{"No Salim, its like pointing at a moving car and saying that its engine is making the car move."}

Zee,
Even if it's merely rolling down hill on its own with no driver and headed for a reck!

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..even if it is a chalti ka naam gaaDi type gaaDi.

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No Salim, its like pointing at a moving car and saying that its engine is making the car move.

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{"But even without its bombast and even with its current phatey haal, US is still a huge part of the world's economic engine"}

Sadna,
That's like saying the Yankees, despite being in second last place or so in the AL, have more World Series wins under their belts and a substantial threat to win again.

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Post by sadna,

US is still a huge part of the world's economic engine

Let's put it this way. USA alone is half of the rest of the world economy COMBINED! Just California's economy is close to that of entire China, and bigger than Italy and France!

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{"The bulk of the debt is to the Japanese and the Chinese. "}

Zee,
When I owe you a million, I don't sleep at night.
When I owe you a billion, you don't sleep at night.
Whe I owe you a trillion, nobody sleeps at night.

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Yeah. But even without its bombast and even with its current phatey haal, US is still a huge part of the world's economic engine

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sadna,

The bulk of the debt is to the Japanese and the Chinese. The Japanese are in US control, the Chinese aren't. Economics is nothing without politics. This is why the Dollar went down. No other reason.

When the US Federal Reserve decides it is time for Dollar to go UP, it will.

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Do you realise this is just pork by another name- when will it be discussed as such in the US mainstream media.

I can't believe that Umrikans are held in such thrall by their 'gung ho we're the noblest bestest can do no wrong' ideology that they can't even discuss their own humongous indebtedness openly

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... re the interst rates and currencies, it all depends on what a mrket focuses on. Sometimes it is nominal interest differentials, sometimes real interest rate differentials, sometimes current-account differentials, sometimes other fundamental differentials. Sometimes purely techinical reasons.

It keeps changing. You may wonder why Japanese Yen became strong when their interest is close to zero.

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Zee,
That's another issue altogether. The lower dollar makes European exports more expensive to US and US exports cheaper to Europe. That's why the $ is rising. Also, anytime there is fear of world security, rich people find safety in $ and $S goes up.

Chinese money is going up because all the Pakis are stashing their black money in China.

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Salim,

Can you explain why Dollar was 1.60+ a week ago and touched 1.52 today? Everything else remains the same no?

But look at the Chinese Yuan. It is higher than the Hong Kong Dollar - their own country's other currency, hurting both's exports.

Also, see the Europeans joint comment in FT today. It's the biggest news in the currency markets. They've said they don't want to see a lower Dollar! Because it hurts them but not the Americans!

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{"Iraq war has nothing to do with decline of the dollar. It has EVERYTHING to do with the Chinese current account surplus with USA. "}

Zee,
The dollar was high during the summer of 2001, even a few months before 9/11 and then again in spring of 2002, a few months AFTER 9/11. Iraq war started in 2003. Dollar has been weak since 2003 and has been steadily, and more recently, rapidly falling. The Chinese surplus is a symptom NOT the cause of the decline.

When the interest rates are lowered deliberately, what do you think happens to the dollar? It gets stronger? (" />

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Post by Salim_Chauhan,

This war is responsible for the rapid decline of the dollar,

Now you're totally wrong here. Iraq war has nothing to do with decline of the dollar. It has EVERYTHING to do with the Chinese current account surplus with USA.

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Post by Salim_Chauhan,

Haha yes. I hoped no one would catch that error but you did

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Stuka, Zeemax, MNI,
Sadna's concern is right on the mark. This war is responsible for the rapid decline of the dollar, the loss in American prestige, and the lack of rspect for our might throughout the world. The way this administration and its allies have looted the American taxpayer is something that will be the subject of future books and movies. The carpetbaggers and profiteers from the Civil War will appear to be Patrick Henry's in comparison to the Halliburtons.

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