Some scary stuff about the dollar
 

I guess from the Sporting Events forum (?) that the Canadian dollar has caught the US dollar. I remember when it was almost 2 to 1. Vancouver strip clubs get a lot less fun at this rate.

Here's some other scary reading:

http://www.telegraph.co.uk/money/mai...cnsaudi119.xml

http://www.telegraph.co.uk/money/mai...nchina107a.xml

My buddy who's fairly accurately predicted the dotcom collapse and housing collapse (yes they both seem obvious in restrospect, but at the time very few people in the public eye were actually predicting collapse) is pretty well convinced a dollar collapse is coming. But then again he's also been predicting a DOW collapse since 2000 as well, and we're still waiting for that one.

Re: Some scary stuff about the dollar
 

this could be a real problem for me, as i'm a british online poker pro, so spend in pounds (which are strong) but earn in dollars (which are weak and weakening), and also have quite a bit of money on poker sites in dollars (not loads by high stakes players' standards, but enough that a collapse would be painful for me). how likley to people think a collapse (or just a fairly dramatic decline over the next few years) is? there are sites where you can play in pounds, instead - do people think this is a sensible precaution to take?

Re: Some scary stuff about the dollar
 

could this be why absolute (which is a canadian company) can do the 9% interest for elite accounts?

Re: Some scary stuff about the dollar
 

Suzzer,

Your friend sounds like a real pessimist.

Re: Some scary stuff about the dollar
 

Yes he is. He got fired from Amazon while the stock was blowing up. A lot of customer service reps he worked with went on to be worth $millions in options (couldn't quite cash out that much, but still a nice $500k or so). I think this left a bit of a bitter taste in his mouth.

But he was right about the dotcom thing, even from the beginning when everyone was still drinking the koolaid. Those were fun times to be on The Motley Fool message boards.

Re: Some scary stuff about the dollar
 

People have ben talking about this in finance for the last 6 months. Dont think a collapse will happen, but the dollar is certisnly likely to go lower still. If you are american, it doesnt really matter much as long as most of your costs are in USD. The real issue is for people like me who make all their income in american dollars and all our expenses are in canadian dollars.

Re: Some scary stuff about the dollar
 

fwiw, i know someone who is likewise convinced the apocalypse is comming. to the point hes putting like 40k into gold.

Re: Some scary stuff about the dollar
 

So what if you think it's going to happen? What's the best investment - foreign stocks, bonds, US stocks, money market? (Basically I'm listing off the options in my 401k, sadly gold and a plasma TV are not options.)

Re: Some scary stuff about the dollar
 

[ QUOTE ]
could this be why absolute (which is a canadian company) can do the 9% interest for elite accounts?

[/ QUOTE ]

can someone tell me more about this?

thanks a lot,
tc

Re: Some scary stuff about the dollar
 

[ QUOTE ]
[ QUOTE ]
could this be why absolute (which is a canadian company) can do the 9% interest for elite accounts?

[/ QUOTE ]

can someone tell me more about this?

thanks a lot,
tc

[/ QUOTE ]

Absolute offered 9% interest to VIP players to lure more money onto the site and then used super-user accounts to take said money.

But seriously, more information can be found here.

Re: Some scary stuff about the dollar
 

The sky is definitely falling. Only a matter of time really.

Re: Some scary stuff about the dollar
 

[ QUOTE ]
People have ben talking about this in finance for the last 6 months. Dont think a collapse will happen, but the dollar is certisnly likely to go lower still. If you are american, it doesnt really matter much as long as most of your costs are in USD. The real issue is for people like me who make all their income in american dollars and all our expenses are in canadian dollars.

[/ QUOTE ]

When the dollar is very weak internationally, the best place to unload weak dollars is inside the US. This will cause a lot of foreign held USD to come back within the borders, which is going to cause massive inflation when the [censored] hits the fan. I refer you to the 1970s.

Re: Some scary stuff about the dollar
 

It also obviously raises the prices of imports in the US.


My savings are in dollars and I earn in dollars while spending in Euros, so I'm [censored].

Re: Some scary stuff about the dollar
 

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If you are american, it doesnt really matter much as long as most of your costs are in USD.

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Given the staggering amount of goods this country imports, I am pretty sure your average consumer is going to get pinched. Coincidentally, I think this is exactly what the Fed wants.

Re: Some scary stuff about the dollar
 

Didnt say there wouldnt be inflation in the states due to relatively more imports (no more cheap imports stemming inflation) but this should help the US economy avoid a recession when people start buying more Us products.


On a side note, I made a book order from amazon.com yesterday for 96$ USD/Can (doesnt matter anymore) after a 11$ shipping cost, while I bought the exact same books from chapters.ca for 115 with free shipping (I canceled the order).

Re: Some scary stuff about the dollar
 

As a Canadian with some American student loans...


WOO HOO!!!

