ok - dollar and foreign funds

From everything I see, it seem unstoppable that the dollar
will decline in value in the coming years.

I remember in 1985 when he had a trade deficit far less severe
than this we had the Plaza Accords which devalued the dollar
by 50%. This brought our trade deficit into line.

What can stop the dollar from declining given our ever
expanding trade deficits?

Even the EU fell apart, the Euro is still a strong currency
and it looks like Russia/China may form their own currency.
Russia is *VERY* upset about it's currency and feels it's
undervalued right now.

I know - this might be OT for this group. But I'm a big fan
of foreign index funds now.

-Rich

Re: ok - dollar and foreign funds

Rich <> wrote:
> and it looks like Russia/China may form their own currency.
> Russia is *VERY* upset about it's currency and feels it's
> undervalued right now.
> I know - this might be OT for this group. But I'm a big fan
> of foreign index funds now.

I'm not that big on currency trading...actually...I'm not into
currency trading. That said, I've been holding onto LSGBX for
a few years and it's done well. It's a bunch of stable, nicely
rated foreign bonds that have provided good results given their
fixed-income nature and the devaluation of the dollar.

I've avoided foreign stock funds (except for DODFX) because I
really don't think forein equities will do so well if we have
a slowdown here.

The dollar rallied when the EU collapsed but that was temporary.

I don't know why there hasn't been a meeting similar to the Plaza
Accords. If this were done back when we started this recovery
we would be in a much better position to deal with the slow
down in housing and continual increase in oil prices.

Re: ok - dollar and foreign funds

Mike Stone wrote:
> Rich <> wrote:
>
>>and it looks like Russia/China may form their own currency.
>>Russia is *VERY* upset about it's currency and feels it's
>>undervalued right now.
>>I know - this might be OT for this group. But I'm a big fan
>>of foreign index funds now.
>
>
> I'm not that big on currency trading...actually...I'm not into
> currency trading. That said, I've been holding onto LSGBX for
> a few years and it's done well. It's a bunch of stable, nicely
> rated foreign bonds that have provided good results given their
> fixed-income nature and the devaluation of the dollar.
>
> I've avoided foreign stock funds (except for DODFX) because I
> really don't think forein equities will do so well if we have
> a slowdown here.
>
> The dollar rallied when the EU collapsed but that was temporary.
>
> I don't know why there hasn't been a meeting similar to the Plaza
> Accords. If this were done back when we started this recovery
> we would be in a much better position to deal with the slow
> down in housing and continual increase in oil prices.
>
>
Er.. When did the EU collapse and in what way? I am living in it and did
not notice anything special happening.

The correlation between US indices like the S&P500 and the EU countries,
Switzerland, Japan and Hong Kong was about 0.5 for the period 1991-2000
so they are not all that close together. The correlation between any two
US indices is about 0.93 or above.

If you think the dollar is going down then it will pay to be in foreign
funds to benefit from the currency exchange rate changes.

Re: ok - dollar and foreign funds

Rich wrote:

> What can stop the dollar from declining given our ever
> expanding trade deficits?

Actually, I think the dollar is declining, not so much due to trade
deficits as due to Federal budget deficits. But to answer your question:

What can stop the dollar from declining is: Rising interest rates.
That's been the usual way that the dollar gets propped up. It makes
U.S. bonds more attractive to foreign investors.

And interest rates are going to continue to rise to head off inflation.

I believe that Alan Greenspan likes to target the price of gold as his
early warning indicator of inflation. Every time the price of gold has
risen significantly, he's hiked short-term interest rates less than a
year afterward. That happened in 1987, 1993, and last year.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: ok - dollar and foreign funds

David Wilkinson <> wrote:

> Er.. When did the EU collapse and in what way? I am living in it and did
> not notice anything special happening.

When most Europeans rejected the constitution the dollar rallied.
Hey, best of luck to you guys. I'll plead ignorance into what
is really going in Europe :)

> If you think the dollar is going down then it will pay to be in foreign
> funds to benefit from the currency exchange rate changes.

LSGBX is a collection of bonds from other countries. As the dollar
goes down in value it gains value automatically. It doesn't do
any hedging or adjustments for currency.

Re: ok - dollar and foreign funds

Steven L. <> wrote:
> Actually, I think the dollar is declining, not so much due to trade
> deficits as due to Federal budget deficits. But to answer your question:

The valuation has moved independent of the national debt. Trade
deficits do play a big role in currency valuation.

Other nations hold onto dollar denominated assets because they don't
want their currency to inflate. Their currency inflating would
mean we'll consume fewer of their goods so they keep holding onto
our dollars.

