Sinking Currency, Sinking Country - Page 2 - Mercedes-Benz Forum

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post #11 of 132 (permalink) Old 11-05-2007, 12:13 PM Thread Starter
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Originally Posted by Jakarta Expat View Post
In the States Diffy, you are truly in the minority........buy Euro, Sing dollar and Swiss Krone and some gold and silver

As for mud hut, that is why I only post pics of the garage where I keep our cars, the rest is mud, high quality mud but mud none the less, you certainly called that 1 right.......
1 Swiss franc = 0.865951 U.S. dollars
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post #12 of 132 (permalink) Old 11-05-2007, 12:25 PM
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This Swiss Frank will be hearing nothing of that...


Swiss composer, Frank Martin
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post #13 of 132 (permalink) Old 11-05-2007, 02:23 PM
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The cheapest way for the US Government to pay off their debt is to allow the US dollar to deflate so that they pay back the foreign lenders with deflated dollars. Its' either that or the Gov raises taxes on US citizens & corporations.I don't think, coming up to an election, any white house hopeful will win on a "vote for me is a vote for higher taxes" platform.Hence the alternative choice means the dollar will decline further. Because the US dollar is still the International currency-of-trade, the whole world has a vested interest in the US dollar.Therefore any decline should be fairly orderly & controlled (regardless of currency-speculators).Ironically,it is two former "enemies" who now finance the US war efforts; China & Japan. How the world changes! China has in 2007 replaced Canada as the USA largest trade-partner. The US dollar will stay below it's historical-average-value likely until after it's crushing debt has been reduced substantially.More tough medicine in the wings, I'm afraid. Meantime, my wife & I will be going to Chicago for a week's holiday to shop,eat,enjoy the city & people...and spend our $1.07 C$.
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post #14 of 132 (permalink) Old 11-05-2007, 02:55 PM
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I agree w/ Pat about half the time, but he is being a bit of a Chicken Little on the currency issue. In the global economy, there are so many factors at play that it isn't possible to declare that a weak dollar is either mostly good or mostly bad. The situation is far more complicated than that and not amenable to a good v. bad dichotomy. I read an article in the Trib' recently that captures what I am talking about: It was called "Making sense of weak dollar..." Check it out yourself and see if you don't agree: Making sense of weak dollar -- chicagotribune.com


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post #15 of 132 (permalink) Old 11-05-2007, 03:11 PM
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This is why I told Chill babe to save for her Range Rover , I don't do tick or rent they a shit solution to your needs. Not bragging , I owe nothing! I own my houses, if you take a mortgage pay it off as fast as you can , I own my cars I own everything I have. Living beyond your means is not only bad for you it's bad for others, as the UK banks have found out with the American dream of being a King on a average wage, and the Brit are not much better at handling their money . My Grandmother gave me many things, but this advice I have stuck to it has done me good service ' if you want it SAVE for it, and it will come soon enough'.
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post #16 of 132 (permalink) Old 11-05-2007, 03:53 PM
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Originally Posted by Von Vorschlag View Post
This is why I told Chill babe to save for her Range Rover , I don't do tick or rent they a shit solution to your needs. Not bragging , I owe nothing! I own my houses, if you take a mortgage pay it off as fast as you can , I own my cars I own everything I have. Living beyond your means is not only bad for you it's bad for others, as the UK banks have found out with the American dream of being a King on a average wage, and the Brit are not much better at handling their money . My Grandmother gave me many things, but this advice I have stuck to it has done me good service ' if you want it SAVE for it, and it will come soon enough'.
That's good advice, but the wise use of credit is much smarter under almost all circumstances. That is how real wealth is created!

Don't believe everything you think
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post #17 of 132 (permalink) Old 11-05-2007, 05:50 PM
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^^^^

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
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post #18 of 132 (permalink) Old 11-05-2007, 07:03 PM
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Supermodel Bundchen Joins Hedge Funds Dumping Dollars

Nov. 5 (Bloomberg) -- Gisele Bundchen wants to remain the world's richest model and is insisting that she be paid in almost any currency but the U.S. dollar.

Like billionaire investors Warren Buffett and Bill Gross, the Brazilian supermodel, who Forbes magazine says earns more than anyone in her industry, is at the top of a growing list of rich people who have concluded that the currency can only depreciate because Americans led by President George W. Bush are living beyond their means.

Even after the dollar lost 34 percent since 2001, the biggest investors and most accurate forecasters say it will weaken further as home sales fall and the Federal Reserve cuts interest rates. The dollar plummeted to its lowest ever last week against the euro, Canadian dollar, Chinese yuan and the cheapest in 26 years against the British pound.