Re: Some scary stuff about the dollar
 

and since we are talking about currency conversion.. Ven-star

has anyone ever used these guys? they claim to do large currency transactions (avg. is 150k) for private individuals at much better rates than banks.

Re: Some scary stuff about the dollar
 

[ QUOTE ]
So what if you think it's going to happen? What's the best investment - foreign stocks, bonds, US stocks, money market? (Basically I'm listing off the options in my 401k, sadly gold and a plasma TV are not options.)

[/ QUOTE ]

US purchasing power decreases- Chinese purchasing power should increase once they stop pegging their currency to the US dollar, companies which have trading rights in China are a good bet in my view.

Re: Some scary stuff about the dollar
 

so i have a question...

if i am in a massive amount of debt (at a fixed interest rate), and the dollar suddenly gets totally devalued, this is a relatively good thing for me, right? i mean people who have a net worth >0 get fux0r3d, but my real debt actually shrinks!

Re: Some scary stuff about the dollar
 

[ QUOTE ]
so i have a question...

if i am in a massive amount of debt (at a fixed interest rate), and the dollar suddenly gets totally devalued, this is a relatively good thing for me, right? i mean people who have a net worth >0 get fux0r3d, but my real debt actually shrinks!

[/ QUOTE ]

That's not really a question, but yes, your debt shrinks.

Re: Some scary stuff about the dollar
 

there was a question mark in there

i was pretty sure this was the case but i was trying to come up with a good reason why it's not. it feels kinda like cheating.

Re: Some scary stuff about the dollar
 

your real debt shrinks only if there is real inflation higher than the lender forcasted at the time you went into debt

Re: Some scary stuff about the dollar
 

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pretty well convinced a dollar collapse is coming

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Don't you think you guys are a little late to the party? In the past 5 years the USD is:

-30% vs euro
-22% vs £
-36% vs Canadian $
-56% vs gold

I'm not saying the US$ is not going to continue to fall, but you guys missed a lot of the action already.

Re: Some scary stuff about the dollar
 

We should change the president's on the face and call them something new just to shake things up.

Re: Some scary stuff about the dollar
 

So if I am a Canadian and my source of income is in American dollars (Online), what's my best play as of now? Do I keep the money in my online poker accounts if I don't need to spend it or do I take it out and exchange it or what? Sorry for the newbish question, I don't know much about this kind of stuff.

Re: Some scary stuff about the dollar
 

So how does it work if I invest in an international mutual fund? Does it gain just by the dollar falling? Can I buy a European CD or something?

Re: Some scary stuff about the dollar
 

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i was pretty sure this was the case but i was trying to come up with a good reason why it's not. it feels kinda like cheating.

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Even better, I have family in Canada. Let's have it keep going down, I'll go up there, work for a bit make a lot of US$ and be set. Man, you Canadians had it so easy for a while there.

Re: Some scary stuff about the dollar
 

please explain how a dollar "collapse" is different that the dollar just continuing to slide down as it has for the last several years?

I'm not trying to be sarcastic, I really don't know what a full collapse would be or what it would mean for the US economy.

Re: Some scary stuff about the dollar
 

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So how does it work if I invest in an international mutual fund? Does it gain just by the dollar falling? Can I buy a European CD or something?

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Yes, the stocks in the fund are denominated in foreign currencies and therefore gain dollar-denominated value if the dollar slips. Some funds hedge, the vast majority do not.

Re: Some scary stuff about the dollar
 

[ QUOTE ]
this could be a real problem for me, as i'm a british online poker pro, so spend in pounds (which are strong) but earn in dollars (which are weak and weakening), and also have quite a bit of money on poker sites in dollars (not loads by high stakes players' standards, but enough that a collapse would be painful for me). how likley to people think a collapse (or just a fairly dramatic decline over the next few years) is? there are sites where you can play in pounds, instead - do people think this is a sensible precaution to take?

[/ QUOTE ]

I don't know what you consider a "collapse" vs a "fairly dramatic decline". The dollar has stunk and will get worse with the Fed cut. It could really dump with another cut. As bad as it is for foreigners with U.S. dollars, it is very, very bad for Americans. Imported goods, including oil products, will go up significantly. Interest rates are already going up as investors slow down their dollar buying (t-bonds and notes) and may really fly if they dump their dollars. It's going to suck, huge.

Re: Some scary stuff about the dollar
 

[ QUOTE ]
please explain how a dollar "collapse" is different that the dollar just continuing to slide down as it has for the last several years?

[/ QUOTE ]

Currently there are trillions of USD being held outside of the US. As the USD slips, those holdings lose value. So all those holding them have a depreciating asset. At some point, the rats are going to desert that ship. This will precipitate the sell-off of USD, and their international value will literally plummet (imho of course).

Once the international value tanks, people are going to be stuck with all these devalued dollars. They will try to recoup their losses. How will they do that? They will buy up anything and everything they can get their hands on that they can buy with USD. But the only place that will be will be the United States. Exports will skyrocket. Foreign investors will buy up American real estate and companies, you name it. The trade deficit will become a trade surplus (which is not a good thing, no matter what Lou [censored] Dobbs thinks). All of those dollars flowing back into our economy will creat massive double digit inflation.