At some point though, the markets correct things and fall into
equilibrium. Really, this is one of the safest bets out there.

> I believe that Alan Greenspan likes to target the price of gold as his
> early warning indicator of inflation. Every time the price of gold has
> risen significantly, he's hiked short-term interest rates less than a
> year afterward. That happened in 1987, 1993, and last year.

Greenspan has made some overtures to how he follow's the spirit of
the gold standard but tying your currency to gold is a tough thing
to manage given our obsession with trade.

If we followed the gold standard we'd be in a recession every
time there was a trade deficit.

Re: ok - dollar and foreign funds

Mike Stone wrote:
> David Wilkinson <> wrote:
>
>
>>Er.. When did the EU collapse and in what way? I am living in it and did
>>not notice anything special happening.
>
>
> When most Europeans rejected the constitution the dollar rallied.
> Hey, best of luck to you guys. I'll plead ignorance into what
> is really going in Europe :)
>
Oh, was that the low point for the EU? For me and lots of us English
nationalists that was the high point when the apparently unstoppable,
bureaucratic, red-tape-festooned EU behemoth unexpectedly hit the
buffers and came off the rails! And it was thanks to those EU founders
and fans the cheese-eating French too :-) Vive les fromageois! :-)

Now the march towards government by socialist unelected officials, tax
collectors and petty rule framers in a federal Europe as a nightmare,
Orwellian, Kafkaesque state has been halted we can look forward to a
brighter future.

Yes the Dollar did rally from its long term decline against the Euro,
looking at the exchange rate graph, but it peaked no higher than the
0.84 Euro/$ it reached in April 2004 and is falling back towards 0.80
again now. Considering it was at 1.20 Eu/$ a few times in 2000-2002,
it's a pretty massive decline against the Euro of over 30%. When the
pound used to devalue like that the UK regarded it as a major national
crisis and chancellors and governments used to fall.
>
>>If you think the dollar is going down then it will pay to be in foreign
>>funds to benefit from the currency exchange rate changes.
>
>
> LSGBX is a collection of bonds from other countries. As the dollar
> goes down in value it gains value automatically. It doesn't do
> any hedging or adjustments for currency.
>
>
>
>

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df0rrm$b4m$

[snip]

> Oh, was that the low point for the EU? For me and lots of us English
> nationalists that was the high point when the apparently unstoppable,
> bureaucratic, red-tape-festooned EU behemoth unexpectedly hit the
> buffers and came off the rails! And it was thanks to those EU founders
> and fans the cheese-eating French too :-) Vive les fromageois! :-)
>
> Now the march towards government by socialist unelected officials, tax
> collectors and petty rule framers in a federal Europe as a nightmare,
> Orwellian, Kafkaesque state has been halted we can look forward to a
> brighter future.
>
> Yes the Dollar did rally from its long term decline against the Euro,
> looking at the exchange rate graph, but it peaked no higher than the
> 0.84 Euro/$ it reached in April 2004 and is falling back towards 0.80
> again now. Considering it was at 1.20 Eu/$ a few times in 2000-2002,
> it's a pretty massive decline against the Euro of over 30%. When the
> pound used to devalue like that the UK regarded it as a major national
> crisis and chancellors and governments used to fall.
> >

David:

It's all a matter of perspective. Did the dollar decline vs. the Euro or
did the Euro simply recover? Don't forget it entered this world at $1.17.

All of this nonsense about the "inevitable" decline of the dollar is much
overblown (like all market manias). People need to understand that when you
sell dollars, you need to buy something else. Our short-term interest rates
(the kind paid on money) are near historic lows yet are still higher than
the competition.

I'm sure the twin deficits don't help the value of the dollar but I am also
sure that a growing world economy can absorb massive amounts of its currency
of choice. Europe (and UK largely) are everything you say they are. Their
continued failure to come up with a way to make decisions collectively
doesn't stir faith that they will overcome these problems and get their
economy growing again.

Not liking Bush is not a great reason to buy Euros. The dollar will go up
and down but it's not going away anytime soon.