``We've told all of our clients that if you only had one idea, one investment, it would be to buy an investment in a non- dollar currency,'' said Gross, the chief investment officer of Pacific Investment Management Co. in Newport Beach, California, and manager of the world's biggest bond fund. ``That should be on top of the list,'' said Gross, whose firm is a unit of Munich- based insurer Allianz SE.

Bundchen's Demands

The dollar fell 0.8 percent last week and touched $1.4528 per euro, the weakest since the euro's debut in 1999. It traded at $1.4476 at 5:47 p.m. in New York. The dollar lost 2.8 percent last week to 93.47 Canadian cents and 1.8 percent to $2.09 per British pound. The Fed's U.S. Trade Weighted Major Currency Index measuring the dollar's performance versus seven currencies, such as Japan's, slid to a record low of 72.22.

BNP Paribas chief currency strategist Hans-Guenter Redeker, the most accurate foreign-exchange forecaster last quarter in a Bloomberg survey, said the dollar may drop to $1.50 per euro by year-end. The median estimate of 42 strategists surveyed by Bloomberg is for the currency to end the year at $1.43. Among those surveyed last week, the forecast ranges from $1.42 to $1.50.

When Bundchen, 27, signed a contract in August to represent Pantene hair products for Cincinnati-based Procter & Gamble Co., she demanded payment in euros, according to Veja, Brazil's biggest weekly magazine. She'll also get euros for the deal she reached last October with Dolce & Gabbana SpA in Milan to promote the Italian designer's new fragrance, The One, Veja reported. Bundchen earned $33 million in the year through June, Forbes reported in July.

`More Attractive'

``Contracts starting now are more attractive in euros because we don't know what will happen to the dollar,'' Patricia Bundchen, the model's twin sister and manager in Brazil, said in a telephone interview in September from Sao Paulo. She declined to discuss details of the arrangements last week.

``Gisele has contracts in dollars,'' said Anne Nelson, Bundchen's agent in New York at IMG Models, in an interview today. ``When she works in Europe she gets paid in euros, when she works in the U.S. she gets paid in dollars, when she works in Brazil she gets paid in reais, and so on and so forth.''

Procter & Gamble's Sao Paulo-based external relations director for Brazil, Andre Quadra, said he couldn't give details of the Pantene contract because of a confidentiality agreement.

Analysts in a Bloomberg survey expect the dollar to strengthen in coming months as stronger-than-forecast reports suggest U.S. consumers will keep the economy out of recession. Payrolls grew by 166,000 in October, double the median forecast of economists in a Bloomberg survey.

U.S. Economy

The dollar will rise to $1.43 per euro this year and $1.35 by the end of 2008, according to the median estimate in the survey.

``So far the data has shown the U.S. economy may not be slowing to the extent the majority of the market had expected,'' said Omer Esiner, an analyst at currency-trading company Ruesch International Inc. in Washington who expects the U.S. currency to strengthen to as much as $1.38 per euro. ``That could temper policy easing down the road and lend support for the dollar.''

Buffett, whom Forbes in April ranked as the world's third- richest person behind Bill Gates and Carlos Slim, told reporters in South Korea last month that he is bearish on the U.S. currency.

``We still are negative on the dollar relative to most major currencies, so we bought stocks in companies that earn their money in other currencies,'' Buffett said Oct. 25. Buffett, 77, is chairman of Omaha, Nebraska-based Berkshire Hathaway Inc.

`Moving to Asia'

Jim Rogers, a former partner of investor George Soros, said last month he's selling his house and all his possessions in the U.S. currency to buy China's yuan.

``The dollar is collapsing,'' Rogers said last week in an interview. ``I'm moving to Asia because moving to Asia now is like moving to New York in 1907 or London in 1807. It's the wave of the future.''

The dollar is falling as investors seek better returns outside the U.S. Developing Asian nations including China and India will grow 9.8 percent this year, compared with 1.9 percent for the U.S., the International Monetary Fund said last month.

China, India and Russia accounted for half the global expansion over the past year, and the euro region will expand 2.5 percent in 2007, outpacing the U.S. for the first time since 2001, the Washington-based IMF estimates.

``The world has learned to live with a weak dollar,'' said Jay Bryson, a former Fed analyst who is now a global economist in Charlotte, North Carolina, at Wachovia Corp., the fourth-largest U.S. bank. ``It's not worried. It doesn't rely on the U.S. as much as it once did.''

Dollar Decline

Bryson forecasts the dollar will weaken to $1.50 per euro by the end of June.

