u mean u dont get it.....maybe u did not have enough free time
like i do to read all kinds of non-sense stuff like economy, finance etc..
Dollar slide accelerates
- Thread starter Nadi
- Start date
like i do to read all kinds of non-sense stuff like economy, finance etc..I am just trying to say that history repeats itself........because we humans dont want to accept irrational when we see one....
u made the statement....which i have heard many times....that market is suppose keep growing forever......from whatever little i know about economy and stuff.....i dont buy that argument of eternal growth (unless inflation is hand in hand with the growth, which means....its not a growth because its inflated)
techy,
I think you are correct on all the above....
As dollar is a Fiat currency.Fiat currency is simply the printing of a currency out of thin air with no intrinsic value. The confidence is that the country's currency is "valuable" because of the country's economic and military strength.
China keeps large part of the trade surplus in dollars ... and so do most countries... Its' the only currency that can buy oil.. If India wants oil, it needs to pay in dollars and not Rs. All this pegs the value of dollars high. Every one wants this currency and hence it keeps its value ..
Japan, China etc get affected when dollar looses it value as most of there economy depends upon selling goods to US and west. So whever dollar slides in market -- they buy dollars to keeps it from sliding..
Now the equation might change in future -- Euro has a gold backing and so has some intrinsic value of its own... China is planning to diversify its holding .. so they might NOT be holding dollars in such a large sum in future... and then they are some countries who are saying .. you can buy oil in other currencies too..
Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish US by further destroying the value of its dollars.
We never know -- but I guess the dollar slide might continue -- as the housing market is collapsing.
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Jackolantern
Registered Users (C)
The problem is not so much that the US is printing money when they want ... the Fed isn't as freewheeling as that.
The problem is that as a fiat currency, only the underlying strength of the country's economy gives the dollar any remaining value. With the debt levels the US is building up, along with the US hardly making anything of its own anymore but is now simply giving the paper money to poor (cheap labor) countries to do everything for them, means that over time other countries will care less and less about the US dollar. With the US producing less and less that the rest of the world wants, they are making themselves increasingly irrelevant to the rest of the world's economy.
The problem is that as a fiat currency, only the underlying strength of the country's economy gives the dollar any remaining value. With the debt levels the US is building up, along with the US hardly making anything of its own anymore but is now simply giving the paper money to poor (cheap labor) countries to do everything for them, means that over time other countries will care less and less about the US dollar. With the US producing less and less that the rest of the world wants, they are making themselves increasingly irrelevant to the rest of the world's economy.
The key is whether one is doing the work that is earning them the right kind of experience that they can use anywhere in the world.
Right now, $ > 40 INR. But if one were to relocate to Bangalore, the cost of living is perhaps pretty much the same or even more than here in the US for most software people. I have read\heard anecdotal accounts of people complaining being able to save less when they move there.
Eventually as standard of living rises all over India, $ may go down to INR 10. But the purchasing power will most likely be the same.
Right now, $ > 40 INR. But if one were to relocate to Bangalore, the cost of living is perhaps pretty much the same or even more than here in the US for most software people. I have read\heard anecdotal accounts of people complaining being able to save less when they move there.
Eventually as standard of living rises all over India, $ may go down to INR 10. But the purchasing power will most likely be the same.
am i missing some math??
$1=43 , things are cheap i can buy say 1kg or rice.
you are saying that things are getting expensive in india...that means...the same 1kg of rice will be say rs. 60
at the same time dollar loses value... $1=rs.10
now i have to pay $6 for the same 1kg of rice..
can some one please explain......"But the purchasing power will most likely be the same"
infact then it will make sense to save money in india....and move to USA for cheap cost of living...and higher conversion ratio of rs to dollar.
i disagree with your first statement..
since 1960 or so.....usa delinked its currency from gold...that means they can supply as much as anyone wants....
and when they lower the interest rate to 1%....do you know what that means........you can borrow money from usa government for that interest rate.....
and if i am not wrong...there is no limit to how much the banks can borrow......of course you have to show legitimate business reason...
but that way....some one can double their capacity overnight.....without much cost involved.....capital is cheap.....because they can create anytime they want...
of course USD main selling point is petroleum.........and now i can clearly see why they keep going to war in middle east....
the day the oil producing nations switch even half of their trading to other currency.......u can pretty much buy a dollar for Rs. 25 (but who knows even indian economy may take tumble since its dependent on usa....and rupee may get devaluated beyond recognition)
but there are few things which look positive for usa..
1. of course dollar being petrocurrency (as long as they have control on middle east)
2. china and india (and many other countries...including european countries) export a lot to usa....they cant afford dollar losing value against their currency......they will keep supporting dollar for their own sake.
more insight into whats going on : http://www.moneycontrol.com/india/n.../rupeehits9yrhig/market/stocks/article/276607
Thanks.
GCVaruma.
Thanks.
