My opinion on the dollar and basically everthing summed up

The dollar use to be the world’s currency. But now it is probably the euro. The dollar has been weakening each and everyday. The dollar doesn’t look like it will get any better soon. It might show little improvements buts that all, not major. Even if the dollar recovers, it won’t be like it used to be. The dollar will probably still be lower than the euro, and the dollar won’t be used as much, and it won’t be the world’s currency again. The dollar has fallen through a hole, which is possible to get back up, but it won’t be as strong as it used to be.

There are multiple reasons for the dollar being weaken. I believe it’s due to the Iraq War. The Government is spending money on the war instead of education. The war is causing the U.S. to spend money on weapons and materials for the war. And it is causing the U.S. to be in debt of other countries. The U.S. is spending money which they don’t have, which causes the Government to borrow money from other countries.

The dollar is causing the economy to go into a recession. It is making prices of food to oil to go as high as possible. From what I’ve have heard, even tea and shoes are going to be higher by about 15%, not completely sure how much percent it will rise. The prices are making people not spend even if they wanted to because the prices are so high. Imports are as much as it used to be because it would cost a lot more, however the U.S. been exporting a lot. Investors been staying away from U.S. and haven’t been investing in U.S. assets. The dollar has done so much damage and will continue to do more damage until the dollar gets itself back up.

Sources: My knowledge, and the past sources that I have used for all my older posts.

What is the Fed doing?

The Federal Reserve is having a problem, giving low interest rates causes the economy to go into inflation. During this time, the U.S. dollar still continues to drop low against the euro. It seems like balancing the consumer and credit markets is the Fed’s priority, which will mean that cutting more rates. And once that is done, supporting the U.S. dollar will be less hard to do, said Yared. The Fed has already lowered rates to prevent the economy from going to a recession. People say that the rates are going to get lowered again.

Meanwhile the euro has rose up to $1.5380 dollars. The Fed is ready for the dollar to lower and inflation. The dollar has lowered against the major currencies, lowering about 102.66 yen. The dollar is obviously going to be lowered even more. The weaken dollar has sent a barrel of oil above $100. The price of oil is predicted to go up obviously if the dollar is going to be even weaker. Other prices of necessities will likely to be higher. A gallon of milk costs way more, as I heard that big packets of rice now costs 20 dollars. The prices will eventually get lowered when the dollar regains some bit of strength and when the economy isn’t doing so bad.

Soruce: http://www.forbes.com/currencies/2008/03/06/dollar-federalreserve-ratecut-markets-commodities-cx_ra_0306markets38.html

The dollars getting better, is the economy advancing as well?

The dollar regained some strength and it showed that prices of food were going down slowly. Even though the dollar had regained some strength, there are still some fears to be worried about, such as housing, debts, etc. In April, 20,000 employees lost their jobs. It wasn't as bad as it was in March where 81,000 employees lost their jobs. The unemployment rate dropped down to 0.1 percent. Since the dollar made a comeback, investors started to invest in the U.S. The dollar now is to make U.S. assets attractive to foreign buyers. The dollar’s advance has lowered food prices, however oil prices rose due to other things than the dollar.

The economy was getting better as prices went down a bit. There were 7.6 million unemployed in April, has changed to 6.8 million. Worker’s pays rose to $17.88, in April, which rose from .01 percent from last month. Over the last 12 months, wages increased by 3.4 percent. If workers continues to get higher pay, then they would spend more, if not then they would obviously spend less. To help the economy get better, the Fed lowered interest rates. The economy increased in a slow pace just by 0.6 percent. If the economy keeps getting better than the economy might get out of the recession or might prevent an recession.

Source: http://news.yahoo.com/s/ap/20080503/ap_on_bi_go_ec_fi/economy

Dollar sets new low record

The dollar has fell 30% lower against the euro. Right now, people have to pay $1.24 for one euro, which used to only 80 cents a euro. The dollar fell against the major currencies and as it falls, other currencies get better. The bad things about a fallen dollar is that the importing will cost more, and business that need foreign goods, will receive less and business won’t produce as more. Traveling would be annoying due to the low cost of the dollar. Some countries now, don’t even accept U.S. dollars anymore. The euro is being used a lot and many foreign workers would rather get paid by euros instead of dollars.

The two currencies that are mostly recognized are the dollar and the euro. If both currencies were to go against each other, the euro would win since it is more valued and people would prefer euro than the dollar. As the dollar falls, investors hold back from investing into U.S. assets. The dollar will fall even lower and set a new low record against the euro. Will the dollar ever rise back up? Probably but that won’t be soon, it will take a while till it gets itself back up. And by then, the euro will be probably be the world’s currency and the dollar will still be lower than the euro, but won’t be as low.

Source: http://www.cato.org/pub_display.php?pub_id=2483

The dollar recovering?

The euro used to be down and below the dollar but this time it is the other way around, the dollar is below the euro. The euro has been doing extraordinary well that investors has been investing in places that their currency is doing well. The investors seem to be investing everywhere except for the U.S. due to the low value of the dollar. Ever since Euros were made, the countries using that currency has been developing more slowly than the U.S. but it has changed, it has been developing faster now and it creates chances for investors to invest in places that have currencies that are doing good.

Investors do not need to take their money out of their investments, they just need to stop putting a lot of money to it. The fact that the U.S. economy has been down has changed for other countries such as China or India. They have been growing and soon China will soon be the world’s largest economy. In fact, China exports a lot of goods into other countries, and almost everything now is made in China. The U.S. will soon stop dominating the world like it used to. Other currencies will soon increase dramatically and the dollar will probably still fall. The world would still be different when the dollar recovers, because Euros will be the “big” currency and not the U.S. dollars anymore.

Source: http://www.independent.co.uk/news/world/americas/the-dollar-may-recover-but-the-world-will-be-different-400730.html

The beaten dollar

We all know that the U.S. dollar is falling, and probably is continuing to fall. Although the exports of the U.S. is doing good, but the dollar isn’t. The euro is much higher than the dollar now. The euro is getting higher and higher. Europe’s euro is over 1.40 which people felt that the euro should not have risen over 1.40 because it is as high as the European exports price out of the world markets. And the European banks should set the interest rate higher so that they’re currency would go higher. The falling dollar is causing problems such as people investing in U.S. assets, would now have to look somewhere else because it wouldn’t be worth as much.

Also U.S. imports aren’t importing as much due to the fact that U.S. would have to pay much more now than it used to. The other exporting countries would be affected to because they wouldn’t have as much exporting than it used to and would be losing a huge amount of money and would be forced to rise prices or interest rates. The dollar falling would’ve been a good thing if it were falling slowing however due to the rate of the dollar falling, it’s cause oil prices to rise. Also interest rates were falling so consumers would buy more stuff but it isn’t working because consumers are worried that the currency would fall too low in the future and would rather save up their money instead of spending it. The dollar is affecting all and it’ll probably get worse but of course it’ll rise back up, sometime in the future.

Source: http://www.wsws.org/articles/2007/oct2007/eco-o03.shtml