-herb

Re: ok - dollar and foreign funds

Herb wrote:
> "David Wilkinson" <> wrote in message
> news:df0rrm$b4m$
>
> [snip]
>

> David:
>
> It's all a matter of perspective. Did the dollar decline vs. the Euro or
> did the Euro simply recover? Don't forget it entered this world at $1.17.
>
> All of this nonsense about the "inevitable" decline of the dollar is much
> overblown (like all market manias). People need to understand that when you
> sell dollars, you need to buy something else. Our short-term interest rates
> (the kind paid on money) are near historic lows yet are still higher than
> the competition.
>
> I'm sure the twin deficits don't help the value of the dollar but I am also
> sure that a growing world economy can absorb massive amounts of its currency
> of choice. Europe (and UK largely) are everything you say they are. Their
> continued failure to come up with a way to make decisions collectively
> doesn't stir faith that they will overcome these problems and get their
> economy growing again.
>
> Not liking Bush is not a great reason to buy Euros. The dollar will go up
> and down but it's not going away anytime soon.
>
> -herb
>
>
>
Herb

I can't comment on whether exchange rate changes are good or bad from
any personal view as I really don't understand economics well enough to
say. I can only report the conventional view in the UK media that
devaluation is supposed to be bad, even shameful, and a sign of a
faltering economy in crisis, while a rising pound is a sign of strength.
I think the Germans have a similar view from the galloping inflation of
the old Wiemar republic days and regret the demise of the more recent
strong Deutchmark in favour of the weedier Euro. But, if you say the
devaluation that is bad for us is good for the USA then You may be right.

The practical outcome at this end is whether one can make any money out
of UK mutual funds investing in North America and valued in Pounds. From
Jan 2000 to now the S&P500 has gone from 1455 to 1212, a 17% decline.
Over the same period the exchange rate has gone from 1.64 USD/GBP to
1.80 USD/GBP, a further decline of 9%. The overall effect is a 24%
decline so investing in the land of free enterprise has been a bad
bargain for UK investors. Some minor income from dividends may reduce
this deficit slightly but these have been historically low during the
period.

On the other hand the bureaucratic EU has been a better bet. A European
index fund has only declined by 8% over the same period. The UK FTSE
All-Share index has declined by 16%. It would seem that the more free
enterprise you have the more stock prices decline. Hmmm...

David

Re: ok - dollar and foreign funds

Herb <> wrote:
>
> Not liking Bush is not a great reason to buy Euros. The dollar will go up
> and down but it's not going away anytime soon.

Herb,

I never said the dollar is going away. Realistically, I think the
Euro, the US Dollar & perhaps a 3rd currency TBD would be dominant.

That's like looking at the Nasdaq in 1999 and saying "Eventually it
will be higher". You're right, given enough time it will be :)

The dollar rebounded very nicely after the plaza accords wiped away
our trade deficits. I'm sure it'll happen again.

-Mike

Re: ok - dollar and foreign funds

David Wilkinson wrote:

> Oh, was that the low point for the EU? For me and lots of us English
> nationalists that was the high point when the apparently unstoppable,
> bureaucratic, red-tape-festooned EU behemoth unexpectedly hit the
> buffers and came off the rails! And it was thanks to those EU founders
> and fans the cheese-eating French too :-) Vive les fromageois! :-)
>
> Now the march towards government by socialist unelected officials, tax
> collectors and petty rule framers in a federal Europe as a nightmare,
> Orwellian, Kafkaesque state has been halted we can look forward to a
> brighter future.

David,
I don't know if you're being serious or tongue-in-cheek in your critique
of the EU.

But I'll be serious: I read the proposed EU Constitution (all 500 pages
of it), and I found it to be rough going, even before considering how it
would be enforced in practice. If you don't understand what it's all
about, you were right to oppose it.


> Yes the Dollar did rally from its long term decline against the Euro,
> looking at the exchange rate graph, but it peaked no higher than the
> 0.84 Euro/$ it reached in April 2004 and is falling back towards 0.80
> again now. Considering it was at 1.20 Eu/$ a few times in 2000-2002,
> it's a pretty massive decline against the Euro of over 30%. When the
> pound used to devalue like that the UK regarded it as a major national
> crisis and chancellors and governments used to fall.

I believe the dollar is in a long-term slump, because of the Iraq War
and the inevitable desire of the U.S. government to reflate the currency
to prevent high energy prices from hurting the U.S. economy.

A lot of factors are falling into place that are reminiscent of the 1970's.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: ok - dollar and foreign funds

Steven L. wrote:
> David Wilkinson wrote:
>
>> Oh, was that the low point for the EU? For me and lots of us English
>> nationalists that was the high point when the apparently unstoppable,
>> bureaucratic, red-tape-festooned EU behemoth unexpectedly hit the
>> buffers and came off the rails! And it was thanks to those EU founders
>> and fans the cheese-eating French too :-) Vive les fromageois! :-)
>>
>> Now the march towards government by socialist unelected officials, tax
>> collectors and petty rule framers in a federal Europe as a nightmare,
>> Orwellian, Kafkaesque state has been halted we can look forward to a
>> brighter future.
>
>
> David,
> I don't know if you're being serious or tongue-in-cheek in your critique
> of the EU.
>
Steve

A bit of both, as usual!

