The US dollar may collapse

[russ 1]

I see it this way as well. The only reason the dollar isn't even worse off now is the Chinese, Europeans, Middle Easterners, etc., have to figure out an exit strategy from US securities and currency and get out in a controlled manner.

Many countries have been propping up the dollar and our markets, only because they have a vested interest.

Investment returns are the biggest factor in the value of currency. Better returns on investments in the US will cause currency inflows at some point. The falling interest rates in the US are weakening the dollar, but this will not continue forever. Cheaper US exports will help US corporations in the short term.

The size of the US economy and relatively good investment returns from US equities will still justify investment in dollar denominated securities.

[trailmix 77]

I saw the other day that the USD and the Canadian Dollar are almost 1:1. Pretty amazing - didn't it used to be 3:1 not so long ago?

Not three to one, I can't ever remember it being that low and even looking at the last 10 years the lowest it ever got was around the 1.5 mark.

"The Canadian dollar roared to a 33-year high against the U.S. dollar on Tuesday after domestic retail sales data for August beat expectations".

Edited October 23, 2007 by trailmix

[Mr. Big Dog 10,747]

The falling interest rates in the US are weakening the dollar, but this will not continue forever.

The bigger problem is that we're in debt beyond belief. If the interest rates would be raised, consumer spending and the economy as a whole would tank. Bush's economic rescue was done entirely on borrowed funds. Both collectively and individually. We're really in sort of a catch-22 here.