Dollar May Drop for Eighth Week as Central Banks Permit Slide

Dollar May Drop for Eighth Week as Central Banks Permit Slide

Nov. 29 (Bloomberg) -- The dollar may drop for an eighth week and set a record low against the euro after the world's major central banks signaled they will allow the currency to extend its slide, a Bloomberg survey indicates.

Sixty-eight percent of the 59 strategists, investors and traders polled on Nov. 26 from Tokyo to New York advised selling the dollar against the euro. Participants also predicted the U.S. currency will weaken against the yen, British pound, Swiss franc and Australian dollar.

The dollar has lost as much as 3 cents against the euro since Federal Reserve Chairman Alan Greenspan said on Nov. 19 that foreigners will tire of financing the record U.S. current account deficit. He was joined on Nov. 25 by Bank of England Chief Economist Charles Bean, who said in a speech in Colchester, England, that international investors are unlikely to keep buying American assets indefinitely, triggering a ``possibly substantial'' drop in the dollar.

The dollar fell 2.1 percent last week to $1.3293 per euro late on Nov. 26 in New York after earlier sliding to a record $1.3330, according to electronic foreign-exchange trading system EBS. It shed 0.5 percent to 102.57 yen, the ninth consecutive weekly decline.

http://www.bloomberg.com/apps/news?pid=10000087&refer=top_world_news&sid=a58cLpYluV8E

(It looks like the above article is similar to this one, with the addition of the Bloomberg survey:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1025077 )

this is coming... but deficits don't matter, right Chenney?

A jobloss recovery is not a sustainable one.

It can get so very much worse. What if the price of consumer goods doubled.

I've seen comments in here that attribute the slide to incompetence. Sorry, the financial gurus might have their own agendas (agendi?) but they are far from stupid. They don't "allow" things to happen without good reason. Benjamin Disraeli once quoted something about how the powers at work were different to those he supposed were the case once he was on the inside. What Disraeli was saying was that what appeared to be the case when viewed from outside assumed a different perspective from within. We THINK (sorry for the caps, too lazy to set the .html to italics) something happens for a reason but our supposition is that of someone who is not in possession of the real facts that dictate whatever policy is being applied.

So, think about this...the economic health of a nation is closely tied to how its currency performs. Do you really think, like even for a few seconds, that this is accidental? Nope, this is deliberate and for reasons that us non-economists (economics = "the dismal science") can fathom out. there is absolutely no way that the US Treasury does anything as regards currency movements that is accidental, ill-advised or stupid. They know EXACTLY what they are doing. We can only guess as to what the reasons for inaction are (and that is crap grammar)

Just like every other effort of this blackguard misAdministration.

they're clueless, and buying their own lies.

rich foreigners buying US real estate is supposed to keep the real estate bubble inflated for a few more months.

they do want it to happen.....

they will consolidate their power and they will create one worldwide currency, i think they call it the mark of the beast in the bible.:hurts:

there are around four mainstream interpretations of the last book of the New Testament as you possibly know. I'm not a Christian but neither am I an atheist (sheesh, that sounds sooo New Age) I think that the powers in charge (at present anyway...) regard the current crisis as the begining of End Time and that's quite scary.

regards

it is something i felt in 1998 when the asian currencys were collapsing, as i believe that is some kind of trigger.....

it is very interesting to watch it unfold......

Your post distilled the vague thoughts I immediately had from the headline.

It's very hard to think like these people, but is the question we should be asking (a) how is currency devaluation good for the Bush regime, or (b) how is currency devaluation good for America?

very simplistically, that the US can export its way out of the deficit problems through a lower currency. He is big into black-white thinking and doesn't understand the broader complexities - and has no strong-minded staff telling him otherwise - that there are always multiple ramifications. In this case, they aren't counting on a major credit crunch, skyrocketing interest rates, a housing bust, major recession, banking crisis, and crisis of confidence in the US economy. Remember how they didn't pay attention to any of the negative contingencies in Iraq before the war - it's the same kind of closeminded thinking here. In the end, the likely impending crisis will fully discredit the Republicans; however, at a tremendous cost.