> But I'll be serious: I read the proposed EU Constitution (all 500 pages
> of it), and I found it to be rough going, even before considering how it
> would be enforced in practice. If you don't understand what it's all
> about, you were right to oppose it.
>
Wow, you have read it??!!! Acceptez-vous cet legion d'honneur, si'l vous
plait, avec les compliments de Signor Prodi (President, unelecte, du
EU). :-)

No, slightly more seriously, I have not read it and don't suppose anyone
else much has either, who did not have to for their job, but from
summaries in the press and TV we (the British public) know all we need
to know about it.

Correct me if I am wrong but it is another major step towards a federal
Europe where the nationalities of the individual countries are submerged
in a largely unelected European "Parliament" and European commission,
which has its own President, Foreign Minister and defence force. A huge,
expensive and corrupt civil service, again of unelected officials, will
keep churning out ever more laws and directives strangling industry on
the French and German models, reducing the UK parliament to a rubber
stamp for EU regulations and turning the UK into part of a socialist
state on the lines that have largely failed economically in the EU so far.

The last time the British public were asked about this was in about 1973
in Ted Heath's day when it was a simple free trade zone called the
common market, and we said yes, that was OK we want to join. Since then,
with the connivance of politicians and officials it has grown hydra-like
or like some vast Chinese knotweed absorbing cash and people and spewing
out an endless series of regulations. The German and French public were
never asked what they wanted, just taken into it by politicians. The UK
public never took to the Euro or greater centralisation but no one asked
our opinion anyway.

The mistake the EU central body made was that after decades of
bureaucratic growth driven by civil servants and politicians they got so
complacent they thought everyone thought as they did and that expecting
every country to ratify the constitution was just a formality. It was
indeed so when the politicians voted for it in their parliaments, as in
Germany, where the people have still never been consulted. Chirac made
the mistake of putting it to a referendum instead and so did the Dutch
and even Blair in a rare lapse from control-freakery offered a
referendum to us on it. I think he guessed that one or more other
countries would turn it down before we held our referendum so he would
not actually have to hold it, which is how it turned out. With both
French and the Dutch rejecting it the constitution is dead in the water
so no one is going to ask us to give it the coup de grace.

The UK position is that all the prophecies of doom on not joining the
Euro turned out to be so much hot air. The UK economy has done a lot
better than the EU ones and the city of London has gone from strength to
strength as a financial centre treating the Euro as just another
currency. No one wants to adopt the Euro instead of the Pound or be
bossed about by unelected officials in Brussels and there is widespread
opposition to any further surrender of sovereignty to them.

Perversely the French rejected the constitution for the opposite reason,
that it was too much like an Anglo-Saxon UK/US free enterprise model
economy and not socialist enough! We shall never see eye to eye with
them, which is why we used to fight them for a thousand years or so. Now
we just compete on the football field but have a healthy mutual distrust.
>
>> Yes the Dollar did rally from its long term decline against the Euro,
>> looking at the exchange rate graph, but it peaked no higher than the
>> 0.84 Euro/$ it reached in April 2004 and is falling back towards 0.80
>> again now. Considering it was at 1.20 Eu/$ a few times in 2000-2002,
>> it's a pretty massive decline against the Euro of over 30%. When the
>> pound used to devalue like that the UK regarded it as a major national
>> crisis and chancellors and governments used to fall.
>
>
> I believe the dollar is in a long-term slump, because of the Iraq War
> and the inevitable desire of the U.S. government to reflate the currency
> to prevent high energy prices from hurting the U.S. economy.
>
> A lot of factors are falling into place that are reminiscent of the 1970's.
>
>