Meanwhile, our inflation-bubbled economy is certainly going to pop at the same time, meaning we will get a massive recession. We'll have massive inflation and a recession, just like the 1970s.

The value of gold will skyrocket as people look to get out of USD that are losing value daily. This happened at the end of the 70s as well. Gold hit $800 per ounce in late '79. In today's inflated dollars that's like $2400. Currently it's at like $735 and climbing _fast_.

Central banks prevented gold form spontaneously remonetizing in 1980 by instituting massive gold dumping to crash the market value of gold and convince people that their inflation hedge bet had failed. It worked. Central banks have been gold dumping off and on for 30 years to control the price of gold.

But my gut feeling is that there is not enough gold left in the central banks of the entire world to prevent it again. So the dollar will crash, we will get a massive recession + massive inflation and a flight to gold. The price of gold will double or triple or quadruple. Central banks will dump gold, but it will fail. If they do try this, and the price of gold crashes, you should buy as much as you can, because when they do this they will be putting real money back into circulation and you want to have as much of it as you can get. Gold will spontaneously remonetize, and the world fiat currency order will collapse.

That's my theory.

Re: Some scary stuff about the dollar
 

so boro, you contributed to the brainwashing of my friend?

Re: Some scary stuff about the dollar
 

We were probably brainwashed by similar people.

Re: Some scary stuff about the dollar
 

As an American living abroad, what can I do to limit my losses as the dollar plunges? Right now all of my accounts (poker, savings, ewallets) are in dollars.

I just started typing out a detailed description of my situation and realized it wasn't relevant. Saving or investing in, say, euros is probably not an option because I would need to convert between that currency and dollars and the associated fees would probably eat up anything I save.

Re: Some scary stuff about the dollar
 

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We should change the president's on the face and call them something new just to shake things up.

[/ QUOTE ]

Brilliant! Sacajawea was played out anyway.

Re: Some scary stuff about the dollar
 

[ QUOTE ]
so i have a question...

if i am in a massive amount of debt (at a fixed interest rate), and the dollar suddenly gets totally devalued, this is a relatively good thing for me, right? i mean people who have a net worth >0 get fux0r3d, but my real debt actually shrinks!

[/ QUOTE ]

Only helps if there is wage inflation. Possible scenario is that wages stagnant,cost of living inflates and most people's standard of living goes down.

Re: Some scary stuff about the dollar
 

more scary dollar stuff...oil-rich countries are switching to other currencies:

Venezuela (Citgo) dumps the USD
http://www.bloomberg.com/apps/news?p...d=aZ62iRNzmRo0
Sept. 16 (Bloomberg) -- Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk. Chavez, speaking in his weekly address on national television, said the U.S. has bought goods from around the world, paying with paper that is ``a bubble.'' ...


Iran moves to ditch U.S. dollar
http://www.upi.com/International_Securit...us_dollar/6990/
WASHINGTON, Sept. 10 (UPI) -- Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros, despite increasingly desperate need for investment.

In a deal announced last week, Japan’s Nippon Oil agreed to buy oil from Iran using yen instead of the traditional U.S. dollars. The agreement comes after years of Iranian efforts to shift its petroleum exports away from dollars and toward yen and euros..

Re: Some scary stuff about the dollar
 

most importantly, this sucks for my upcoming Europe vacation [img]/images/graemlins/frown.gif[/img]

I remember working there about 5 years ago, and the Euro was worth about $.75

yikes

Post deleted by Mat Sklansky
 

Re: Some scary stuff about the dollar
 

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Only helps if there is wage inflation. Possible scenario is that wages stagnant,cost of living inflates and most people's standard of living goes down.

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This is exactly what's been happening for years.


[ QUOTE ]
more scary dollar stuff...oil-rich countries are switching to other currencies:

Venezuela (Citgo) dumps the USD
http://www.bloomberg.com/apps/news?p...d=aZ62iRNzmRo0
Sept. 16 (Bloomberg) -- Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk. Chavez, speaking in his weekly address on national television, said the U.S. has bought goods from around the world, paying with paper that is ``a bubble.'' ...


Iran moves to ditch U.S. dollar
http://www.upi.com/International_Securit...us_dollar/6990/
WASHINGTON, Sept. 10 (UPI) -- Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros, despite increasingly desperate need for investment.

In a deal announced last week, Japan’s Nippon Oil agreed to buy oil from Iran using yen instead of the traditional U.S. dollars. The agreement comes after years of Iranian efforts to shift its petroleum exports away from dollars and toward yen and euros..

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Some people have written that this is one of the main reasons for the current war. To ensure that the USD remains the currency for the oil trade.
http://www.ratical.org/ratville/CAH/RRiraqWar.html

Petrodollars Wikipedia