Your saying they're fully aware of the dangers associated with their courses of action, and like a junkie wants his score, they're so full of dollar-lust, they're willing to gamble with the economic policy?

I'm reminded of the "faith-based" nature of this administration. When you've been "chosen by God", you have a tendency to believe your own hype.

Economic Armageddon?

My first instinct is that they're trying to scare us...but I can't figure out what they're trying to scare us into. I find it interesting that Greenspan made his comments in Europe, and wonder if that act signals a break with the administration. Also interesting (and informative)is the fact that the administration hasn't had a response. Silence on the part of the administration not only signifies their ignoring of the issue, but it keeps the issue out of the mainstream press where Bush supporters are likely to hear about it.

They are crossing their fingers and hoping for a soft landing - a lower dollar means cheaper exports and more expensive imports. And it means you pay back your debt more cheaply with devalued dollars. They are betting that the Central Banks show up at the auction like they always do because if they don't the dollar slides more and their economies slow because their exports to the US decline. The danger is that there is a flight to quality - the Euro - and the dollar free falls. Then they will buy back dollars and raise rates very quickly.

Hedge funds love this - they arbitrage it to death, make a hundred million and answer to no one. Ain't free enterprise great? And you thought it was about making quality products. Hmm.

an attempt to force the Chinese to let the renimbi(sp) float. Buffett says that China and others who are exporting inot our economy cannot stop buying dollars without harming themselves. Right now with thw Chinese currency pegged to ours they are paying alot for their import needs (OIL, other raw materials) If they let their currency appreciate they loose some sales here but their costs would go down. I think we may be trying to push them into a float.

Look at the Career of both Bush Senior and Junior and you see the life of two Gamblers. Both Gambled in Oil. Both were successful (Bush Senior by being in Texas when Oil was booming, Bush Junior for being Bush Senior son when Bush Senior was VP and than President of the US).

Gamblers like to say they play the odds, but gambling addicts do not, they play their instincts. A rational person looking into Texas Oil after 1970 would have told you it was a bad investment (Texas oil has been in decline since the 1960s) but Bush Junior invested it in anyway. Why? For his father had and made money. That was good enough reason, the reports of geologists, scientist etc are unimportant to a Gambling addict, all he looks at is what he can win.

Before I go on, let me explain why Gambling is so addictive to people. Gambling is addictive for you get a huge "high" every time you win. That "high" overcomes the many "lows" you suffer from between winning. Psychologist believe this is the result of our hunting forbears, most hunts end up in losses (i.e. the game got away), but every once in a while the caveman "won" by killing his game and that gave him or her a great High. This High was great for it meant food for your family. The high from a successful hunt meant you were a successful hunter. This was true only as long as all of the number of successful hunts, Multiplied by what was the result of the hunt, exceeded what you lose every time the game escaped. People who "won" in a hunt earned there "High" and these were successful as long as over time the results of the High exceeded the low caused by hunting failure. This is where we Humans get a high every time we are successful in something. Our reward is not only a material item we "won" or otherwise obtained, but this high for having "won".

Gambling fulfills this same instinct and most gambling houses count on this instinct. Thus you will "win" many times while the house cleans out your pockets. People who lose all the time quit after a while, but someone who wins once in a while keeps on playing. The Art of the House is to make sure you win often enough to keep on playing, but over time lose more than you win. This is the Trap gambling Addicts fall into. Instead of looking into something coldly and weighing the odds, Gambling Addicts look at what they can win and makes they Judgment Solely on THAT CONSIDERATION. In simple terms, Gambling Addicts will spend and spend and spend to get a win, even if each win does not make up their previous losses. They will NOT stop until they can not gamble any more (Generally by being flat broke).

This is the best way to view Both Bushes, both are Gamblers, Senior just happen to be luckier than Junior. Like any Gambling Addict they can not quit, they will NOT consider any facts that shows their Gamble is a bad gamble. The Cost to win that Gamble in unimportant to them. That the very policy adopted to win the Gamble makes the gamble harder to obtain is unimportant. The cost of winning the Gamble is Unimportant. The cost incurred when one wins the Gamble is Unimportant.