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df12li$cme$
> Herb wrote:
> > "David Wilkinson" <> wrote in message
> > news:df0rrm$b4m$
> >
> > [snip]
> >
>
> > David:
> >
> > It's all a matter of perspective. Did the dollar decline vs. the Euro
or
> > did the Euro simply recover? Don't forget it entered this world at
$1.17.
> >
> > All of this nonsense about the "inevitable" decline of the dollar is
much
> > overblown (like all market manias). People need to understand that when
you
> > sell dollars, you need to buy something else. Our short-term interest
rates
> > (the kind paid on money) are near historic lows yet are still higher
than
> > the competition.
> >
> > I'm sure the twin deficits don't help the value of the dollar but I am
also
> > sure that a growing world economy can absorb massive amounts of its
currency
> > of choice. Europe (and UK largely) are everything you say they are.
Their
> > continued failure to come up with a way to make decisions collectively
> > doesn't stir faith that they will overcome these problems and get their
> > economy growing again.
> >
> > Not liking Bush is not a great reason to buy Euros. The dollar will go
up
> > and down but it's not going away anytime soon.
> >
> > -herb
> >
> >
> >
> Herb
>
> I can't comment on whether exchange rate changes are good or bad from
> any personal view as I really don't understand economics well enough to
> say. I can only report the conventional view in the UK media that
> devaluation is supposed to be bad, even shameful, and a sign of a
> faltering economy in crisis, while a rising pound is a sign of strength.
> I think the Germans have a similar view from the galloping inflation of
> the old Wiemar republic days and regret the demise of the more recent
> strong Deutchmark in favour of the weedier Euro. But, if you say the
> devaluation that is bad for us is good for the USA then You may be right.
>
> The practical outcome at this end is whether one can make any money out
> of UK mutual funds investing in North America and valued in Pounds. From
> Jan 2000 to now the S&P500 has gone from 1455 to 1212, a 17% decline.
> Over the same period the exchange rate has gone from 1.64 USD/GBP to
> 1.80 USD/GBP, a further decline of 9%. The overall effect is a 24%
> decline so investing in the land of free enterprise has been a bad
> bargain for UK investors. Some minor income from dividends may reduce
> this deficit slightly but these have been historically low during the
> period.
>
> On the other hand the bureaucratic EU has been a better bet. A European
> index fund has only declined by 8% over the same period. The UK FTSE
> All-Share index has declined by 16%. It would seem that the more free
> enterprise you have the more stock prices decline. Hmmm...
>
> David

David:

I don't know what is conventional in the British press but no major currency
has been "devalued" since the current monetary system was set up back in the
1960s. Currencies float in relatively free markets.

I'm sure you could find similar periods where holding dollar denominated
assets was a winning game. As you know, the trick is choosing when to
switch.

My only point is that you can't argue the long-term decline of a major
currency without arguing the long-term appreciation of another. I just
don't see what that other currency is.

-herb

Re: ok - dollar and foreign funds

"Mike Stone" <> wrote in message
news:FPYQe.69759$
> Herb <> wrote:
> >
> > Not liking Bush is not a great reason to buy Euros. The dollar will go
up
> > and down but it's not going away anytime soon.
>
> Herb,
>
> I never said the dollar is going away. Realistically, I think the
> Euro, the US Dollar & perhaps a 3rd currency TBD would be dominant.
>
> That's like looking at the Nasdaq in 1999 and saying "Eventually it
> will be higher". You're right, given enough time it will be :)
>
> The dollar rebounded very nicely after the plaza accords wiped away
> our trade deficits. I'm sure it'll happen again.
>
> -Mike

Mike:

Your analogy fails in that there are alternatives to investing in NASDAQ.
The only possible alternatives to dollars are Euros, Yen and Sterling. What
about any of those economies makes you think they will do better than ours.

