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Fixedspiral

When did the US dollar get so weak?

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So, after just recently making my first international purchase, I realized that the dollar has lost a LOT of value. I remember several years ago, the dollar to GBP was around 1:.75, and USD compared to CAD was something like 1:1.25 maybe? And even though the Euro was relatively new, it was still about a 1:1 exchange. Even compared to the yen, it was around 1:130. Having missed this decline in the dollar's strength, I was wondering when this slide took place. Was it the 9/11 incident, or Hurricane Katrina? Perhaps the invasion of Iraq? I realize the economy isn't doing so well, but I was wondering if anyone had any information that is a little more concrete. I know this is probably skirting that no-no line of politics, so lets keep conjecture light; I was just wondering a time-frame/cause of the decline.

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I remember several years ago, the dollar to GBP was around 1:.75, and USD compared to CAD was something like 1:1.25 maybe? And even though the Euro was relatively new, it was still about a 1:1 exchange.

 

Man, I don't know where you've been, but the dollar hasn't been that strong for a LONG LONG time. We haven't been at 1:.75 against the pound since the 80's, and it was brief, even then.

 

dollar_recent.gif

 

Also, we haven't been at par with the Euro in more than 4 years.

 

The major influence in currency valuation in this day in age is not the gold standard (how much gold bullion that is held by a given country, which began to be phased out close to a century ago), but is the rate of import and export of goods and services. Simply speaking, we aren't exporting as much as we used to be, because our products are more expensive and/or are of lower quality than what a country can get from somewhere else.

 

That of course is a dramatically simplified view, but it covers what most people need to know, without going beneath the line.

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Not all that long ago, I remember LdF having a brief "The Dollar Is Crappy Against The Pound And We Know It Sucks" (my words) discount for US customers. I don't think that I have the Email that I got, but I figured that did not bode well for things.

 

For the record, my last absinthe order (and almost all others) was from LdF.

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Yeah, 2001 and 2002 was the best valuation we'd had in close to a decade. And surprisingly (or not so surprisingly depending on your paradigm) it doesn't have a lot to do with politics at all.

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::sigh:: Well, who knows, maybe LdF will run another Let's-Give-The-Americans-a-Break-Because-The-Dollar-Sucks sale soon...

 

*not holding breath*

Edited by Fixedspiral

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If you can remember the '60's (or the 70's for that matter) you were missing something. The US economy is a delusion and the dollar is in the toilet and sinking steadily against the Euro. It sux for those of us who like EU products. Fortunately the best is produced domestically . . .

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I recently ran across a web site, I don't know where but I'll try to find it, that essentially tried to prove the whole "US economy is a delusion" line of thinking. It actually sounded pretty persuasive, looking at the abandonment of the gold standard, the trade deficit, and related factors.

 

If so, we're all in for a rough ride. No wonder they're calling this "China's Century".

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Yeah, 2001 and 2002 was the best valuation we'd had in close to a decade.

 

Yes, too bad the absinthe selection was so limited.

 

Rotten timing.

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"US economy is a delusion"

It's bigger than that. The entire WORLD economy is just numbers on a sheet. With the private equity firms and hedge funds practically running the economy right now, things are worth what THEY say it's worth.

 

Read up on what happened that forced Merrill Lynch to auction off hedge fund assets. It's a scary thing. I also think it's the next target for regulators, like mutual fund market timing a few years ago. Lots of people will go to jail and/or lose jobs.

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Going to London in March of this year was PAINFUL. Just to ride public transportation for the day there cost something like 20 American dollars with the exchange rate.

 

Manchester was much more reasonable but still when people ask me how I liked London I just think about how expensive it was for me.

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As long as we're still on the subject, this is what I was talking about:

 

The Politics of Dollars, Oil

 

and here in greater detail:

 

The Proposed Iranian Oil Bourse

 

and a more recent take here:

 

Howard Lindzon blog

 

Am I nuts to believe in any of this? It seems to make sense though, or maybe I'm just tired of the war.

 

Or maybe this whole thread belongs somewhere else, huh?

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Always keep in mind that the media loves to drive your fear and greed emotions. They're going to take issues like oil, and money, and war and try to make them seem like NEW issues.

 

They aren't new. It's the same ole shit, different flies. There's always going to be an apocolypse du jour: Great depression, inflation, watergate, OPEC, gas lines, middle east wars, bloated corporate cultures, speculative bubbles, embargos, jobless recoveries, etc etc.

 

None of it's new. As I said before SOSDF. It sucks, but it's always gonna be there.

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If you can remember the '60's (or the 70's for that matter) you were missing something.
It's all written in clear light.
The US economy is a delusion and the dollar is in the toilet and sinking steadily against the Euro. It sux for those of us who like EU products.
Yeah? Not for those of us who get paid in euros. :laf: :laf: :laf:
Fortunately the best is produced domestically . . .
You do our European comrades a great disservice with that comment.

 

So, um look fellas, I'd demonstrate right about now why the topic of politics is taboo here, but I'd hate to hurt anyone's feelings and send the godless commies scampering back to the safety of their cronies,* so let's pull up on the reigns a bit. This could easily get ugly. I like some of you and I'd like to keep it that way.

 

kthxbye

 

 

 

 

 

 

*See what I did there? Irony. ;)

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I remember back in the late 70s and 80s we saw doubble digit inflation. I really pittied those fools who got the variable rate home loans in the early 80s at wonderfully low interest rates (6% compared to my 9.75% fixed rate loan), only to see their interest jump to the high teens a few years later.

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Those southern peasants especially!

 

 

We godless commies know that discuss it or not, politics, (not absinthe politics) affects us all on a personal level. The rate of exchange and the buying power of our dough is a vital example.

 

 

 

 

 

 

 

 

 

Also, we don't scurry.

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'Le Gimp' date='Aug 2 2007, 09:58 AM'

I remember back in the late 70s and 80s we saw doubble digit inflation. I really pittied those fools who got the variable rate home loans in the early 80s at wonderfully low interest rates (6% compared to my 9.75% fixed rate loan), only to see their interest jump to the high teens a few years later.

 

One of the pitiful fools.

<----------------

 

It wasn't even a few years but about 1983 when I bailed. We're much better now. Still a bit tender in places but better.

 

Now, I'm embarrassed. :blush:

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politics, (not absinthe politics) affects us all on a personal level. The rate of exchange and the buying power of our dough is a vital example.

True, but looking back at fiscal policy and exchange rates, it seems the battle between dollars and pounds is blind to which party is in office. Whether Democrat or Republican, it hasn't seemed to matter in the past 20 years or so. There were big dips (as well as big spikes) in the pound's value during both Republican and Democratic presidencies, as well as democratic and republican controlled senates.

 

See Hiram, I talked politics, but did so apolitically. :thumbup:

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There are a few different paths one could take.

You could make your own money like Emperor Norton did. You could trade your reserve notes in for a hard currency like this one.

Or you could send lots of beads and handicrafts like the Rainbow Family Gathering.

Or move to a country with a more productive economy.

It does sadden me that the days of traveling overseas and having locals swoon at the sight of my American Dollars and Levis Jeans are over. Where they ever that way? I really don't know, as I have never traveled.

Edited by Poor

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