Dollar in Serious Trouble

The people in this country that are in real serious trouble are the ones who bought houses with loans of over 100% on sliding scales or baloons. These are the same kind of people who have maxed out credit cards and car loans etc. Kind of like the way Uncle Sam is running the country. All good things come to an end. I wonder if China will put us all out on the street too. They are certainly running out of room fast in their country. If we could just get them interested in fighting our wars for us, then we would be in fine shape.

I have no idea what the answer is. I think we had better get ourselves back on track in our government. The jobs are leaving, that pay anything or that are not run by foreign companies. We are in serious trouble, I know that, but they will not totally admit to it.

I dont think the doller rate will come down further, if it does we will also recommend mylot to pay in euros like the Israels.

Many people are not aware that most of our foreign oil imports come from...Canada. Not the Middle East. I think it's truly high time that we start using alternative energy sources, which we already have access to. There are a few people in high places who are making an obscene amount of money from the oil imports in this country, and they are bringing our economy down. We, the people who live here, can change that if we so choose. I don't know how much further the dollar can decline, but if we stopped so much trading for oil and stopped trading with China so much, a country that changes the value of their currency on a weekly basis, we'd probably be much stronger.

Great topic. It doesn't seem so bad on the surface as the dollar drops in value verses other currencies. The major problem is the debt load in this country. Led by the government, business and the public, debt levels are at major peaks. Since 9-11, this country has built a rebound based on flimsy money. That is, the creation of major new amounts of debt. We have seen the problems in the credit markets and really no one has any idea as to how deep these problem will go and spread throughout the economy. We are finding that out at this time. Now the Fed is again lowering interest rates attempting to block a downturn in the economy. Dah! This is not the problem. There is still plenty of money propping up the economy. The problem as I see it is that we can no longer keep adding to our debt levels. Look at the last 5-10 years and you can see it has been the housing ATM cash machine (borrowing against home equity) accounting for almost half of our economic growth. This also includes construction spending as a main prop for growth. Now that these major economic props are disintegrating, the economy is slowing. Can we trust the inflation numbers? Has your personal inflation rate been only 2% ? I know mine isn't. Can we trust the employment numbers when they come out minus 4,000 jobs, then revised to plus 98,000 jobs and then revised again to plus only 48,000 jobs? What can we believe? Anyway, as long as interest rates are falling, the rate of return on invested dollars from abroad will fall. Again, the major problem is too much debt. We cannot continue to live on borrowed money to support our life styles. Just like we experienced excess in the markets in the late 1990's, we are now experiencing excesses and overuse of credit. Eventually this will be balanced out, but getting there is the problem. Take your pick, the government will have to inflate (print even more money) to keep us afloat or let things resolve themselves and possibly see a severe recession and even deflation (as is occurring in the housing markets today). I think the solution will be painfull as rates have to rise and excesses worked through. This cannot be done in a few months. It will take years. If you think it is bad now, just wait another decade when the government begins in earnest to payout all those promised goodies like social security and medicare. Bottom line: in pure terms of numbers and by any normal accounting standards (not the fuzzy-wuzzy accounting used today), the US is fianacially broke. The fed will, along with the politicians put off the day of reckoning as long as possible and therefore the resolution will be that much more devastating and painfull. It is fine to live high on the hog like many have in this country, but without real assets to back up that spending, all that fluffy debt created money will burn up in smoke. Remember, all assests go through cycles of inflation and deflation, and yes even the housing markets. It happens in commodities, gold coins, stocks, bonds, currencies and all other asset classes. In a way, debt is an asset in that it can be used to buy goods and services. So, the cycle theory applies to debt also. The dollar will continue to erode until this country takes steps to return to solvency. That will be less debt, more savings, less taxes and less overspending by the government.

Some people are investing in gold and silver bars. I know a few people doing that. The same folks talk about another market crash like the Great Depression where they will freeze bank accounts (Why so many back then hoarded money under mattresses). Some are keeping some money out of the bank as well. Good luck.

Consider this, if Europe unites around a single currency with 5 times the economic power of US they would undoubtedly force US to lift its restrictive trade practices causing further decline in US economy. I don't think anything can be done, in fact from a European perspective, I think it could be a good thing, an economically dominant Europe would, I believe, lead to more responsible international affairs. all the best urban

oh yes, and we should perhaps de privatize the "federal" reserve. whats up with that?

I think a solution would be to go back to the gold back currency, stop outsourcing or limit the amount of outsourcing an "american" company is permitted to do. It think the outsourcing to other countries is a real big kick in our keesters. Teach work ethics to children rather than self pride which haves them going out into the world thinking it and everyone in it owes them something rather than being willing to serve and help.

There's no solution.The only problem which can be a disaster for USA is when China stops supporting the dollar then it will be a disaster,but that's an if. Don't forget that the english pounds is higher than the Euro. And also China's economy is growing faster and faster.

Yeah, I heard too that the dollar value is dropping. It affected our company since it's main product is for export. If this goes on there will be a lot of countries in trouble. I think bush should do something to gain back the value of dollar.

"according to a discussion I heard last night,it is growing worse", is it real? If it was true,the global economy would suffer cold snap, and I have to reoder my stock,hah, due to the depreciation of dollar, the RMB increment is great influencing factor on the securities business in China. I have lost much money in the securities business !

There is nothing to worry about,the earth is a village now,and the economy is globlized.Whings will turn better.