GCVaruma.
you should not try to time any market....because in the short run its impossible to predict..
but if it makes you feel better....in the long run...you may be better off by sending money now (maybe the dollar will fall more in the next few months....nobody knows for sure...but thats where the indicators are pointing to)
i am just being curious about your land purchase...
can you share some more detail like:
which city???...how much per SQ/ft??.........is it for a primary residence or just an investment property?? ......thanks.
Take the loan from a bank in India to fund the purchase ... payback in big lump whenever the exchange rate gets better
what if the exchange rate gets worse than now??.....which is as per market indicators. (the money already in his hand will be much less than what he borrowed....plus loan fees....plus high interest rates)Take the loan from a bank in India to fund the purchase ... payback in big lump whenever the exchange rate gets better
my gut feeling is that Rupee will not be allowed (RBI intervention) to appreciate much since india's exports will be badly hurt....(its already hurting very bad)
same with china...
Yes .. U are right .. if the exchange rates get Bad ... then taking a loan is not a good idea.
On the other hand .. if you take a loan from bank .. they will safeguard the property .. incase someone does a land grab sort of thing.
Don't you think right now guys from Accenture, Wipro, Infosys etc might be now on phone with Chief Manmohan Guru, to devalue Rupee .. just to keep there profit margin high.
yes thats true....that if we pay cash......and in case that land is grabbed....its a total loss...
but if we take loan....bank is going to lose.....and they will go to court to prosecute (we cannot go to court...because of threat to personal security).
ya...i am not too worried about dollar sliding too low against rupee since it will kill our current booming economy....due to loss of profits from exports..
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-------------------------some more things to ponder--------------
i am assuming that most contracts for imports from china, india etc by usa maybe written in USD....
so if dollar depreciates.......guess what.......USA is not losing anything and india/china will be losing a lot... (in fact USA gains by deflated dollar....because they have to pay less when paying back debt)
it may also be the same with other countries like germany, canada, mexico....though i am not 100% sure..
I WONDER WHY UN is keeping MUM on this topic??
i am assuming that most contracts for imports from china, india etc by usa maybe written in USD....
so if dollar depreciates.......guess what.......USA is not losing anything and india/china will be losing a lot... (in fact USA gains by deflated dollar....because they have to pay less when paying back debt)
it may also be the same with other countries like germany, canada, mexico....though i am not 100% sure..
I WONDER WHY UN is keeping MUM on this topic??
techy2468,
I wouldn't blame UN from keeping quite on your comments. You have so much time in your small bama town that you can float all your shit and notions about the economy and the world etc etc.... You have to comment on every damn topic, don't you!
I try and come to see any useful developments on immigration and all I see is your stupid rant all over the place....
I guess there is no one in bama to discuss this with you but that does not mean that you puke your galls out on this forum....
I wouldn't blame UN from keeping quite on your comments. You have so much time in your small bama town that you can float all your shit and notions about the economy and the world etc etc.... You have to comment on every damn topic, don't you!
I try and come to see any useful developments on immigration and all I see is your stupid rant all over the place....
I guess there is no one in bama to discuss this with you but that does not mean that you puke your galls out on this forum....
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Seems you have a serious beef against techy2468. Although I don't completely agree with his analysis but I do find this discussion a refreshing change from the stale topic of retrogression.
NYC .....having a bad day?? poor you... (or maybe its beyond your league....and u cant make head and tail....and all confused....you just spill venom......again...poor you...)
BTW what kind of useful development are you expecting??....maybe you are dreaming that the bill will pass next month.....u will file 485....and get GC in 6 months.....
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Jackolantern
Registered Users (C)
But if the dollar slides, India and China will start demanding more USD for their goods and services (not on existing contracts but on new ones), so in the long run the US will hurt.
Yes. This will happen. But US will not hurt as they will find other countries where they can get the services cheaper. All that is working for China and India today is the cheap supply of labor. If labor starts becoming expensive, services will start getting outsourced to other countries. It is true that manufacturing can not be suddenly shifted due to the enormous capital investment it requires, but this will happen.
In the next few years, pressure will build on china to delink its currency from USD. If China does indeed do that, India will benefit hugely by keeping the currency mostly tagged to USD. Then pressure will build on India and some other country will benefit.
So what kind of jobs will remain in the US? Service industry jobs that can't be outsourced will obviously stay here. Higher paying managerial jobs will be created in more and more numbers. Further, newer industries will be created here and jobs from such industries. Net job creation is a must for the US consumers to keep consuming.
Trade deficit is not the cause of concern; but budgetary deficit is and it is most likely to get worse with SS & medicare liabilities.
In the next few years, pressure will build on china to delink its currency from USD. If China does indeed do that, India will benefit hugely by keeping the currency mostly tagged to USD. Then pressure will build on India and some other country will benefit.
So what kind of jobs will remain in the US? Service industry jobs that can't be outsourced will obviously stay here. Higher paying managerial jobs will be created in more and more numbers. Further, newer industries will be created here and jobs from such industries. Net job creation is a must for the US consumers to keep consuming.
Trade deficit is not the cause of concern; but budgetary deficit is and it is most likely to get worse with SS & medicare liabilities.