All Gambling Addicts consider is what they can win, and in the cases of the Bushes they can win big if they control the oil of the World for the next 50 years. This concept the Bushes being Gambling Addicts explain their actions better than any other theory I have heard. They have a plan to win "big" and they are exercising it and spending all the money (and people lives) they can to win the Gamble. Bush can not pull out for as an Addict he has to keep on playing. He will NEVER withdraw, he has to be kicked out of the Gambling house and that will only happen after he can not obtain any more money. As long as he can get any type of money (and he cares less the costs of that money) Bush will keep on gambling in Iraq.

When I think of Bush as an Gambling Addict, I keep on remembering my father's old saying "I always hear of a horseman's winning, but I never saw one with a new car". The same with Bush, he will keep on throwing money into Iraq, than Arabia, than the rest of the Gulf till he runs out of money (And since he is President of the US, that means when he has spent all of our tax dollars).


T

My family doesn't care, they have Jesus!

(God with us) was the legend on the belt buckles of the Wermacht during WWII...

We'll be a third world country.

to go work at the jobs we used to have here

in a third world country. same thing.
scenery just different. you know, nike or something...

in response to why this might be happening. Because I don't think everyone in WA is as clueless as some might think. What if...just suppose...that the desired result was economic collapse, a financial 911. From what I have read, in the event of a financial collapse, martial law could be declared. Wouldn't this be a way to change the course of events? Wouldn't we all be more freaked out? I dunno, I should stop reading so many conspiracy websites, I guess.

It's probably what you all say above -- about wanting to make exports cheaper and pay the debt down quicker. I just have an active imagination.

is staggering beyond belief, no one can be this incompetent.
It's almost like they are throwing the game on purpose.

edit typo

I've been saying that for a long time -- that if somebody "wanted" to destroy this country, how could they be more efficient at it! Take away the population's health thru bad health care, insufficient, too expensive insurance plans; export good jobs; import aliens to do menial jobs; under educate the children; pump plenty of pharmaceuticals in everybody and destroy brain cells; devastate the environment; alienate the rest of the world; now they're taking away people's own dignity with the airport pat downs; unbelievable debt for the future, cutting off funds to all kinds of infrastructural needs; wrecking the economy; starting a God-forsaken war; feeding pure propaganda to the population thru state run media; those are only for starters! That's not listing the Patriot Act, the refusal to follow Geneva treaty -- broken all the treaties I guess - weakened our military at home and abroad - and I know there's still more that's I'll think of after I hit "post message." IF someone WANTED to bring down this country on purpose, how could they do a better job! They haven't missed a lick!
When Bush was appointed President in 2000, I told my sons (they were grown and gone even then, but they're eyes are wide open, thank God) to take heed, that they had (past tense emphasized) witnessed the greatness of this country in their lifetimes. Even in my pessimism, I didn't think it would get this bad.

Yes, it is probably worse that anybody might have imagined, and is getting worser and worser. And that just means more battles to fight in the goal of trying to put things right. And if we keeping fighting this way we will succeed. We will be working with the rest of the world and not against it. We will have the world on our side. That's what we have to work toward and fight for, I think. We have to reset America in tune with the world and not deaf to it, now that we've become this bad.

TexanDem, that is exactly what I believe too. They are not doing anything for the good of the country, they act only to enrich themselves at our expense.

Welcome aboard DU.:toast:

to cover this crew's agenda. This just gets more surreal by the day and as others have posted, "fuck it, got Jesus, let it slide"

attack, that would be the end of times for the US economy, it would crush us. Look what happened post 9/11, we were in the beginning of a recession then and haven't truly recovered yet, if there is another attack, the psychological blow would be devastating to the US pocket book.
What would be the outcome of that? My crystal ball won't tell me, but perhaps this is a weird sort of bizarre angel that the admin is hoping for???
Only open to speculation.

I recall him asking Japan and China to allow their money to rise against the dollar and them declining. Here's a clip from this link:
http://www.usatoday.com/news/washington/2003-10-19-bush-china-japan_x.htm


<clip>
China and Japan reject Bush's currency pleas

By Peronet Despeignes, USA TODAY
BANGKOK — President Bush failed in weekend jawboning sessions to persuade either China or Japan to quickly allow the value of their currencies to rise against the dollar, which would give U.S. manufacturers a boost as they try to sell their goods into Asian markets.

