Adding Reply Archived Topic: It will not be bumped to the top of the forum. Topic Can someone PLEASE explain to me Membername   Not a member? Sign Up Free (takes 20 seconds) Password   Forgotten your password? Post Font: Verdana Arial Black Georgia Comic Sans Impact   Size: Tiny Normal Big Huge   Color: Default Dark Red Red Orange Brown Green Olive Cyan Blue Dark Blue Indigo Black [ Check Spelling ] [ Post Preview ] [ LiveTags ] FAQ Keyword Search: Post Options Favorites Manager Notify me of new replies to this topic by email Notify me of new replies to this topic by private message Original Post Bacon Posted at 4:13 am on Nov. 21, 2008 Why the US dollar is doing so strong in comparison to earlier this year - even though the US is now facing an economical dilemma never before seen since the Great Depression IT MAKES NO SENSE. I want to be able to import games cheaply from the US and you guys have the most annoyingly strong dollar at the moment..

Replies shadowpool Posted at 12:58 am on Nov. 22, 2008 People are flocking to dollars to cover their dollar denominated debts and they're also buying massive numbers of treasury bonds because that appears to be the only thing in the world that won't disappear overnight. Another reason for the dollar rally is the high LIBOR rate which is a measure of interbank lending risk. European banks need USD capital to pay for their bad US mortgage bonds. Usually they use the LIBOR for such things, and borrow from other banks, but since the LIBOR is so high and represents distrust between the banks (since they're over-leverged, opaque, and probably insolvent), they're using a the USD/EUR swap market for this capital and this drives the dollar up. Things still look horrible for the dollar in the longer run and the rally isn't actually a sign of any sort of strength. We're using treasury bond debt to pay for all this bailout crap and other wastes of money. This is something we can't afford to be doing. If other countries manage to decouple from the dollar, they're just going to stop buying our debt and the US will be forced to default or hyperinflate. We're just using one credit card to pay off another at this point.  That never works for long, of course. Other countries don't need us, but they do need a while to realize we're a massive black hole for goods/credit and shift their production/exports accordingly.  China is realizing this right now.  Our citizens are so far in debt, they can't afford to buy any more junk from China and China is paying with their surpluses.  They may prop the dollar up for a while, but sooner or later they'll realize it's futile. This is also relevant: http://londonbanker.blogspot.com/2008/11/dollar-strength-sustainability.html Catacomb Posted at 7:15 am on Nov. 21, 2008 Quote: from Bacon at 11:17 pm on Nov. 21, 2008 Quote: from Catacomb at 11:16 pm on Nov. 21, 2008 its because the other currencies (euro notably) aren't doing so well either But the US dollar has RISEN since the start of the year.   Which.. Doesn't make sense what are you talking about the US dollar was falling against major currencies for most of the year and only recently rising (against the Euro, not sure about others) economies are in recession, the Euro was over valued anyway and have you noticed oil prices? falling oil prices = a stronger dollar. oil was at an all time high in summer (close to $150 a barrel) its now dropping bellow $50 rileyy Posted at 4:25 am on Nov. 21, 2008 its because our President is a black ninja! Fishboner Posted at 4:17 am on Nov. 21, 2008 It's just not the US that is in a recession. Bacon Posted at 4:17 am on Nov. 21, 2008 Quote: from Catacomb at 11:16 pm on Nov. 21, 2008 its because the other currencies (euro notably) aren't doing so well either But the US dollar has RISEN since the start of the year. Which.. Doesn't make sense Catacomb Posted at 4:16 am on Nov. 21, 2008 its because the other currencies (euro notably) aren't doing so well either Marc15uk Posted at 4:15 am on Nov. 21, 2008 I agree 4/5 months ago 1 pound = 2 dollar now 1 pound = 0.48. At least Australian dollar is doing crap 1 Pound = 2.30 AUS Thanantos Posted at 4:15 am on Nov. 21, 2008 i don't know maybe they want us to worry Niddan Posted at 4:14 am on Nov. 21, 2008 because IT IS All 9 previous replies displayed.