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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (113363)	3/28/2008 11:42:32 PM
From: Hawkmoon	Respond to of 306849

Because demand for dollars (economic activity and monetary velocity) are diminishing. Lack of demand can result in just as much of a decline in the value of the dollar as actual increase in supply of them. And lack of demand will occur when there is economic turmoil and rates are being lowered. Notice how when we get "promising" news, the USD responds to the upside? But when we get more bad economic news the dollar declines? And when the Fed lowered and it was perceived that it might be the final rate cut, the dollar rallied. The reason, IMO, for this is that that given our current level of credit debt, economic uncertainty put that debt at risk of not being paid.. Positive economic data will restore confidence that this debt will be financed and demand for the dollar will increase.. At least that's how one of my economic's professors, in part, explained it.. ;0) Of course, there are other factors And of course, declining interest rates doesn't help. And the USD has been in nearly continuous decline since 2001 (coincidence with 9/11, and the consequent rate cuts and RE bubble?) charts3.barchart.com Recall that the Euro was in the depths of despair shortly after it was formally adopted. It required combined Central Bank intervention to salvage it.. But personally speaking, I blame low interest rates post 9/11, combined with lax lending standards that created this financial bubble.. But then again.. that's just my opinion.. I still believe that Europe and Asia, with less transparency in their banking system, is facing serious future problems in THEIR financial systems that are not yet being manifested in the markets. Hawk

To: Lizzie Tudor who wrote (113363)	3/30/2008 12:29:37 PM
From: John Vosilla	Respond to of 306849

'why the dollar declined like this? It has been cut in half' They are going to tie in Bill Clinton to that one too..bottom line just balance the budget, stop spreading democracy in Iraq and build a real economy at home free of the grip of defense and oil special interests that dominate these days .. Hear the latest on fair and balance FOX Financial shows this weekend? Things are fine, the media is to blame being too gloom and doom in order to get Dems elected<g> To me what is holding things up from total collapse is the kindness of strangers funding our $10T of debts and accepting such low interest rates to further indulge strapped US consumerism for their benefit.. Remains to be seen what 15%+ broad MZ money growth and $100+ oil ingrained into the economy will do on the back side long after GWB is sent to clear brush in Crawford..The damage and the opportunities from all this will be an ongoing theme for a generation. This administration is like Hoover, Nixon and Carter all roled into one..<ng>