is the US dollar a sinking ship?
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| Well, is it? |
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75% |
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| Total Votes : 12 |
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RexRacer
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 Posted: 02/08/05 - 20:52 Post subject:
Russia is pulling out its sole dependence on the dollar as a benchmark. Not too good.
Russia to oust US dollar from nation's financial policy
02/07/2005 15:58
The majority of Russian people were saving their money in dollars during post-perestroika years
The Central Bank of Russia has recently announced that the official ruble rate will be calculated on the base of the dollar and euro cost. A spokesman for the Central Bank said that the dollar-oriented approach to the Russian currency policy is outdated. "Guaranteeing stability to the dollar rate against the ruble was leading to considerable fluctuation of the ruble and other foreign currencies, including the euro," a statement from the bank ran. It is noteworthy that the European currency has obtained stable positions both in the Russian and in the world economy.
The Central Bank introduced the bi-currency approach to the financial policy: from now on it will be oriented on the cost of the standard value equal to $0.9 + 0.1. The ruble rate will stabilize against the euro a little, whereas it will still fluctuate against the dollar. When market members become accustomed to the novelty, the euro share will be growing according to objects and needs of the state.
The majority of Russian people were saving their money in dollars during post-perestroika years. Needless to say that the dollar has not been doing at its best lately. Slowly but surely, the US currency has been losing value after the crisis of 1998 - presumably because of high oil prices. According to experts' estimates, the trend will be preserved in 2005, if the USA does not take measures to cut budget deficit. The euro, however, continues breaking all records, although analysts did not lay much hopes on the European currency before.
It is not ruled out that the reform will exert a positive influence on the Russian economy. The bi-currency approach will be capable of regulating the financial market with the help of interest rates (as it is practiced in all civilized countries) and use currency interventions at a lower capacity. Common Russian citizens are not likely to enjoy considerable changes for the better, though. If the Central Bank of Russia continues backing the weak dollar, everything will be left as it is.
Read the original in Russian: (Translated by: Dmitry Sudakov)
Pravda.Ru
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copteacher
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Posted: 02/09/05 - 09:04 Post subject:
economics is cyclical. The Euro can't be bullish forever only because the Euro Economy is highly regulated and tax with little profit motive.
Just like people moving money to different banks when rates change, it is a microcosm of the world's economy.
As long as the US still consumes like it does people will want to deal with us.
It is not like the dollar has not declined before. Goodness.
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TOsteve
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Posted: 02/09/05 - 09:31 Post subject:
| rtpd113 wrote: | economics is cyclical. The Euro can't be bullish forever only because the Euro Economy is highly regulated and tax with little profit motive.
Just like people moving money to different banks when rates change, it is a microcosm of the world's economy.
As long as the US still consumes like it does people will want to deal with us.
It is not like the dollar has not declined before. Goodness. |
Has such a decline in the US dollar ever been coupled with the emergence of such a viable competitor on the world currency markets? I think this is what has people raising eyebrows.
I don't have enough facts to have any answers on this, but my gut tells me that we might be witnessing the beginning of a paradigm shift when it comes to the global marketplace. Any ideas out there?
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RexRacer
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Posted: 02/09/05 - 13:48 Post subject:
I think that timimg is indeed everything in this case, Steve. Of course Joe's right that there have been serious fluctuations in the past, but never before has there been a world currency that could compete with the US Dollar as the Euro can.
The problem is that our massive debt is funded, and less painful to us in the States as a whole, becuase of large amounts of US bonds and currency held in reserve by other nations.
When any nation, major, as in the case of Russia, or not, chooses to unload dollars in favor of anything else (Euros, Yuan, whatever) it begins to put severe pressure on our fiscal system. It's like a good ol' fashioned bank run--when the other nations want their money back, and choose to invest it elsewhere, the results could be very nasty, indeed.
And this doesn't even address the whole Petrodollar vs Petroeuro issue that's been covered here elsewhere.
My mother-in-law is a very smart lady and an actuary in NYC. Her actuary, futurist buddies, all brilliant and far-seeing in these matters themselves, think there's a very real chance that the US will experience a financial meltdown on par with Argentina in the next 15-30 years--perhaps even more of a probability than not. And that's some scary food for thought.
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thegman
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Posted: 05/05/06 - 13:40 Post subject:
| thegman wrote: | | RexRacer wrote: | | The worst will come when countries stop holding dollars in reserve. It keeps us afloat. Today's paper noted that Russia was already moving some of it's reserves out of Dollars and into Euros. |
Russia? Consider what would happen if Asia starts moving.
| RexRacer wrote: | | And when the world stops trading oil in petrodollars? We're economic toast. |
How about this nifty scenario?
The Islamic Gold Dinar is being minted again. They're available in the United Arab Emirates and the Dubai Islamic Bank. The coin is 4.25 grams of 22 carat gold.
How much of a shift in world monetary power would there be if Muslim countries insisted on being paid for their oil with only these dinars? The sudden demand would increase the price of gold, and so they would make money as their money went up in price! And with every new barrel sold, they would increase the demand for gold, which would drive up the price of their dinars some more!
Get your gold while the gettin's still good.  |
Euros would be almost as catastrophic... http://news.yahoo.com/s/ap/20060505/ap_on_bi_ge/iran_oil_euros
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.jrjo
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Posted: 05/05/06 - 14:30 Post subject:
You've been stewing on it for awhile, eh Gman?? 
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thegman
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Posted: 05/05/06 - 15:39 Post subject:
| .jrjo wrote: | | You've been stewing on it for awhile, eh Gman?? |
Yep. I think about it every day.
I was buying as much gold as I could afford 3 years ago, and I should have started 2 years sooner than that. I wish now that I'd bought silver too.
Everyone here would be wise to think about what they'll do when the dollar collapses.
Note my use of "when" rather than "if".
Don't worry too much though. Gold's still a bargain relative to the price of oil. There's still time to get in.
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.jrjo
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Posted: 05/05/06 - 15:48 Post subject:
| thegman wrote: |
Everyone here would be wise to think about what they'll do when the dollar collapses.
Note my use of "when" rather than "if".
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What's your ball-park timeline guesstimation? ..months?..years?... weeks? 
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thegman
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Posted: 05/05/06 - 17:13 Post subject:
| .jrjo wrote: | | thegman wrote: |
Everyone here would be wise to think about what they'll do when the dollar collapses.
Note my use of "when" rather than "if".
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What's your ball-park timeline guesstimation? ..months?..years?... weeks? |
If I thought I could guess with any accuracy, I'd become very wealthy indeed. Several years at the outside would be my best guess.
Of course, an oil crisis could really speed things up. The higher gold goes, the worse off the dollar is.
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