| How long will US dollar's decline last? | |
|---|---|
| Mar 11, 2008 04:49 |   |
 | After five consecutive interest cuts, US's interest rates has gone down to 3 percent from 5.25 percent. Following interest rates decrease, dollar has also been depreciating very fast. Dollar's exchange rate against Euro hit a new low. Impacted by this trend, the oil prices has been increasing quickly, breaking 100 dollars per bucket. Some analysts estimate that US Fed might cut the interest rate by 0.5 percent or 0.75 percent on March 18th. It seems that US Fed will keep decreasing the interest rates to stimulate its economy by sacrificing dollar. Perhaps, dollar depreciation can benefit US. However, they should think of other nations in the world. Dollar depreciation might trigger inflation. The president of the Euro central bank says that they will maintain the current interest rates at 4 percent to prevent inflation. In your opinion, how long will US dollar depreciation last? |
| Mar 11, 2008 11:00 | #1 |
| Not big deal Jimmy, as I read in many threads in this site many people was very happy about the fallen dollar. Remember, the demise of America is the demise of many others around the world. I can tell you for a fact, any economic pain in America, will translate to a painful disease around the world. |
| Mar 11, 2008 19:54 | #2 |
| "I can tell you for a fact, any economic pain in America, will translate to a painful disease around the world." Exactly, JC. And that is why I posed this question here. If dollar depreciation lasts for a very long time, the world economies will go to their downturn too. As I said, EU has felt the pressure and they decided to maintain the interest rates. It is said that EU had intended to cut its interest rates. However, Euro enjoys a high exchange rate against dollar. If they cut the interest rates as US did, inflation might be caused. Therefore, I hope that dollar can recover as soon as possible. |
| Mar 14, 2008 02:53 | #3 |
| "Perhaps, dollar depreciation can benefit US. However, they should think of other nations in the world" - Jimmy, have you not realised that America doesn't care at all about anyone else other than themselves? I hope other countries don't get dragged down by America's total irresponsibility, but I have no sympathy at all for this greedy and disillusioned nation. |
| Mar 14, 2008 20:42 | #4 |
| Currency deprecation and the lowering of domestic interest rates(i.e. domestic inflation) creates a lowering of the standard of living for the average individual. Wages tend to lag ( a given) the inflated currency. The only time an individual will benefit from inflation is when items are purchased on a contract at a set price (house) and the interest rate can be negiotated down to reflect the lowering of interest rates. This is fine as long as the individual remains in the house and can afford the inflated taxes and utilities. The scenario or excuse that a depreciated currency will make exports of that country cheaper might be true, but the wage earners suffer for it one way or another. . |
| Mar 14, 2008 20:55 | #5 |
| To answer your original question JIMMYB, I think the depreciation will continue until the US population wakes up and stops using credit cards to sustain a living standard and start weeding out those culprits that are creating this mess. Because you know what this country likes to do when economic issues get messy and the populace becomes restless. |
| Mar 17, 2008 21:30 | #6 |
| "Jimmy, have you not realised that America doesn't care at all about anyone else other than themselves? I hope other countries don't get dragged down by America's total irresponsibility, but I have no sympathy at all for this greedy and disillusioned nation." Baron, I agree with you that America is irresponsible on some international issues. However, she is still No.1 in the world and has tremendous influence over the world economies though she has been in trouble in recent days. On the otherhand, the globalization has connected the world economies together. If the leading one is in trouble, other followers must be affected too. "To answer your original question JIMMYB, I think the depreciation will continue until the US population wakes up and stops using credit cards to sustain a living standard and start weeding out those culprits that are creating this mess." Gary, it seems that you hate overconsuming behaviours. I guess that you seldom overconsume, right? Unfortunately, more and more Chinese people have learned to overconsume. The credit card has become very popular in China. Perhaps, they have learned this from America. I am wondering if you have heard of the following story. An old Chinese woman meets an American old lady in the paradise and look back their whole lives together. The Amercian old lady says:" I have been working hard in last 30 years. Now I have paid off all my housing mortgage loan." The old Chines woman says:" I have been workding hard in 30 years and now I have money to buy a house." This is a huge difference between American and Chinese ways of spending. The American old lady has lived in her house for 30 years though she has working hard to pay off her debt. However, the old Chinese woman has spent her whole life to buy a house. Finally, she can afford to buy it. Unluckily, she goes to the paradise and didn't live in her house a day. What do you think of it, Gary? |
| Mar 18, 2008 09:42 | #7 |
| I will admit that having mortgages, short term loans, and credit cards available to provide instant gratification to the consumers is wonderful but they must be used with caution. The question could be asked, which is worse, to have all the material goods and then be harassed by the creditors later or to not have any modern conveniences at all if they were to be paid only with cash. China is a huge market and no doubt the population will be pressured thru mailings and tv to use credit cards (a wolf dressed in a sheep's clothing) as the credit card companies always change their terms of interest rate and the late fee penalties are horrendous. |
| Mar 18, 2008 11:39 | #8 |
| Another trap with credit cards is the legalize of the contract: I. The print is so small a magnifing glass has to be used to read it(disadantage to the older generation). 2. There are so many "if" "ands" and "buts" in the contract that probably 10 lawyers couldn't agree and to what it actually said. |
| Mar 18, 2008 12:37 | #9 |
| why bother reading credit card policy terms. Current experienced debtors with record of bankruptcy, in order to keep credit rating from going down, ripped up credit cards and turn to their friends and relatives for short-term loans and pay it off on pay day. Generally speaking, oriental habitual way is calc. before consumption, while western way is consumption before calc. |
| Mar 19, 2008 21:08 | #10 |
| Quote:"Generally speaking, oriental habitual way is calc. before consumption, while western way is consumption before calc." Marrie, which way do you prefer? How do you view these two different ways of consuming? My friends around me just do what you said, borrowing money from others to pay off on pay day in order to keep their credit rates. For me, I haven't applied a credit card because it is useless. |
Page 1 of 2 < Previous Next > Page:
Post a Reply to: How long will US dollar's decline last?
Copyright © 1998-2024 All rights reserved.