Leaders of both countries responded to the president's entreaties with a polite, implicit "no," insisting they had their own problems and that the regime of freely floating exchange rates the White House has pushed for months could undermine economic stability across Asia and the world....

As the U.S. job market continues to languish on the eve of an election year, the White House is under mounting political pressure to relieve competitive pressures on embattled U.S. factories, where the majority of U.S. job losses have occurred. U.S. employment has shrunk for 26 of the last 33 months — a stretch unmatched since the Great Depression — and by more than 2 million over the past three years. Economic growth is picking up sharply, but economists aren't sure how sustainable it is or when investment and hiring will follow.

U.S. manufacturers have complained bitterly that foreign efforts to keep the value of the Chinese yuan and the Japanese yen artificially low against the dollar have badly hurt U.S. exports. Cheap foreign currencies mean Chinese and Japanese exports sell for less in U.S. markets, while the strong dollar makes U.S. exports more expensive overseas.

<end clip>

Without their cooperation was there another way he could close the trade deficit by increasing domestic spending? But, if that's what he's about, why is he still pushing trade agreements elsewhere that are pulling jobs and money out of the US?

World Depression and the Bush plan!
Or how to kill American opposition to the new Oligarchy
by Robert W. Barker • The Netherlands • November 28, 2004

As the American dollar continues to fall in value, we must ask ourselves what are the repercussions from this dying dollar. How did the once strong dollar move toward becoming the new Peso?

There are many factors in the decline of the US dollar, most prominent is the huge deficit and economic policy created by the Bush administration!

Bush and his boys will tell you that the weak dollar will help the looming trade deficit but this is not the case! The American dollar has lost forty percent so far and it has not affected the trade deficit at all!

A projected surplus under Clinton becomes a deficit so huge we are buried in debt. Bush and his fellow culprits are liaise fair about this looming economic catastrophe. They seem oblivious to our situation, or are they hoping to kill our economic base to control the out spoken middle class population?

Borrowing from the Communist Chinese and the Japanese as well as the World Bank has left us dependent on the good graces of the world lenders; as interest rates rise, we will see a further devalue of our dollar.

Tax breaks for the top one percent of our population, coupled with out of control spending by the Bush bunch, have exacerbated, and created the problem.
Economic policies of debt created by these poor stewards of our economy have brought us to the brink of world economic collapse.

The dollars diminished by leaps and bonds over the last year until it is now about to be replaced by the Euro as the currency of preferred status.

A dying dollar could cause a global economic collapse that will leave us all in dire straights, and dissidence will become submission.

The dying dollar will murder all entitlements, Social Security, Medicare, and many more catch nets of the American people, leaving a helpless population dependent on the good graces of the rich oligarchy.

Bush and friends are staging an intentional economic collapse to kill the middle class and leave a subservient population to weak to respond, or protest. A class of peons like Mexico will result, willing to work for practically nothing, further empowering the rich oligarchy.

Starvation, disease, and chaos will follow, a subservient people would serve Bush and company well. Bush has long admired the control of the Mexican government over her people. He further plans to import and legalize illegal immigrants all willing to work for less, to help this process along! Out sourcing and corporate tax shelters also help to further this insidious plan.

Now the Russians announce that they plan to move away from the dollar as an investment tool, and Putin says he will invest in a whole basket of different currencies to offset the dying dollar. Konstantin Korishchenko Chairmen of the Bank of Russia says they are moving away from the dollar to a myriad of currencies that include the Euro. China has hinted at the same move to off set the dollars fall, we are on the way to economic collapse. Many countries are considering leaving the dollars influence and aligning themselves with the stronger Euro.

Americans do not see the world attitude change toward our Iraq policy and the US in general. Once the envy of the world we are now the perceived bullies; that many feel deserve to fall on our faces. We are disdained and hated by the world, which gives the move toward abandoning the Dollar even more emphasis. Some countries such as Japan have tried to prop up the dollar and assist our economic future but Bush and the boys do not care, so we all brace for the coming world DEPRESSION.

to be helping the company my husband works for. Semiconductor equip maker. But the stock hasn't really come back yet..