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What you are experiencing is the usual forex management issues and concerns of most international businesses, and the USD being under pressure is nothing new.
Here are two prime examples to consider :
1) The long downward trand of the USD.
In the last four years the USD has dropped from parity with the EURO to the current state where a EURO is worth USD 1.42. I remember negotiating advertising fees in EUROS at 1:1 – boy does that seem like a good decision now !
:tongue:2) The US stock market going up is simply reflecting falling USD values.
I’ve seen many posts on different boards about the great “US stock rally” which is up 25% over the last four months since end of March. But the reality is the the USD has dropped 12% against world currencies in that time, and as much as 25%-30% against strong currencies (CAD, EURO, AUD and NZD) meaning that most of the “gains” are only in terms of being more USD – and for foreign investors it has not not actually an increase in wealth in local currency terms.So you are making a little bit of sense … but …
It really only makes sense if all your players are US citizens.
If they are not US players then their foreign currency deposits will be worth more USD, and you’ll earn more USD, even though each USD will be worth less – so it sort of balances out.The dropping affect on USD will be less than a total dive
The USD will always be worth something substantial over the next 2,3,5 or even 10 years … even if this devaluing trend does continue.and then there is this
American Embassies Urged to Stockpile Local Currencies
A top investment advisor, Harry Schultz – who was MarketWatch’s Peter Brimelow pick for financial newsletter of the Year in 2008 – is now claiming:
Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that ‘something’ is about to happen … within 180 days, but could be 120-150 days.
Investment advisor and former Army Counterintelligence officer Bob Chapman is saying the same thing, reporting on the possibility of a so-called “bank holiday” planned for late August or early September. According to Chapman’s sources, U.S. embassies around the world are selling dollars and stockpiling money from respective countries where they operate.
Leading trend forecaster Gerald Calente has also repeatedly predicted a “bank holiday”.
But the rumors of embassies being advised to stockpile local currency is stunning and – if true – point to a possible huge devaluation in the dollar.
i’m not sure how much of this is true, and whether this is meant to be intentional misinformation, but the future of american dollar is definitely not bright.
Dollar is being destroyed daily.. debt against it insures inflation at record rates devaluing it to a point of becoming a joke. If the fed gets audited like congress wants it will drop like a rock, they predict anywhere from 2 – 4 trillion was printed without being accounted for.. this is a huge issue if creditors become aware.
I would not worry too much. Currencies in developed countries cannot diverge too much, otherwise arbitrages with real assets start to appear. Just to give a silly example and euro doubles from 1.44 to 2.88.
So the European retirees will massively purchase retirement houses and related expenses in dollar denominated locations such as USA, as it is like the price dropped in half. These billion of dollars are new demand, strengthening USD.
Unlike stocks, currencies are somehow bounded as they express relative values.Currencies fluctuate, that’s natural. The moment everyone is concerned is usually near the bottom. Daweller, back on 11/1/2007 the Canadian dollar was worth more than the U.S. Dollar, you got 90 cents Canadian for $1 U.S. dollar. Everybody thought the dollar would continue to spiral out of control just as they all do today, some non-U.S. actress stated that she wouldn’t accept a contract in U.S. dollars because they were devaluating so quickly. On 3/1/2009 you got $1.30 Canadian for $1 U.S. dollar it did a complete reversal. Today you get $1.07 Canadian for $1 U.S. dollar. It’s a long ways from $1.30, but also a long ways from 90 cents Canadian and that all happened in just 2 years.
Just like back in March when the U.S. Stock markets were near their bottom and everyone thought the markets would go nowhere but down. Panic was everywhere, I had to daily remind co-workers that they needed to increase there investments at the bottom, not pull out their investments.
If you think the dollar will continue to dive, invest in gold, oil, silver, copper, and other commodities that are valued in U.S. dollars.
Fearing something you can’t control will put you in an early grave. Learn ways to take advantage of, or take control of the things that make you fearful and you will feel more in control and live a happier life.Splinterfree, the big word in your post is near the last line, “Rumor”. If I believed every rumor I have heard, they have aliens from other worlds in the U.S. and Elvis has been spotted numerous times 20 miles from my house.
I love the US dollar at the moment, Based in NZ its almost double profit on anything we make or win. Its good for some, Bad for others.
@rakebacknow 208135 wrote:
I would not worry too much. Currencies in developed countries cannot diverge too much, otherwise arbitrages with real assets start to appear. Just to give a silly example and euro doubles from 1.44 to 2.88.
So the European retirees will massively purchase retirement houses and related expenses in dollar denominated locations such as USA, as it is like the price dropped in half. These billion of dollars are new demand, strengthening USD.
Unlike stocks, currencies are somehow bounded as they express relative values.You just forgot the magic of inflation……
