[HUG ] Re: The falling dollar/ photos vs digipics

I was under the impression that oil being sold in US dollars put an upward
pressure on the US dollar not a downward one. Other countries have to buy US
dollars to buy the oil. If oil prices were set in Euros the Euro would rise
as more would need to be bought on the international market and the US
dollar would fall, at least that is the theory I have read. 

In the last five years or so our dollar has risen over 50% to the US dollar
and it has as much to do with the slumping value of the American dollar as
to the real value (whatever that means) of the Canadian dollar. But
international investors see value in the Canadian dollar and buy it and it
goes up in price just like a stock. Now the reasons that investors like one
currency and not another is more than I understand.

-----Original Message-----
From: hasselblad-bounce@xxxxxxxxxxxxx
[mailto:hasselblad-bounce@xxxxxxxxxxxxx] On Behalf Of Marc James Small
Sent: May-06-08 12:37 AM
To: hasselblad@xxxxxxxxxxxxx
Subject: [HUG ] Re: The falling dollar/ photos vs digipics

At 02:21 AM 5/6/2008, JAMES WILLIAMS wrote:
>The sagging of the US dollar is more political 
>than economical, the US government likes our 
>dollar worth less because then other countries 
>will buy our goods. They are more concerned with 
>making companies more money( you know the 
>trickle down effect, lol). Hope I did not push 
>anyones buttons, but sometime the truth hurts 
>lol. But the real question is what is the truth? lol


That is hardly "truth":  it is wild lunacy.  The 
US government does not control the value of the 
dollar in international trade;  that is set by the free market.

The dollar has recently fallen for a number of 
reasons.  One primary cause is the insistence of 
the oil market to continue to peg the price of 
crude oil in US dollars:  as the Chinese demand 
for oil has gone up, this has pressured the 
dollar to decline in value relative to the 
Chinese Yuan and, then, to the British Pound and 
to the Euro.  There are other causes, but they 
are of a like nature.  The feeding frenzy of our 
government (Republican and Democrat Parties 
alike) has not helped, nor have the costs of the Wars in South-East Asia.

In the short run, the cheap dollar will benefit 
the US.  Our goods will cost less overseas and we 
will have to pay more for imports.  That will 
help to adjust the balance of trade problem we 
have had since the days of Lyndon Johnson.  In 
the long run, the dollar will rebound.  I hope 
that this will not be for some years but most 
economists figure that it will happen within 24 
months.  In the end, though, the dollar will be 
up and gas and food prices will fall.

I am 58 and have been through cycles like this 
before and will do so again if I live long 
enough.  Truly, there is nothing new under the 
Sun:  the British were horrified by a similar 
situation in the 1790's, though they did not then 
have to deal with petroleum imports!

Marc



msmall@xxxxxxxxxxxx
Cha robh bàs fir gun ghràs fir!


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