-herb

Re: ok - dollar and foreign funds

Herb wrote:
> "David Wilkinson" <> wrote in message
> news:df12li$cme$
>
>>Herb wrote:
>>
>>>"David Wilkinson" <> wrote in message
>>>news:df0rrm$b4m$
>>>
>>>[snip]
>>>
>>
>>>David:
>>>
>>>It's all a matter of perspective. Did the dollar decline vs. the Euro
>
> or
>
>>>did the Euro simply recover? Don't forget it entered this world at
>
> $1.17.
>
>>>All of this nonsense about the "inevitable" decline of the dollar is
>
> much
>
>>>overblown (like all market manias). People need to understand that when
>
> you
>
>>>sell dollars, you need to buy something else. Our short-term interest
>
> rates
>
>>>(the kind paid on money) are near historic lows yet are still higher
>
> than
>
>>>the competition.
>>>
>>>I'm sure the twin deficits don't help the value of the dollar but I am
>
> also
>
>>>sure that a growing world economy can absorb massive amounts of its
>
> currency
>
>>>of choice. Europe (and UK largely) are everything you say they are.
>
> Their
>
>>>continued failure to come up with a way to make decisions collectively
>>>doesn't stir faith that they will overcome these problems and get their
>>>economy growing again.
>>>
>>>Not liking Bush is not a great reason to buy Euros. The dollar will go
>
> up
>
>>>and down but it's not going away anytime soon.
>>>
>>>-herb
>>>
>>>
>>>
>>
>>Herb
>>
>>I can't comment on whether exchange rate changes are good or bad from
>>any personal view as I really don't understand economics well enough to
>>say. I can only report the conventional view in the UK media that
>>devaluation is supposed to be bad, even shameful, and a sign of a
>>faltering economy in crisis, while a rising pound is a sign of strength.
>>I think the Germans have a similar view from the galloping inflation of
>>the old Wiemar republic days and regret the demise of the more recent
>>strong Deutchmark in favour of the weedier Euro. But, if you say the
>>devaluation that is bad for us is good for the USA then You may be right.
>>
>>The practical outcome at this end is whether one can make any money out
>>of UK mutual funds investing in North America and valued in Pounds. From
>>Jan 2000 to now the S&P500 has gone from 1455 to 1212, a 17% decline.
>>Over the same period the exchange rate has gone from 1.64 USD/GBP to
>>1.80 USD/GBP, a further decline of 9%. The overall effect is a 24%
>>decline so investing in the land of free enterprise has been a bad
>>bargain for UK investors. Some minor income from dividends may reduce
>>this deficit slightly but these have been historically low during the
>>period.
>>
>>On the other hand the bureaucratic EU has been a better bet. A European
>>index fund has only declined by 8% over the same period. The UK FTSE
>>All-Share index has declined by 16%. It would seem that the more free
>>enterprise you have the more stock prices decline. Hmmm...
>>
>>David
>
>
> David:
>
> I don't know what is conventional in the British press but no major currency
> has been "devalued" since the current monetary system was set up back in the
> 1960s. Currencies float in relatively free markets.
>
> I'm sure you could find similar periods where holding dollar denominated
> assets was a winning game. As you know, the trick is choosing when to
> switch.
>
> My only point is that you can't argue the long-term decline of a major
> currency without arguing the long-term appreciation of another. I just
> don't see what that other currency is.
>
> -herb
>
>
The Euro for a start. It would devalue against the Yuan as well but the
Chinese won't let it, until the recent 2% or so move. How about the Yen?
I have not looked it up.

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df2lpp$d5i$
> Herb wrote:
> > "David Wilkinson" <> wrote in message
> > news:df12li$cme$
> > David:
> >
> > I don't know what is conventional in the British press but no major
currency
> > has been "devalued" since the current monetary system was set up back in
the
> > 1960s. Currencies float in relatively free markets.
> >
> > I'm sure you could find similar periods where holding dollar denominated
> > assets was a winning game. As you know, the trick is choosing when to
> > switch.
> >
> > My only point is that you can't argue the long-term decline of a major
> > currency without arguing the long-term appreciation of another. I just
> > don't see what that other currency is.
> >
> > -herb
> >
> >
> The Euro for a start. It would devalue against the Yuan as well but the
> Chinese won't let it, until the recent 2% or so move. How about the Yen?
> I have not looked it up.

How can you be so critical of the European economic system but willing to
invest in it?

How much of your portfolio is Yuan denominated? It may, someday, become a
world currency but pigs may also sprout wings. It remains to be seen.

-herb

Re: ok - dollar and foreign funds

Herb wrote:
> "David Wilkinson" <> wrote in message
> news:df2lpp$d5i$
>
>>Herb wrote:
>>
>>>"David Wilkinson" <> wrote in message
>>>news:df12li$cme$
>>>David:
>>>
>>>I don't know what is conventional in the British press but no major
>
> currency
>
>>>has been "devalued" since the current monetary system was set up back in
>
> the
>
>>>1960s. Currencies float in relatively free markets.
>>>
>>>I'm sure you could find similar periods where holding dollar denominated
>>>assets was a winning game. As you know, the trick is choosing when to
>>>switch.
>>>
>>>My only point is that you can't argue the long-term decline of a major
>>>currency without arguing the long-term appreciation of another. I just
>>>don't see what that other currency is.
>>>
>>>-herb
>>>
>>>
>>
>>The Euro for a start. It would devalue against the Yuan as well but the
>>Chinese won't let it, until the recent 2% or so move. How about the Yen?
>>I have not looked it up.
>
>
> How can you be so critical of the European economic system but willing to
> invest in it?
>
Because for all the reports from economists about lagging growth rates
and industries strangled by regulations, union interference and social
costs the European stock markets valued in Pounds Sterling have gone up
more than the American one. I will leave the explanation of this paradox
to you.

> How much of your portfolio is Yuan denominated? It may, someday, become a
> world currency but pigs may also sprout wings. It remains to be seen.
>
As far as I know none of my portfolio is Yuan dominated. I understand
that although China has prospered greatly in recent years it has proved
very difficult for investors outside the country to make any money out
of it.

