what are the chances of the dollar bouncing back ?

Question

is this the beginning of the end for the usa's global dominance ? the dollar has been dominant for the last 100 years, but not anymore i guess all great things must come to an end

Answer 1

we are in a Global cycle, u will soon see the reverse an bounce back. don't get worried with dips.

Answer 2

The dollar is oversold at the moment and probably will have about a 5-10% recovery. Until the balance of payments and the deficit get straightened out, figure that the euro will not drop much more than that. China's currency however, is way overdue for a major collapse... if you're gutsy, you might want to short that.

As long as the USA continues to encourage investment and entreprenuership, it will be the major player in the world economy. If however, Hilary manages to hike up the capital gains tax rate and refuses to cut back on entitlements, then look for the bottom to fall out of the US economy.

Answer 3

Balderdash! The Dollar will "bounce back". The euro centric socialist social engineering experiment known as the European Union will ultimately flounder. Sure there is some buzz now but it will go the way of communism, fascism and all of the other similar endeavors that have plagued mankind throughout history.

The US is still the country of envy for the entire world even if nationalistic pride prevents many from admitting it. If you doubt it, just look at immigration statistics. The US is the hardest to get into but still has the most applicants of any country in the world. The only reason that any European country has any immigration problems at all is because it is easier to travel to.

Many European countries are actually shrinking in both population and economically and the ones that are growing, (e.g. the UK) are the ones that are the most like the US.

France, followed closely by many Western European nations including Britain are on the verge of becoming an Islamic state and when that happens, there will be no hope for the future.

The EU can;t even decide what color the carpet should be in
the great halls in which they gather to drink tea and bicker over everything and nothing.

Answer 4

The fact is the use of the dollar as a sole reserve currency is probably at an end. BUT beyond that some fiscal discipline and banking reforms could help the dollar out (as well as some fixing of the mess we caused on Wallstreet post 2000-2001)

Answer 5

The US Dollar's value vis a vis other currencies is primarily a function of how the Federal Reserve sets interest rates.
If interest rates are higher, the dollar increases in value. (This tends to lower inflation.)
If interest rates are lower, the US Dollar declines in value. (This stimulates the economy, lowering unemployment/recession.)

Dollar dominance is not necessarily a good thing. It hurts our economy because imports become cheaper than domestic products, and it hurts our exports (companies like Caterpillar, Boeing, GM, our farm products, software - tons of stuff).

Part of China's rapid economic growth is from their government's policy of keeping their currency artificially low.

Any notion that wars, spending, political policies, or consumer debt affect this are simply wrong.
Trade deficits affect a currency's value in the long run and to a far lesser degree.

It astonishes me how misinformed so many people are about basic economics! Did they never take any in high school or college? Do they not read the Wall Street Journal? Never had to read Smith or Hayek or Keynes or Friedman? Distressing, all of the statements here that are just plain wrong!!

Answer 6

Little. It will happen when US politicians start administering US finances like a developed country. Piling up 40 years of trade deficit might be acceptable for an African country, but not for the richest country in the world. Replacing the dollar by the Amero is just another weak plan to temporarily fixing US finances by joining other economies, and will hopefully not pass.

Answer 7

The value of the dollar according to the Financial Times has dropped 35% since 2002. In the same time, the national debt has increased 40% to $9 trillion dollars and individual Americans owe at least another $9 trillion in loans, mortgages, credit cards, etc.

Don't expect to see any good news anytime soon. Especially at the rate Americans are defaulting on their mortgages and credit cards.

Answer 8

Dollar did the same value depreciation during the latter years of the Vietnam war. Cannot run a war- er Police action- and a full consumer economy based on imports and have the debt not erode the value of the currency. Wish I had bought all I could afford in Canadian dollars about 5 years ago....

Answer 9

The dollar has dropped 40% in seven years(I love it that Republicans blame that on "liberals"-Bush and a Republican Congress and his own appointees have presided over it). Many overseas companies and countries are dropping the dollar, recently Kuwait. It will get much worse and they'll blame it on the Democrats. Many also say it doesn't matter-what garbage. Of course it matters, the US has made a point of maintaining a strong US dollar. Suddenly it doesn't matter?

But with the recent FCC(GW's friends) decision to further consolidate media, Rupert Murdoch at Fox will tell even more people what to think.

Answer 10

I get such a kick out of these answers blaming liberals for the dollor losing value. One minute they're saying the Congress has done absolutely nothing and the next they are blaming them for the devaluation of the $. What a hoot.

Our debt, the housing debacle, and lowering interest repeatedly are all contributors in the devaluation of the dollar. The home building has tanked and there will be a recession within a few short months. We usually pull out of these trends eventually.

Answer 11

I believe it will take years for our Country to come back after 8 years of the Bush Administration and their policies. I think people are finally not believing when we are spoon fed info about how great the economy is. Where? What makes you think that? Aren't Christmas sales at an all time low?