Dollar sliding further...

WRL

WRL

Well...the right is right
This is without a doubt the biggest news I've herd today. The dollar has taken a beating lately, China has been buying up t bills hand over fist, up to over a trillion, that gives them incredible sway over our economy, take for instance, recently, China threatened to sell in those T bills all at once, that was one of the major reason's for our currency's slide.

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China threatens 'nuclear option' of dollar sales

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.


Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash. It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml
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Now there is talk of...

Gulf States May End Dollar Pegs

May 1 (Bloomberg) -- Gulf states are considering dropping their pegs to the dollar after the U.S. currency's decline stoked inflation across the region, Kuwaiti Finance Minister Mustafa al- Shimali said.

`Yes, there are some'' Gulf Cooperation Council states considering dropping their pegs to the dollar, which has fallen 13 percent against the euro in the last 12 months, al-Shimali said in an interview in Kuwait late yesterday without naming the countries.

Al-Shimali's comments may restoke speculation of a change in Middle East currency systems that eased after the United Arab Emirates and Qatar last month ruled out any revaluation or dropping the dollar peg in the short term.

Gulf Inflation

Inflation is running close to 10 percent in Saudi Arabia and the U.A.E., while Qatar's consumer prices rose 14 percent in the fourth quarter.
The Kuwaiti dinar has appreciated 7.9 percent against the dollar since the nation in May became the only Gulf Arab state to drop its peg to the U.S. currency. Contracts to buy U.A.E. dirhams in 12 months time are trading at a 2 percent premium and Saudi riyal forwards are trading at a 1.3 percent premium to the spot price, suggesting that some traders are betting that those countries will follow Kuwait in revaluing.

`The case for currency reform is strong,'' Simon Williams, chief Middle East economist at HSBC Holdings Plc, said in a telephone interview from Dubai. ``The inflationary pressures the Gulf faces not only demand a stronger currency, they also require an independent monetary policy. The issue is not going to go away, but I don't believe that change is close.''

read entire article here...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKafZEdY2xF8&refer=worldwide
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None of the Presidential candidates are taking the sliding dollar serious enough, this reverberates throughout the economy, making everything more expensive, and is eroding our place at the top of the economic hill. This issue get's overlooked like it's trivial, but it is not, it's one of, if not the largest problem we face today. So what are peoples idea's on how to address this issue?
 
US dollar falls slightly after Fed cuts key interest rate

NEW YORK - The dollar slipped Wednesday after the Federal Reserve announced it cut a key interest rate by a quarter-point, a move that investors had anticipated.


http://www.forbes.com/feeds/ap/2008/04/30/ap4956239.html

Not that you'd have to be a complete moron to not know about the overall dip we've taken lately...
 
The trend over the past few years is down, and these are serious underlying factors don't blow them off.
 
I'm with you if your factual, I don't have a clue. I've always hear Iraq is not in the budget figures, My gut says is increasing with Iraq. Do you know the total number????
 
WRL said:
The trend over the past few years is down, and these are serious underlying factors don't blow them off.
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Topspin doesn't understand very much about economics. He doesn't understand inflation. All he believes is "more millionaires than ever before" is unconditionally good. He blows of all facts and truth, and even blows off monkeys.
 
Whos going to buy them? At what price? Who will lose if they sell them for less than they bought them?
 
Obfuscate said:
Whos going to buy them? At what price? Who will lose if they sell them for less than they bought them?
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That's not the point. You're a market guy, you should understand that an excess of something with no buyers means value goes to rock bottom.

Who will lose? Everyone whose life savings is in dollars. That's the short answer.
 
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AssHatZombie said:
That's not the point. You're a market guy, you should understand that an excess of something with no buyers means value goes to rock bottom.

Who will lose? Everyone whose life savings is in dollars. That's the short answer.
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Why about 50% of my money is in gold and about another 25% in conservative real estate ie farmland.
 
Obfuscate said:
Whos going to buy them? At what price? Who will lose if they sell them for less than they bought them?
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\

The US Government, it's basically an IOU to the Chinese Government of nearly a trillion dollars, keep in mind we are 400 billion in deficit, and 9 trillion in the hole. We can't pay them all back, it would destroy the value of our currency, and our economy, as our house of debt gets called in and we can't pay.
 
The point is it hurts them as much or more to do that so it wont happen. Their not going to stock up on T Bills just to sell them at a huge loss.
 
Obfuscate said:
The point is it hurts them as much or more to do that so it wont happen. Their not going to stock up on T Bills just to sell them at a huge loss.
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They will do it just to collapse the american economy.

According to your same logic, suicide bombers should not be feared.
 
by us lowering the value of the dollar we are actually hurting China who notoriously keeps there yaun discounted as much as 40%. Also we are dollar bombing Europe. Its part of the currency war to stop the trend of off shoring and losing our business... however we pay the price by losing half the value of our savings. Sucks
 
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