Predictions of GDP growth usually have the Chinese GDP overtaking the
USA GDP in 2030 to 2050. Of course predictions are always uncertain,
especially about the future, but it might pay to start training your
pigs in aerodynamics and navigation skills :-)

> -herb
>
>

Re: ok - dollar and foreign funds

Herb <> wrote:

> Your analogy fails in that there are alternatives to investing in NASDAQ.
> The only possible alternatives to dollars are Euros, Yen and Sterling. What
> about any of those economies makes you think they will do better than ours.

Herb,

The growth of our economy isn't the deciding factor here. Look, I'm
sure if the US slowed down, the rest of the world would surely follow
us because of how much we import.

What gives the dollar it's precarious position right now is the trade
deficit we're running. I believe every trade partner we have is running
a trade surplus with us.

Eventually, they only way to effectively trade with them is a devaluation
of the currency. This is why the trend for the dollar has declined so much
in the last 5yrs. It's rallied recently but I believe it will continue to
devalue.

Sure, afterwards I'm sure the currency will be fine.

Europe doesn't have our trade deficit problem.

Like I said before, my understanding of the Plaza Accords was that Reagan
agreed to devalue the dollar and raise the Franc & Yuan by roughly 50%.
Within a few years we had equilibrium. Then around the mid-1990's the
dollar grew in value and we started having more trade deficits.

Note: Somewhat off topic here, but some economists say what really led
to that final stock market surge in the late 90's was the trade deficit.
Other nations held onto our dollars and invested them into equities. This
drove up the value of our markets significantly.

-Mike

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df0rrm$b4m$
>
> Oh, was that the low point for the EU? For me and lots of us English
> nationalists that was the high point
>
EU is the greatest invention since the sliced cheese, dude. No more
passport controls, no more carrying loose changes in 20 different currencies
when I come back home. Now, only if we can do something about those pesky
swiss and their stupid francs...

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df3i5k$6ok$
> Herb wrote:
> > "David Wilkinson" <> wrote in message
> > news:df2lpp$d5i$
> >
> >>Herb wrote:
> >>
> >>>"David Wilkinson" <> wrote in
message
> >>>news:df12li$cme$
> >>>David:
> >>>
> >>>I don't know what is conventional in the British press but no major
> >
> > currency
> >
> >>>has been "devalued" since the current monetary system was set up back
in
> >
> > the
> >
> >>>1960s. Currencies float in relatively free markets.
> >>>
> >>>I'm sure you could find similar periods where holding dollar
denominated
> >>>assets was a winning game. As you know, the trick is choosing when to
> >>>switch.
> >>>
> >>>My only point is that you can't argue the long-term decline of a major
> >>>currency without arguing the long-term appreciation of another. I just
> >>>don't see what that other currency is.
> >>>
> >>>-herb
> >>>
> >>>
> >>
> >>The Euro for a start. It would devalue against the Yuan as well but the
> >>Chinese won't let it, until the recent 2% or so move. How about the Yen?
> >>I have not looked it up.
> >
> >
> > How can you be so critical of the European economic system but willing
to
> > invest in it?
> >
> Because for all the reports from economists about lagging growth rates
> and industries strangled by regulations, union interference and social
> costs the European stock markets valued in Pounds Sterling have gone up
> more than the American one. I will leave the explanation of this paradox
> to you.

It's no paradox at all. From what you say, Sterling must be doing well
against the Euro. Do you really think the world is going to switch all of
its reserves to Sterling?

>
> > How much of your portfolio is Yuan denominated? It may, someday, become
a
> > world currency but pigs may also sprout wings. It remains to be seen.
> >
> As far as I know none of my portfolio is Yuan dominated. I understand
> that although China has prospered greatly in recent years it has proved
> very difficult for investors outside the country to make any money out
> of it.
>
> Predictions of GDP growth usually have the Chinese GDP overtaking the
> USA GDP in 2030 to 2050. Of course predictions are always uncertain,
> especially about the future, but it might pay to start training your
> pigs in aerodynamics and navigation skills :-)

I wouldn't buy my helmet right away. The idea of a communist dictatorship
ruling over a burgeoning capitalist economy is a paradox that has yet to be
resolved. What do you think will happen when China suffers its first big
recession? Do you really think only Chinese companies are investing in
China?
>
> > -herb
> >
> >

