The dollar's decline: from symbol of hegemony to shunned currency

[cal04]

By Andy McSmith
http://news.independent.co.uk/world/americas/article3169638.ece

The decline of the dollar, symbol of US global hegemony for the best part of a century, may have become so entrenched that some experts now fear it is irreversible.

After months of huge and sustained turmoil on the money markets, lack of confidence in the world's totemic currency has become so widespread that an increasing number of international traders are transferring their wealth to stronger currencies such as the euro, which recently hit its highest level against the dollar.

"An American businessman over here who is given the choice would take anything but the dollar," David Buik of Cantor Index said yesterday. "I would want to be paid in yen, and if not yen then the euro or sterling."

(snip)
Professor Riordan Roett, of Johns Hopkins University in Baltimore, told Bloomberg News: "There is a loss of confidence in the dollar and the US. It may only reflect the widespread dismay with the Bush administration, but it is obvious that the next administration, of either party, will have a steep uphill struggle." As well as reaching its lowest level against the euro, which has been trading at more than $1.47, the dollar has also fallen to its lowest level against the Canadian dollar since 1950, sterling since 1981, and the Swiss franc since 1995.

[pretzel4gore]

1. connect these dots:

1) the repuke party sent into wilderness with dick nixon, it regains power under reagan, who begins tranforming USA from creditor nation to debtor nation (reagan increase US nat debt from $1 trillion at end of carter to $2.6 trillion 8 years later) 2) after 4 years of old bush, the US elects bill clinton twice, annoying the rightwing mightily, even though clinton is a good repub type president...under reagan, liberalism was made into the new communism by endless media foci on nudgewink ops like the clarence thomas/anita hill hearings, incidentals like oj simpson and racist tv shows like 'cops' etc, 3) clinton impeachment follows whitewater investigation lasting years, 4) rush limbah become the voice o america- meanwhile arab terrorism carries on like it had since early 70's, but invigorated mightily by western funding in ending USSR occupation of Afghanistan 5) Al Gore and the dems demonised relentlessly in leadup to 2k election- Gore wins election but nudgewink supreme court makes junyer bush prez at end of 2000 6) NORC results to be published in sept 01, showing bush lost2k election 7) 911 postpones NORC results publication until Nov10/01 which is morning flight 587 blew up killing near 300 people- thus NORC results are foxnews'ed real good 8) bush attacks Afghanistan 9) bush attacks Iraq illegally 10) Plunge Protection Team spends godknows how much keeping up stock markets while bush in office 11) mass media lies so much no one believes it any more 12) US dollar goes into deep decline 12) criminals run all 3 branches US government, plus the mass media 13) Barry Bonds indicted for being black

[dbt]

2. If individual posts could make the Greatest Page,

this one should be up there nine times! BRILLIANT.

[0007]

4. dbt check this article out. Of course it was written in 2003

In the biggest day of protest the world has yet seen against a war in Iraq, from Washington to Tokyo, Liverpool to Damascus, hundreds of thousands of demonstrators across four continents took to the streets yesterday.

The US was the scene of the biggest anti-war demonstration of George Bush's presidency, with tens of thousands of people braving freezing weather to join protests in Washington, San Francisco and other cities, despite the near-unanimous support for war on Capitol Hill and in the US media.

There was also a series of smaller anti-war demonstration in Great Britain, including a two-hour protest outside the Permanent Joint Headquarters of the British Armed Forces in Northwood, north London. There were anti-war rallies or vigils in Bradford, Bristol, Hereford, Liverpool and Glasgow.

There were similar demonstrations across France and Germany, in Russia, Ireland, New Zealand, Japan, Pakistan and in the Middle East. One of the largest was in the Syrian capital, Damascus.

The protests were made against the background of a continuous build-up of troops in the Gulf, and renewed political pressure on the Iraqi government to surrender any weapons of mass destruction.

General Richard Myers, chairman of the US Military Joint Chiefs of Staff, said in Rome that the build-up to war was totally reversible.

The key to that is the Iraqi regime itself, he added. They hold the keys to whether or not there's going to be conflict.

This was reinforced by a warning from United Nations weapons inspectors that they expected more co-operation from the Iraqi government.

Click here for more....

[Joanne98]

3. Jimmy Rogers, the commodity trader, is selling all his assets and buying the Yuan.

Jim Rogers Shifts Assets Out of Dollar to Buy Yuan (Update1)

By Marcel van de Hoef and Danielle Rossingh

Oct. 24 (Bloomberg) -- Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency.

``I'm in the process of -- I hope in the next few months -- getting all of my assets out of U.S. dollars,'' said Rogers, 65, who correctly predicted the commodities rally in 1999. ``I'm that pessimistic about what's happening in the U.S.''

Rogers, delivering a presentation late yesterday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.

The dollar has dropped against all the 16 most actively traded currencies except the Mexican peso this year as slowing growth and the first interest-rate reduction since 2003 last month dimmed the allure of dollar-denominated assets.

Since the Fed lowered U.S. interest rates on Sept. 18, the first cut in four years, the dollar has fallen 2.8 percent against the euro and touched a record low yesterday. Gold rose to a 27-year high and platinum jumped to a record.

``It's the official policy of the central bank and the U.S. to debase the currency,'' said Rogers, a former partner of George Soros.

Reserve Currency

``The U.S. dollar is and has been the world's reserve currency, the world's medium of exchange,'' he said. ``That's in the process of changing. The pound sterling, which used to be the world's reserve currency, lost 80 percent of its value, top to bottom, as it went through the whole period of losing its status as the world's reserve currency.''

