Will the US dollar ever regain its former glory?

Discussion in 'Politics, Religion, Social Issues' started by Unspeaked, May 6, 2008.

  1. Unspeaked macrumors 68020

    Unspeaked

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    #1
    The US dollar is at or near all-time lows against several international currencies.

    This is due to all sorts of factors, from falling interest rates to trade deficits to national debt and more.

    Though I'm confident the US economy will rebound from the current "recession" and housing slump, I'm not so sure the dollar will rebound with it.

    What do you think? Is the US dollar doomed? Will it ever return to its valuation of even 3 or 4 years ago? WIll it ever be the world's de facto currency again?
     
  2. leekohler macrumors G5

    leekohler

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    #2
    Nope- it's done. We had our day as Empire of the Planet. W is quickly bringing that to a swift end.
     
  3. jb60606 macrumors 6502a

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    #3
    it'll rebound, though, not to the astronomical highs (versus other currencies), for long, sustained periods of time anyways.
     
  4. Rodimus Prime macrumors G4

    Rodimus Prime

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    #4
    It will rebound. It part of a cycle. There is not really a chance of the dollar replacing the currency of the world for very long time.

    Look back at history at how long it took the pound to be replaced by the dollar. It was a long time after England was replaced by the US as major economic power house of the world.

    It will be the same way here. Just this time the US is still a major economic power house. May not be number one but still a major player.

    The pound was replaced by the dollar a long time after england was removed from being one of the top power houses of the world.

    It is still the world currency even though it is weak. it still what everything is traded in.
     
  5. Ugg macrumors 68000

    Ugg

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    #5
    I'm not sure.

    Economists underplay the psychology of a currency. They tend to think that economic models are devoid of human desire, greed, passion, hatred and do so to their own peril.

    A case in point is the Deutschmark. For many years after the end of WWII, the DM was very undervalued due to the taint of Hitler. The DM's low valuation meant that Germany became a major exporter because the ECONOMISTs, despite their insistence that an economy is devoid of passion, hatred, etc, had an adverse reaction to the DM. That changed dramatically in the 80s and Germany paid a rather high price for it.

    Anyway, if the world continues to view the Dollar as undesirable due to non-economic reasons, we could see a prolonged Dollar slump. The rise of BRazil, India and China or BRIC and the EURO means the Dollar has a much less appeal as a desirable and safe currency.

    It may be awhile before Lee's dire forecast comes true, but the Dollar's dominance definitely belongs to the annals of history, not the prophecies of the future.
     
  6. Peterkro macrumors 68020

    Peterkro

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    #6
    A lot of what's happening in the world at the moment (Iraq,Iran,Venezuela etc) is partly driven by the desire of the US government to keep oil trading in dollars and various producers wanting a move to the euro. The Yuan is the currency to keep a eye on.
     
  7. SMM macrumors 65816

    SMM

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    #7
    A US company could finally invent super-conductor, or an other significant product. As sole source, many positive results would occur. We could also do many other positive things to strengthen our economy, which would do the same thing, but over a longer timeframe. So, the question is impossible to answer, as it requires the ability to predict the future. However, our mega corporations really have no nationally loyalty. They will only make decisions based on their bottom line. They are our worst enemy.
     
  8. Peterkro macrumors 68020

    Peterkro

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    #8
    While I generally agree with what your saying I must point out that in no way are they "our mega corporations",unless you one of the truly evil bastards who have control of these truly International entities (try finding out who actually owns a "mega corporation" and you'll very quickly come up against a very solid brick wall).
     
  9. solvs macrumors 603

    solvs

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    #9
    As pointed out many a time, while this is part of a natural rise and fall, our policies and mistakes in the past few years have certainly made things far worse. The rising debt a big part of that. The Iraq war, rising oil prices, tax cuts that don't pay for themselves, mistakes with HUD and FHA, not only not helping, but actually making things worse, and a whole bunch of other things also contributing. We may not be able to change things overnight, but whoever is running the next gov, Presidency and Congress, have a massive job in front of them. They could, either side, make things better or worse with what they do, or we could just ride it out and see what happens. I would just be happy if they don't make things worse.
     
  10. takao macrumors 68040

    takao

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    #10
    it should be left out as well that many recently joined EU countries still have to join the Eurozone and combined those are quite a bit of people which will further influence the euro
     
  11. Rodimus Prime macrumors G4

    Rodimus Prime

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    #11
    one problem with the dollar being the world currency is it is much more difficult to control its value.

    It is both a blessing and a curse being the main currency of the world. It is good because one can always borrow in it own currency. For example a lot of the debt in the EU could easily be in Dollars just because the dollar is the currency of the world. So if the EU crashed then the debt for those countries would sky rocket. Koren had this happen to them. There debt was in dollars and there currency bottom out. (Just using EU as an theoretical example. Truth right now is a mute point) Also another advatage is the dollar will only fall so far because to many countries have interst in it maintain a high value. They have a lot invested in it.

    At the same time a problem with it comes is the US has very little control over how many dollars are out there. I believe the US fiscal policy has control over less than 30% of the dollars out there because the rest are out side of the country.

    The EU if it because the main currency of the world would face the same problems. EU members would have very little control over the value of the EU.
     
  12. DoFoT9 macrumors P6

    DoFoT9

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    #12
    nope look out the aussie buck is on the rise :):)

    your going down.

    i wanna know why laptops are still so expensive if i want to buy one from US though :eek:
     
  13. Unspeaked thread starter macrumors 68020

    Unspeaked

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    #13
    I think most people got my original point, but just to clarify, I'm asking about the dollar specifically here and not the US economy.

    I don't see a threat from the Euro, despite valuation, as long as there are hold out likes Great Britain.

    As an earlier poster said, I think some of the Asian currencies are more of a threat to the dollar...
     
  14. Desertrat macrumors newbie

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    #14
    I've no idea of the time frame, but when people like Warren Buffet and George Soros advise investors to exit their dollar holdings, it's not unwise to do so. IOW, the dollar is going to continue its decline in buying power compared to other currencies.

    That doesn't mean there are no profitable US companies; it just means that your profits from investing in them will buy less than from investing in profitable companies outside the U.S.

    At the moment, the Renmimbi looks like the currency of the future. At the moment...

    'Rat
     
  15. ham_man macrumors 68020

    ham_man

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    #15
    Unless we cure global warming, the US dollar is going down the crapper and never coming back.
     
  16. jb60606 macrumors 6502a

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    #16
    how are the two related? And you can't ever count out the world's greediest capitalist economy...
     
  17. Dont Hurt Me macrumors 603

    Dont Hurt Me

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    #17
    Just look for the manufacturing base, its being removed from the U.S. so what does that tell you about the $ or should I say cents?
     
  18. jb60606 macrumors 6502a

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    #18

    I think a it's more relevant to point out how many european nations are sending manufacturing gigs and other work to the US because of the dip in the dollar. We've been sending jobs overseas for decades. Outsourcing has certainly increased a bit during the economic slowdown; but I'm afraid that - with or without an unstable economy - outsourcing will become the norm or close to it. It's just more profitable.
     

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