shrinking dollar is about to make all our lives a living hell

[johnjzjz]

don't know how many actually know and see what is going on in the stock market, but it has not gone on un noticed by the foreign traders, and our dollar is dropping and dropping hard, and everything real soon is going to be much more to buy, gas is going to sky rocket as well as heating oil just in time for winter, was up yesterday today its way down


YOUR THOUGHTS

[MTUpower]

Originally Posted by johnjzjz

YOUR THOUGHTS

My wages will go up with inflation and my mortgage will not.

[Kuan]

Made in USA will be more affordable.

Originally Posted by MTUpower

My wages will go up with inflation and my mortgage will not.

Good point, inflation will reduce existing debt but the interest rates on new debt will increase and credit avaibility may be affected. You don't want to be holding a lot of capital in dollars during a period of inflation.

That being said, I don't have any reason to believe the U.S. is entering an inflationary cycle and don't intend to do anything differently.

[Chas H]

I bought my heating oil months ago for a fixed price.
Our goods will be more affordable and tourists money will go further, so we might have more of 'em.
A depressed dollar is not all bad, and a strong dollar is not all good.

[MTI]

As long as the roots are not severed, all is well. And all will be well in the garden. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.

Yes! There will be growth in the spring!

[cmac2012]

I'm afraid the downside will be greater than the upside. We've been a long time getting to this point. No one leader alone is responsible, IMO. It's our culture that is flawed, not any one part of it.

[Fitz]

Originally Posted by Kuan

Made in USA will be more affordable.

So will Made in China...the currencies are joined in an unnatural union.

[MTUpower]

Originally Posted by MTI

As long as the roots are not severed, all is well. And all will be well in the garden. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.

Yes! There will be growth in the spring!

You are such a fountain of great informational knowledge.

Here- I'll post your next one for you...

After night comes the dawn... then soon it will be high noon, but the sun will slowly sink and then it becomes evening and that flows into night.

By the way, who thinks we are about to have a weak dollar/inflation, and why?

Is this just a response to the stock market finally starting to move, or is there a serious analysis someplace?

[Hatterasguy]

Everyone likes to panic.

I don't see massive inflation coming, I'm not going to run out and covert all my cash to gold bars.

Yup, the dollar was pretty weak for a few years until the market fell, that created some demand for dollars and strengthen it. Not the market is starting to move and people are jumping back in (at least a little) which is bound to drive the dollar down a little.

That's all OK, but it will show up in energy prices (as it should) and get everyone in a tizzy about inflation. It won't be a problem unless it gets out of hand. It's a good chance to pay off debt and get into the market again. I'll start to worry if I see growth rates in the 5-6% range.

The oil industry is predicting $100 plus oil prices again, but who knows if they are for real or just trying to drive their stock prices.

[cmac2012]

Originally Posted by PaulC

Beat the rush and run out and buy a wheelbarrow now, so you can bring enough money to the store next week to buy a loaf of bread.

Oh dude, am I way ahead of you. I've begun manufacturing wheelbarrows in China and we have some very competitive models on the market.

[kknudson]

I trade currencies, FOREX, although primarily on technicals not funnymentals. But I do have to study them.
I tend to be a short term trader though, minutes, hours, sometimes a day.

Below are comments and observations.

"Drop hard", NO the dollar is not (yet) dropping hard, so far it is holding a relatively orderly decline. (although while I wrote this it has taken a nose dive)

Dollar correlation to the market, dollar down market up, our equities become cheaper to foriegners and vice versa.

I do though see the $ continuing it's decline both via technicals and funnymentals, at least for the foreseeable future, 12 to 18 months.

The cheaper dollar allows us to borrow cheaper, for now, how longer with the rest of the world (primarily the Chinese) continueto buy our debt.
The cheaper dollar makes our exports cheaper, look to buy companies that ship their product overseas, not just international companies.

The cheaper dollar affects the cost of raw materials as they are priced in dollars. Dollar up Oil down ...
This is forming (IMHO) a commodities bubble, although I am not committed to it yet.
Oil exporting countries have or try to sell their oil in other currencies.
Countries buying HUGE gold reserves, India made a huge purchase last week AT MARKET price.

For now though there is no currency with the strength and liquidity of the $, again for now, that is why it is considered the reserve currency.
Talk of another currency taking it's place or creation of a world currency (bad for us, but really the correct thing imho) are years maybe a decade off.

How to fix it, what will change the direction ?
Get our house in order, fix the debt problem, Geesh I'm a comedian, well you get the picture.
Raising interest rates, mid to late next year (imho) can the boys in DC time it right. Personally I have 0 confidence, and think they might start in the 2nd quarter to mid next year. This could whack the economy.

Inflation the wild card that I have no opinion or observations, just haven't looked at it. You need to look at real inflation, not the funny numbers the government puts out.

OK I have to get back to trading hope this gives you some ideas, thoughts and things to research if you really care. I can try to answer some ?s but again trade mostly on the technicals.

"This is forming (IMHO) a commodities bubble, although I am not committed to it yet."

That's interesting, are you concerned that people are going to dump dollars and jump into commodities (oil) and drive the price too high because they don't really have anyplace else to go? It wouldn't be the first time.