[smiley]

$this->bbcode_second_pass_quote('', '8')0 has supplied pretty strong resistance on the dollar index.

[Tyler_JC]

Roccland, the Yen is staying within a fairly reasonable range.

Call me when the Yen moves 5%+ in one day.

These small movements over the course of a couple years produce exactly the kinds of changes that need to happen in trade and interest rates.

Basically, the world economy is responding just like the models predict.

Dollar drops, interest rates rise, US citizens cut back on spending and increase savings, foreigners spend more and save less, etc.

US Bond Yields (feel free to play around with the chart)

The yield on 5 year bonds has doubled in the past 4 years. The yield on the 10 year has increased by 50%.

As this trend continues, borrowing will become more expensive (thus there will be less of it) and consumption in the United States will decline, replaced by savings.

Deficits have a way of correcting themselves.

I'm not saying we will escape unscathed but we certainly won't collapse like Zimbabwe.

[Tyler_JC]

$this->bbcode_second_pass_quote('firestarter', '8')0 has supplied pretty strong resistance on the dollar index. If (and this is a BIG if) we see a breach, say, this week or next, then I've seen it predicted by a number of non tin foilers that BB will intervene immediately with as much as a 50bp hike, even if that guarantees an acknowledged recession shortly down the road. It probably won't breach the 80 barrier, but I'm gonna have fun watching it teeter on the brink.


Scary dollar chart:

FX dollar index chart

[Roccland]

$this->bbcode_second_pass_quote('Tyler_JC', ' ')A few more of those and the trade picture will fix itself, thus strengthening the dollar.

[firestarter]

$this->bbcode_second_pass_quote('Tyler_JC', '
')
From July, 2004 to July, 2007, the dollar fell in value by 10%.

A few more of those and the trade picture will fix itself, thus strengthening the dollar.

[Roccland]

$this->bbcode_second_pass_quote('firestarter', ' ')Is hamburger flipping a tradeable item?

[smiley]

$this->bbcode_second_pass_quote('', 'b')tw, we have been in the 80's territory before during 2004

[Tyler_JC]

I think the magic "80" number for the dollar index is like the magic $40 a barrel figure for oil, or the magic $50 a barrel figure...or the magic $60...or $70...or $80.

There is no single point that leads to a collapse of a currency.

So long as the United States can pay for the interest on its international debt obligations, we won't see a massive run on the dollar.

The trade deficit is artificially large against countries like China and Japan because of an artificially strong dollar.

We need to see the Yen and Yuan appreciate before American exporters can compete in the Asian marketplace.

[firestarter]

$this->bbcode_second_pass_quote('Tyler_JC', 'I') think the magic "80" number for the dollar index is like the magic $40 a barrel figure for oil, or the magic $50 a barrel figure...or the magic $60...or $70...or $80.

[frankthetank]

Thats what i was thinking. Only things we produce being food (corn, soybeans,etc) and airplanes (which have been selling well). Only thing i see holding the dollar up is its link to oil.

[Tyler_JC]

The first pie chart breaks down the components of US exports.

The second pie chart breaks down the components of US imports.

As you can see, food and beverages account for a mere 5% of exports.

[firestarter]

Tyler_JC,
Not to be rude, but do you understand what globalisation means relative to America's manufacturing of tradeable goods....and services? Have you missed the emasculation of America's manufacturing base subsequent to the mid 90's trade agreements? Are you like Tom Friedman, and believe the world is flat? Please elaborate on how a falling dollar magically makes America a manufacturing giant again, since it hasn't for the past fifteen years. Do you see anything negative relative to the American economy? I'm trying to plumb where you are coming from. You confuse me as to your economic worldview.

[firestarter]

BTW, exports account for about 11-1/2 % of real GDP, while consumer spending accounts for 70%. Pray tell how the falling dollar changes this dynamic in a positive way for America's hollowed out, consumer bubble economy?

[CrudeAwakening]

I really don't see how the US trade deficit can approach any semblance of self-correction merely though dollar devaluation. The problem is a structural one, as Firestarter points out, and I don't see this structural imbalance being addressed by a falling dollar.

[I_Like_Plants]

$this->bbcode_second_pass_quote('firestarter', 'T')yler_JC,
Not to be rude, but do you understand what globalisation means relative to America's manufacturing of tradeable goods....and services? Have you missed the emasculation of America's manufacturing base subsequent to the mid 90's trade agreements? Are you like Tom Friedman, and believe the world is flat? Please elaborate on how a falling dollar magically makes America a manufacturing giant again, since it hasn't for the past fifteen years. Do you see anything negative relative to the American economy? I'm trying to plumb where you are coming from. You confuse me as to your economic worldview.

[Roccland]

$this->bbcode_second_pass_quote('I_Like_Plants', '')$this->bbcode_second_pass_quote('firestarter', 'T')yler_JC,
Not to be rude, but do you understand what globalisation means relative to America's manufacturing of tradeable goods....and services? Have you missed the emasculation of America's manufacturing base subsequent to the mid 90's trade agreements? Are you like Tom Friedman, and believe the world is flat? Please elaborate on how a falling dollar magically makes America a manufacturing giant again, since it hasn't for the past fifteen years. Do you see anything negative relative to the American economy? I'm trying to plumb where you are coming from. You confuse me as to your economic worldview.

[chuck6877]

I think this is an interesting historical chart of the U.S. Dollar. The U.S. dollar has been in a descending parallel channel since 2002. The big decisive point is less than a couple months away.

It will either break out of the channel to the upside or we will see new all-time lows and the world probably all running for the exits all at once.

[web]http://www.321energy.com/editorials/holt/holtchart070707.html[/web]

[firestarter]

$this->bbcode_second_pass_quote('I_Like_Plants', '')$this->bbcode_second_pass_quote('firestarter', 'T')yler_JC,
Not to be rude, but do you understand what globalisation means relative to America's manufacturing of tradeable goods....and services? Have you missed the emasculation of America's manufacturing base subsequent to the mid 90's trade agreements? Are you like Tom Friedman, and believe the world is flat? Please elaborate on how a falling dollar magically makes America a manufacturing giant again, since it hasn't for the past fifteen years. Do you see anything negative relative to the American economy? I'm trying to plumb where you are coming from. You confuse me as to your economic worldview.

[Kristen]

At the moment there are only around five currencies stronger than the U.S. dollar. When it gets to ten We might be screwed. We live in interesting times, that's for sure.