The Chinese currency, known as the renminbi, or yuan, is ``the best currency to buy right now,'' Rogers said. ``I don't see how one can really lose on the renminbi in the next decade or so. It's gotta go. It's gotta triple. It's gotta quadruple.''

The yuan strengthened past 7.5 to the dollar today for the first since the central bank ended a fixed exchange rate in July 2005. The currency has gained 10.5 percent since the dollar link was abandoned.

China, growing faster than any other major economy, is ``going to be the most important country in the 21st century,'' he said. China's gross domestic product expanded 11.9 percent in the second quarter, and analysts surveyed by Bloomberg estimate the economy grew by 11.5 percent in the three months to Sept. 30.

Rogers also is buying Swiss francs and Japanese yen, which he said have been ``pounded down'' because of the so-called carry trades.

Unwinding Carry Trades

In the carry trade, investors borrow in countries with low interest rates, such as Japan, and invest the proceeds where rates are higher. Japan's benchmark overnight lending rate is 0.5 percent, compared with 6.5 percent in Australia and 8.25 percent in New Zealand.

The carry trades in yen and francs will ``unwind someday,'' which will send the currencies ``straight up,'' Rogers said. ``I'm buying the yen.''

The bull markets in bonds and stocks are ``over,'' he said. ``Bonds will be a terrible place to be for many years and will in fact be going down for many years.''

Rogers said he remains bullish on commodities because ``that's where the big fortunes are going to be made in the world in the next five, or 10 or 15 years. The current bull market is going to last until sometime between 2014 and 2022.''

Commodity Prices

Commodity prices have surged as demand for raw materials, especially from China, rose faster than producers were able to increase output. Agricultural prices have led recent gains, including a record high for wheat last month and a three-year high in soybeans.

``The number of hectares devoted to wheat farming has been declining for 30 years, the inventory levels of food are at the lowest level since 1972,'' Rogers said. ``Suppose we start having droughts again. God knows how high the price of agriculture is going to go, so that's where I'm putting more of my money now than in other things.''

He added, ``I think I'm going to make more money in agriculture than I make in precious metals.''

Platinum, gold, silver and palladium will ``be much, much higher during the course of the bull market,'' he said.

To contact the reporters on this story: Marcel van de Hoef in Amsterdam at [e-mail] ; Danielle Rossingh in London at [e-mail] .

Last Updated: October 24, 2007 00:48 EDT
http://www.bloomberg.com/apps/news?pid=20601087&sid=amQBwDBSDvBE&refer=worldwide

When China lets it's currency float he'll make a fortune!

[femrap]

5. This is a great thread....K and R

I have a question. How would a person who has NO debt (thankfully) and has worked hard to save some money (all in CDs...no stocks, nor bonds) protect these hard-earned dollars?

In other words, where can one get good information on investing in commodities and getting out of dollars and into the yen, Swiss franc, etc?

Any and all information and advice would be appreciated.

[Ghost Dog]

7. Why is this not as easy in the US as it is in the EU

(international currency investments, I mean, and access to foreign banks)?

What difference should it make to the taxes you eventually declare and pay in your local jurisdiction?

[suegeo]

8. Everbank.com

At Everbank, you can buy different currencies for as little as $2500 per currency. If you put in 20K, you can get into a CD fund that mixes currencies (like a blend of Euro, Franc, and Sterling?) and then you earn interest in the foreign currency.

You can also buy the CHinese currency, yen, etc. Their website is pretty good and will tell you the different stuff you can buy.

Some big cheese at Everbank puts out a newletter daily (the daily pfennig?) and discusses getting out of dollars and into other currencies. You can subscribe to the newsletter and get it emailed to you. I think it is also available online.

I bought Euros awhile back So now with my statement, I get a printed newsletter that can be pretty informative.

There are probably other ways to get into currencies, and I am not cheerleading Everbank. But theyseem okay to me. I am not into high finance tho. Your mileage may vary.

[pretzel4gore]

9. mass starvation within weeks

good luck, etc, but remember we're truly stuck in this rut together, and it's only as a unity we're gonna get out. The old nudgewink conman rule has to end- otherwise the mess gets so awful(!) even a fairly drab imagination can conjure up some idea of the horror that must result...and the nazipoohs 'fighting it out' based upon class lines/their police cohersive powers and trying to use them military police forces to keep control (mass starvation would be just one trick they could use to panic the population into obeying their dictates) however, keeping the economy running while society devolves into terrified huge armed gangs struggling under martial law emergency just cannot work. mr pig is entering a mindless vortex of chaos that will eventually kill him, for good, if he tries to fight it out...if that's any compensation to those of us who hate these filthy bastards (if anyone thinks the human race, facing certain doom, can't or won't tear the powerful ruling elites who caused the mess, to shreds, will find they're wrong, and the proof will be final)
You must use every ounce of your power to demand that the pigs (and believe me, they, mr pig, know it- which is really only logic explanation for the 'liberal' democrat establishment's paralysis ie they are scared of triggering revolution, mass bloodshed etc) are removed from office, and the law forcefully restored, asap, and criminal activity in misleading the people, scaring the young, upsetting the hard working, harassing the overburdened, must stop! the media has to start reporting truth!
The dinasaur ruled all he could see, being a big tough dude, but he only had a pea brain, a tiny little thing bouncing around inside the big empty head... Can you see any parallels with Georgebushamerika?

[Ghost Dog]

6. Dup, see here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3069161