Dollar tanking again against €, GBP, etc.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

The dollar has been on a steady decline again. It broke $1.40 to the € today and is $1.59 to the British pound. The dollar is down against the SA rand, Oz dollar, you name it! Not long ago the € was in the $1.20s and the pound in the high $1.40s.

The commentators here say it is a result of the large release of printing press money back in March finally catching up with the dollar plus the downgrading of UK government debt a day or two ago which has had more impact on the US, which was not downgraded, because speculators are seeing paralells between UK and US government debt.

Glad I changed most of my availible dollars to € a few weeks ago. Just wish I had found a good rate to get some pounds, too.

[ArtsieAng Super Moderator Find all posts View Profile Close ArtsieAng]

Great, just in time for me to go to Paris.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Gold is at $958 and Oil is at $61.63/barrell.

What is likely to continue to happen is as the world takes the depression scenario off the table, they have less of a need to keep their money in the safest spot possible, i.e. US Treasuries.

Since Obama is borrowing an unprecedented 50% of GDP with no end in sight, I expect hyperinflation as the dollar declines in value and foreign capital flees our currency. The government will print its way out of this debt. What that does is severely harm fixed income assets.

The way to protect yourself against this ever increasingly imminent threat, buy real estate and lock in those fixed rate mortgages. The property value will increase with hyperinflation at the same time you would be paying a negative real interest rate. A 6% fixed rate loan in a 9% inflationary environment is 3% free money.

Obama is just moving us from one bubble to the next. Clinton started the tech bubble, when that burst, Bush created the housing bubble, now that that has burst, Obama is creating a US Treasury bubble.

It would have been better to just let the chips fall on the table, have everything crumble and start over. Then, all the bubbles are cleared from the system.

[PigsDad Senior Member Find all posts View Profile Close PigsDad]

As we eventually come out of this recession, I am looking where I should be weighting my investments (401k, IRAs). Would now be a good time to increase investment in foreign funds? It seems like one would profit on the currency exchange if you believe that the USD will devalue over the next several years relative to other currencies due to all the borrowing we are doing, right?

Asia Pacific or Europe -- which do you think will do better? I am looking for a bit more long-term and will diversify. Right now, I am too heavy in US funds.

Kurt

[PigsDad Senior Member Find all posts View Profile Close PigsDad]

Great, just in time for me to go to Paris.

I'll be in Italy in September. I have been trying to pre-pay as much as I can (hotels, rental car, etc.) while the USD was up a bit.

Kurt

[Hoc Super Moderator Find all posts View Profile Close Hoc]

That's why I advocated buying foreign currencies in January in the countries where you are likely to travel over the next year or two.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

As we eventually come out of this recession, I am looking where I should be weighting my investments (401k, IRAs). Would now be a good time to increase investment in foreign funds? It seems like one would profit on the currency exchange if you believe that the USD will devalue over the next several years relative to other currencies due to all the borrowing we are doing, right?

Asia Pacific or Europe -- which do you think will do better? I am looking for a bit more long-term and will diversify. Right now, I am too heavy in US funds.

Kurt

I think the best bets are the Oz, NZ, and Canadian dollars. Those countries do not have long running deficits and are not running the printing presses like crazy.

My retirement investments are all offshore.

[Elan Senior Member Find all posts View Profile Close Elan]

I think the best bets are the Oz, NZ, and Canadian dollars. Those countries do not have long running deficits and are not running the printing presses like crazy.

My retirement investments are all offshore.

I would agree that the Canadian dollar would be a good investment. Canada is rich in natural resources, so one gets not only the devaluing of the US dollar in the equation, but also possible organic growth as well.

I have been long gold and oil for a while, and just recently went short the US dollar. I am leaning much more toward macroeconomic plays in my portfolio as compared to individual stocks.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I would agree that the Canadian dollar would be a good investment. Canada is rich in natural resources, so one gets not only the devaluing of the US dollar in the equation, but also possible organic growth as well.

I have been long gold and oil for a while, and just recently went short the US dollar. I am leaning much more toward macroeconomic plays in my portfolio as compared to individual stocks.

Those are smart investments. I think you should add real estate to that equation.

Prices are depressed and with hyper inflation, fixed rates loans will have negative real interest rates.

[Elan Senior Member Find all posts View Profile Close Elan]

Those are smart investments. I think you should add real estate to that equation.

Prices are depressed and with hyper inflation, fixed rates loans will have negative real interest rates.

Yes, I am looking at RE as well. I'm in the process of refi'ing my personal residence back to a full 30 years, as I want to be able to use 4.75% money as long as possible in the face of rising interest rates (inflation). Contemplating some other RE investments as well, but still researching my options.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

I recently heard a report on a financial program on the BBC that they expected the dollar to be back in the range it was the middle of last year by the end of this year. The US simply has printed too many dollars.

[Elan Senior Member Find all posts View Profile Close Elan]

I recently heard a report on a financial program on the BBC that they expected the dollar to be back in the range it was the middle of last year by the end of this year. The US simply has printed too many dollars.

That's about a 10% drop from current value.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

I am watching the events in Iran for impact on the dollar. If instability there causes oil to rise, then a rise in oil prices almost invariably drives the dollar down.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

And yet, at least while I was looking today, the dollar was up.