

Dollar's Decline Speeds Up, With Risks for U.S - chailatte
http://online.wsj.com/article/SB10001424052748703907004576279321350926848.html?mod=googlenews_wsj

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zach
Here's a Google redirect if anyone else can't read the article as linked:

[http://www.google.com/url?q=http://online.wsj.com/article/SB...](http://www.google.com/url?q=http://online.wsj.com/article/SB10001424052748703907004576279321350926848.html?mod=googlenews_wsj)

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vessenes
I think it very likely that most of the US government is cheering a devalued
dollar; weak dollar = significantly increased exports, and jobs. America
really, really needs both of those right now.

What's clear in the last few years is that nobody is going to shoot missiles
or send troops over currency devaluation; this is a relatively simple way to
boost your own country's economic strength.

Since we're more decentralized than say, China, those who'd like devaluation
can't just mandate it, but I'd be stunned if a weak dollar is seen as a bad
thing by the current Administration.

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vessenes
p.s. The article imagines China dumping their $3T in US dollars; that would be
a real surprise; it would cause more strain on the RMB-USD rates, and boost US
exports.

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hugh3
I'm not surprised. I took advantage of the exchange rate to move a bunch of my
Australian dollars across to US dollars last week. But I was earning about 6%
on my savings account in Australia, and I'm only earning 0.1% in my savings
account in the US.

Obviously there's a huge element of pricing the interest rate discrepancy into
the exchange rate, so one should expect the exchange rate to return to
something more normal once the US economy starts growing again and interest
rates become more reasonable.

(Actually in related news, can anyone think of a good place to invest fifty
thousand US dollars right now?)

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mikegreenberg
(Jokingly) I can think of a few upcoming companies that could turn that around
for you in a few years. ;) (Seriously: And I'd love to pitch mine, if you're
interested.)

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RockyMcNuts
Been going on for a while -

[http://www.ritholtz.com/blog/2011/04/dollars-biggest-
decline...](http://www.ritholtz.com/blog/2011/04/dollars-biggest-
decline-2001-08/)

during the crisis the dollar strangely stopped declining partly due to a
'flight to quality', a lot of other countries were in even worse shape.

When you need to sell a lot of debt to foreign investors, they need to think
the currency is at a level where it won't decline too much in the future, and
if they don't think that, the dollar goes down or interest rates go up.

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mikegreenberg
The USD has been trending more strongly in relation to the NOK.
([http://www.google.com/search?sourceid=chrome&ie=UTF-8...](http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=1+usd+in+nok))
Probably an irrelevant currency for most, but the Kroner has been extremely
strong and independent (IMO). Can anyone explain how this trend relates to the
above article?

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RockyMcNuts
Norway has oil and a huge sovereign wealth fund, compared to certain countries
that import lots of oil and have lots of debt.

See page 5 where they are listed as the least risky sovereign debt in the
world (USA still #5, although the people who suggest not raising the debt
ceiling are trying to change that)

[http://blog.stocktwits.com/sponsored-post-cma-global-
soverei...](http://blog.stocktwits.com/sponsored-post-cma-global-sovereign-
credit-risk-report-for-q4-2010/)

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mikegreenberg
But even with such independence, the only way to reconcile this article with
my observation is to say that the NOK is weakening even faster than the USD. I
don't see/understand how that's the case.

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RockyMcNuts
Not sure I follow the math, since beginning of December NOK is up 14% against
the USD, about 3% against the EUR

<http://www.google.com/finance?q=CURRENCY%3ANOKUSD>