The U.S. currency dropped in the past two months as the Fed cut its target rate for overnight loans between banks twice to keep a decline in home sales from starting a recession. The central bank reduced the rate by three-quarters of a percentage point to 4.5 percent, including a quarter-point last week. The National Association of Realtors trade group in Washington said on Oct. 10 existing home sales may fall 11 percent this year.

Lower rates have made yields on U.S. debt less attractive. U.S. two-year Treasuries yield 0.30 percentage point less than German government bonds of similar maturity. The last time Treasuries yielded less than bunds was 2004.

Economic Cushion

The weaker currency has cushioned the U.S. economy during the worst housing recession in 16 years. Gross domestic product grew at an annual rate of 3.9 percent in the third quarter, the most in more than a year, the Commerce Department said Oct. 31 in Washington.

The five-year, 67 percent drop against the Canadian dollar has made it cheaper for fans from Toronto to drive the 110 miles (177 kilometers) to Orchard Park, New York, to watch the Buffalo Bills play football.

Canadians account for 11 percent of the team's season tickets this year, up from 6.5 percent in 2005, according to Scott Berchtold, the Bills' vice president of communications. At yesterday's annual Canada Day game, where the Bills beat the Cincinnati Bengals, a record 23 percent of the 70,745 fans were from Canada, he estimated.

``When the Canadian dollar was down around 65 cents, we didn't get anybody,'' Ralph Wilson Jr., the team's owner, said in an interview. ``When the dollar fell, we starting getting some people.'' The Canadian dollar bought 61.76 U.S. cents in 2002.

Cheaper Abroad

The dollar's drop also makes American goods cheaper abroad. U.S. exports were a record $138.2 billion in August, government data show. Net exports added 0.93 percentage point to U.S. gross domestic product last quarter, offsetting a 1.05 percentage point drag from housing, government data show.

``As long as the dollar's decline doesn't trigger inflation, it's a good thing, helping the U.S. economy to stay out of recession,'' said Robert Mundell, a professor at Columbia University in New York who won the Nobel Prize for economics in 1999.

The Commerce Department's price index for personal consumption expenditures excluding food and energy rose 1.8 percent in September from a year earlier, the same as in August. The Fed forecasts the index will increase 1.75 percent to 2 percent next year.

Wealthy clients at San Francisco-based Union Bank of California have doubled their deposits in foreign currencies to $60 million the past two months as a hedge against a decline, said Bradley Shairson, head of currency and derivatives at the bank.

Buying Foreign Securities

U.S. investors bought $198 billion in foreign securities this year through August, 72 percent more than in the same period last year, Treasury Department data show.

That's the same strategy as sovereign wealth funds run by the largest exporters and oil producers, including China, Singapore and Qatar, said Stephen Jen, head of currency research at New York-based Morgan Stanley.

The funds may grow to $17.5 trillion by 2017 from $2.5 trillion now and shift more than $500 billion out of the dollar in the next three years in search of better returns, he said.

``We're all thinking about diversifying out of the dollar,'' said Jen, who is based in London. ``It's a very logical thing.''

Bloomberg.com: Worldwide
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post #19 of 132 (permalink) Old 11-05-2007, 09:40 PM
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^^^^

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
I'm sure that was good advise in late 16th century, but it does not apply today... (William Shakespeare, "Hamlet", Act 1 scene 3)

Don't believe everything you think
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post #20 of 132 (permalink) Old 11-05-2007, 10:29 PM
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Originally Posted by torontomichael View Post
The cheapest way for the US Government to pay off their debt is to allow the US dollar to deflate so that they pay back the foreign lenders with deflated dollars. Its' either that or the Gov raises taxes on US citizens & corporations.I don't think, coming up to an election, any white house hopeful will win on a "vote for me is a vote for higher taxes" platform.Hence the alternative choice means the dollar will decline further. Because the US dollar is still the International currency-of-trade, the whole world has a vested interest in the US dollar.Therefore any decline should be fairly orderly & controlled (regardless of currency-speculators).Ironically,it is two former "enemies" who now finance the US war efforts; China & Japan. How the world changes! China has in 2007 replaced Canada as the USA largest trade-partner. The US dollar will stay below it's historical-average-value likely until after it's crushing debt has been reduced substantially.More tough medicine in the wings, I'm afraid. Meantime, my wife & I will be going to Chicago for a week's holiday to shop,eat,enjoy the city & people...and spend our $1.07 C$.
Most countries, excepting some Pacific Rim players have already moved to the Euro as the trading standard, away from the dollar. The time when the world had a vested interest in the dollar is waning thanks to some very poor economic policies that have crippled its reputation and value.

McBear,
Kentucky

Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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