Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (3853)	1/30/2006 1:00:50 PM
From: elmatador	Respond to of 218002

If more businesses buy foreign currencies using USD, the value of the other currencies increases vis a vis the USD. Take Brazil: Before you buy any product -or a Brazilian company or shares of a Brazilian company- you have to get your USD in your bank to buy Brazilian Real. But you need to find people with Brazilin Real who need to sell them. If there are not so many people willing to sell Real, then you have to offer more USD to get the Brazilian Real you need. Is traded weighted. At the same time there are businesses from Brazil that need to seel Brazilian Real to buy USD. GM or IBM or American Airlines need to repatriate money and Brazil need to buy USD to pay debts coming during this year. At the moment there are more USD coming in than going out since we are exporting a lot and the exporters are selling the USD they've got to our Central Bank. (No good for Elmat who needs to sell USD to pat for the house he's constructing. But good for SoT who holds shares in Brazilian companies!!!) The USD would be collapsing since lots of businesses and people want foreign curreicnes. But the Chinese keep buying USD from the US, and the USD holds its value. If other countries stop buying USD, the USD would collapse. OPEC asks for more USD from Chevron for its oil only because USD is the pricing agreed. Chevron buys UAE Dirhams from UAE Central Bank using USD to pay for the oil. UAE Central bank pays il company in UAE Dirhams. If it is France, France would sell Euros to buy UAE Dirhams to pay for the oil for the same amount of oil and gets more UAE Dirhams or Saudi Riyals