USD is the number 15 and falling each month.
2007-09-27 15:03:30 · answer #1 · answered by Anonymous · 0⤊ 2⤋
It's mostly the fault of the Federal Reserve in making the decisions to cut interest rates and continue to print more money (electronically and physically) at a faster rate to inflate away the national debt crisis that the US is now in.
The Fed are trying to save Wall Street (and the government) at the expense of the Dollar.
Look at it from my point of view. I'm not a US citizen and I do not live/have investments in the US: Why would I buy US dollars or US government bonds, which would be subject to your interest rates and your monetary inflation rate when I could buy other currencies which have better interest rates and at lower inflation?
What you are seeing is a decrease in the demand for US$ in the money markets and other markets. Even oil producers do not want to be paid in dollars. Lower demand for dollars results in 'cheaper' dollars.
Conversely, you are seeing an increase in demand for Euros, which is raidly becoming perceived as a more stable currency.
The US$ will only go high if the 'US$ printing presses' are stopped, interest rates are increased dramatically to kill inflation, and if the housing market and wall street are allowed to correct naturally (i.e. a recession _is_ needed).
US monetary inflation (not 'core rate') is currently running at 14%. The federal reserve will tell you that inflation is really ar 2%.
Interestingly the Fed are gambling on other countries decreasing their own interest rates and inflating away their own currencies to create an 'global inflation balance', but some countries are, so far, refusing to help. Do some research and you'll discover that the 'real' rate of inflation for nearly all western democratic countries is 10% and upwards. Yet their central banks claim it is < 4%.
2007-09-27 09:43:20 · answer #2 · answered by DDBean 2 · 0⤊ 0⤋
Strong Euro, lower interest rates, worries about inflation
2007-09-27 08:49:56 · answer #3 · answered by ChuckE 2 · 0⤊ 0⤋
Could be the man in the White House making some real wacky decisions in recent months.
2007-09-27 08:43:33 · answer #4 · answered by Michael M 7 · 0⤊ 0⤋
no it will stay stable for three to 4 years then it will go up in this 3 to 4 yrs usa will decrease his credit money or payment from all world so it will get 20 to 25% profit for that reason gulf country will increase oil price after that it will go to above 50rs. so america will get profit by paying his credit..it is one kind of investment of america
2007-09-27 08:47:32 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Funny you should ask........the ecomony, the Republican in the White House, the price of oil, and the war in Iraq, and the huge deficit, other countries that owe us money, and the gold we have to back our money that was once there....I seriously doubt it is even close at this point.......
2007-09-27 08:59:22 · answer #6 · answered by Sage 6 · 0⤊ 0⤋
sadly, its the president.
2007-09-27 08:45:06 · answer #7 · answered by ♫♪sara♪♫ 3 · 0⤊ 0⤋
look who we have for president..
2007-09-27 08:40:43 · answer #8 · answered by Sandy M 3 · 1⤊ 0⤋