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Country Discussion Topics
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A worth of a dollar???
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KatG    Posted 12-30-2004 at 16:50:52       [Reply]  [Send Email]
Matt read yesterday where the American dollar is not worth a dollar...okay can anyone explain this to me...KAtG


Hayman    Posted 12-30-2004 at 21:33:02       [Reply]  [No Email]
Fact 1 -The U.S. dollar has lost about 99% of it's value since the thirties.How long can it hang on to it's remaining 1%?
Pres. Nixon closed the Gold for dollars window in 1970.This meant that the U.S would no longer sell gold for dollars.Thus the U.S. dollar became a fiat currency with no intrinsic value.I mean,it's just a scrap of paper.It only has value because the people think it has.
Fact 2 -No fiat currency has ever survived for long;the dollar is going down.
The U.S. dollar has enjoyed an enviable position;it was and is the reserve currency of the world.This reserve status has allowed the U.S.to export it's debt to unbelievable levels with Japan holding the most debt in the form of bonds.china also holds oceans of bonds.
But the dollar is falling in International markets because people are beginning to doubt that the U.S. can ever repay this debt and they are absolutely right.Everyday the U.S. has to borrow 2 1/2 billion dollars to keep going.Are you good people seeing where this is going yet?
No country wants to start cashing in those bonds because they don't want to start a global financial panic and yet everyday the dollar falls
these countries take more loses.Who knows when they will cut and run
The inflation numbers are being manipulated.
The employment numbers are being manipulated.
The U.S. well paying blue collar industry is being gutted--the new jobs are mostly low paying service jobs.
The Iraq war is costing way to much.
Dollars can be created by the federal reserve with the stroke of a pen and since the dollar was cut loose from the gold standard in 1970 this is exactly what politicions have done in spades.
So what I see coming down the pipe for the U.S.is an inflationary depression with high interest rates and folks,it ain't gonna be pretty.I think the dollar will fall by half again(on it's way to zero} and I think when the Chinese revalue THEIR currency upwards against the dollar,that will export inflation to the U.S. in the form of higher prices for Chinese made goods.Whether the Chinese will time this to their advantage remains to be seen.But it looks that way since all Whitehouse efforts to China have been rebuffed.
I would call it the perfect financial storm.


sawtooth    Posted 12-31-2004 at 06:03:01       [Reply]  [Send Email]
Yesterday I listened to talk radio, I think it was Rush Limbaugh's substitute that talked about this subject. He said when the baby boomers retire and plan on getting social security it will be an "economic tsunami" and there isn't nearly enough personal savings. When he said that I had to think... what will a dollar be worth in 10 years... 20 years? Seems like a good part of the saving needs to be in hard assets. But if the general population doesn't have money to trade for your assets what will they be worth? I told my wife about this, she said "this kind of talk has been around for years..."


Peanut    Posted 12-30-2004 at 17:09:37       [Reply]  [No Email]
Its worth a dollar in the USA only. Beyond that you are subject to currency exchange. A buck in the USA might get you 87 cents worth of stuff in Canada (just a guess, I dont know the current exhcange rate).

When I was stationed in Okinawa while in the USMC, the exchange rate was roughly 270 Yen to 1 Dollar. That meant I could buy slightly twice more "stuff" than the average Okinawan making the same chump change the Marines paid. Good thing since the Marines paid below the USA poverty level.

Go to Mexico with $100 US Dollars and you'll have more than 100 Pesos.

Go to Germany and try to exchange your $100 US Dollars for 100 Euros ... they'll laugh at you. The Euro is valued higher than a US Dollar. That is probably what Matt was talking about. The Euro has jumped in value in the last three months to exceed the US Buck. Not many National Currencies are valued higher than a US Dollar but there are some.

It changes daily too.


Red Dave    Posted 12-30-2004 at 17:03:46       [Reply]  [No Email]
A U.S. Dollar is, by definition, always worth one U.S. Dollar.
The buying power of a Dollar varies up and down with inflation.
How many units of a foreign currency (such as a Pound, Euro, Peso, etc.) a Dollar will buy varies up and down with international exchange rates.
Lately, the Dollar (U.S.) has been down in relation to the Euro and other currencies. This is good if you are exporting goods to other countries, but it isn't good for the price of those things we import from abroad.


Fawteen    Posted 12-30-2004 at 17:05:20       [Reply]  [No Email]
The other "meaning" of that oxymoron is that due to inflation, a 2004 dollar won't buy as much real goods as a 1950 dollar.


Red Dave    Posted 12-30-2004 at 17:24:37       [Reply]  [No Email]
That's true for some things, such as bread. But not true of others.
Fer instance: a couple weeks ago, I bought a TV for a Christmas present for my wife's Grandmother. It was a 27", stereo sound color TV. Just a plain TV, no High Def, no flat screen or anything special. I gave $189. Brand new from Circuit City.
Assuming that a comparable TV was available in 1950, it would have been maybe $800-$1000, and you would have had to buy it in 1950 dollars, which would be worth how much today? Prolly $8-10K in todays money? Maybe more. And it would have been VHF only, channel 2-13, no remote control, and would have needed a few tubes and a tune-up every couple of years. This one will never need any of that.

It can go both ways.


Good Point    Posted 12-30-2004 at 17:14:14       [Reply]  [No Email]
Fawteen, that is an excellent point. If you value a dollar today ... in a month the price of the object you valued a US Dollar on might have increased. That makes the dollar worth less to most people. Simple rule of Inflation. Hopefully the Cost Of Living adjusts to the rate of inflation. If that actually happens the Dollar remains even. Caveat - I have not seen the Cost OF Living remain even with the Rate Of Inflation during my coherent life. Maybe it will happen someday????

The good news is that some products such as computers decrease in price as technology advances. Remember the first computers and how much they cost? Remember how little the did for us? Too bad though, computers are one of the few things that get better and cost less over time.

- Peanut


NEW Computer    Posted 12-30-2004 at 18:16:28       [Reply]  [No Email]

Doc


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