Will the dollar collapse?

The dollar dropped by a good bit against the Euro last year. I know that because I was in Paris in November when the Euro hit a high against the dollar ($1.31 dollar = 1 Euro) and the Euro has become more valuable since then.

 

deciding instead to visit the Ballet...when you still get a bigger bang for the buck

 

And generally, the Canadian economy is in good shape.

The parity is killing Canadian exporters but it's nirvana for consumers---as soon as the wholesalers and retailers get their prices in line.

A loonie around the 85-90 mark is probably the best scenario

 

Since 1945, the Canadian economy has never been better, and that with rightist leadership.

Turns the version of our political center inside out.

A lesson is to be learned here.

 

When things seem to be in the tank, I turn to Greenspan.

http://www.iht.com/articles/ap/2007/10/24/business/EU-FIN-ECO-Italy-US-Greenspan.php

I think the guy's a genius.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aM8c5RLyltiI&refer=news

http://www.msnbc.msn.com/id/21412330/

 

I went to Brazil in August 2003.

Reais for 1 dollar then: 3.03
Reais for 1 dollar today: 1.80

Looks like I won't be going back any time soon.

 

Great take here:

http://www.newyorker.com/talk/financial/2007/10/08/071008ta_talk_surowiecki

Here's the key:

"It’s a hassle to print new menus or product catalogues, or to go back and re-tag every item in the store, and it also confuses and alienates customers. So companies tend not to change prices all that often. They also use futures markets to hedge against currency risk, which reduces the need for price increases. And China has played a huge role. Although the dollar’s value has plummeted against the euro, it has fallen much less against the Chinese yuan; that’s because the Chinese government continually buys dollars to prop up their value and insure that Americans can keep buying Chinese exports, which have been fundamental to China’s economic boom."

I occasionally check out some financial blogs, and the sense is that China will continue to 'buy dollars to prop up their value' for at least the next four years. This is because China is hosting the Olympics in 2008 and then the World's Fair in 2010. After that ...

 

So with the dollar dropping, how much extra does is cost to pinch them?

 

I appreciate the links to those particular articles. I do think Greenspan is very knowledgeable but part of the problem that currently exists is due to his reluctance to keep things in check years ago.

But the US dollar has dropped in relation the yuan renminbi. It is often overlooked but the cost of goods there is not far off from the cost of goods here. Five years ago, I could travel over and buy jackets that are $150 here for $40 there. Now, the prices are the same.

Their government has artificially kept the international value down. It just won’t stay down for as long as people believe it will.

As an aside, I think it is extremely distressing to be reliant upon China to keep our economy afloat. Disagree if you must, but what our government has done over the last 9-years has been extremely counter-productive.

 

That's true, Slap. Many of the ballerinas have sold their underwear. To raise money, was the stated purpose, although there were, undoubtedly, other consequences.

To make it up, they now shower together, with lots of lather. Some of it inside the shower chamber.

 

Dollar Sinks to new low

http://biz.yahoo.com/ap/071026/dollar.html?.v=3

 

On a related note:

Canadian dollar reaches new high:
http://www.bloomberg.com/apps/news?pid=20601082&sid=a9kNyN3cg9Vk&refer=canada