Re: ok - dollar and foreign funds

"Mike Stone" <> wrote in message
news:ixhRe.69867$
> Herb <> wrote:
>
> > Your analogy fails in that there are alternatives to investing in
NASDAQ.
> > The only possible alternatives to dollars are Euros, Yen and Sterling.
What
> > about any of those economies makes you think they will do better than
ours.
>
> Herb,
>
> The growth of our economy isn't the deciding factor here. Look, I'm
> sure if the US slowed down, the rest of the world would surely follow
> us because of how much we import.
>
> What gives the dollar it's precarious position right now is the trade
> deficit we're running. I believe every trade partner we have is running
> a trade surplus with us.
>
> Eventually, they only way to effectively trade with them is a devaluation
> of the currency. This is why the trend for the dollar has declined so
much
> in the last 5yrs. It's rallied recently but I believe it will continue to
> devalue.
>
> Sure, afterwards I'm sure the currency will be fine.
>
> Europe doesn't have our trade deficit problem.
>
> Like I said before, my understanding of the Plaza Accords was that Reagan
> agreed to devalue the dollar and raise the Franc & Yuan by roughly 50%.
> Within a few years we had equilibrium. Then around the mid-1990's the
> dollar grew in value and we started having more trade deficits.

The Plaza Accords was an agreement with foreign central banks to manipulate
the currency markets. This led to disaster, particularly for Japan.
Believe me, if the US President had the power to "devalue" the dollar, he
would have done so by now. We would love our exports to get cheaper. I
don't see why our trading partners would agree to that.

In the modern monetary system, you devalue your currency the way we are
doing today by printing lots of treasury securities.
>
> Note: Somewhat off topic here, but some economists say what really led
> to that final stock market surge in the late 90's was the trade deficit.
> Other nations held onto our dollars and invested them into equities. This
> drove up the value of our markets significantly.

Bingo. I don't deny that the twin deficits, per se, put downward pressure
on the dollar, but if people outside the US want dollars (either to conduct
trade with each other or to invest in US securities) then that pressure is
limited.

As I have said, currencies will fluctuate over time in open markets. All I
am saying is that a long-term decline in the dollar is not "inevitable."

-herb

Re: ok - dollar and foreign funds

TK Sung wrote:
> "David Wilkinson" <> wrote in message
> news:df0rrm$b4m$
>
>>Oh, was that the low point for the EU? For me and lots of us English
>>nationalists that was the high point
>>
>
> EU is the greatest invention since the sliced cheese, dude. No more
> passport controls, no more carrying loose changes in 20 different currencies
> when I come back home. Now, only if we can do something about those pesky
> swiss and their stupid francs...
>
>
And then you get to US customs and have to have these special passports
with your fingerprints, iris pattern, print out of your genetic code and
a signed letter from OBL saying you are not now and have never been a
member of his organisation. :-)

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df4uae$gfi$
>
> And then you get to US customs and have to have these special passports
> with your fingerprints, iris pattern, print out of your genetic code and
> a signed letter from OBL saying you are not now and have never been a
> member of his organisation. :-)
>
Nothing that EAU can't solve though. Imagine, no country. No religion too.
Imagine all the people... Ah, never mind.

Re: ok - dollar and foreign funds

TK Sung wrote:
> "David Wilkinson" <> wrote in message
> news:df4uae$gfi$
>
>>And then you get to US customs and have to have these special passports
>>with your fingerprints, iris pattern, print out of your genetic code and
>>a signed letter from OBL saying you are not now and have never been a
>>member of his organisation. :-)
>>
>
> Nothing that EAU can't solve though. Imagine, no country. No religion too.
> Imagine all the people... Ah, never mind.
>
>
Who or what is EAU?

WATER?

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df640a$piu$
>
> Who or what is EAU?
>
US of E and A, all under Bush.

Re: ok - dollar and foreign funds

TK Sung wrote:
> "David Wilkinson" <> wrote in message
> news:df640a$piu$
>
>>Who or what is EAU?
>>
>
> US of E and A, all under Bush.
>
>
I would not put any money on that!

The last time Bush came to England, his closest ally supposedly, he had
2,000 armed guards with him constantly and still did not dare set foot
out of doors once. When he wanted to go from one building to another he
used an American limo with 5-inch thick armour plate all over it, which
was specially flown in by him. And the police had to weld down all the
manhole covers on the routes he traveled. And, of course, the police and
guards had to clear the streets of demonstrators against his actions
attacking Iraq before his armoured convoy dared set out. The only people
he actually met were either politicians who had to do as they were told
or specially selected and screened Blair supporters who would not rock
the boat by heckling him.

Of course he was right in judging that as the most hated man in the
world he would not dare appear in public. There is little doubt he is
even more unpopular, if that is possible, in France and Germany, should
he ever dare to go there.

What was that line from Shakespeare's Richard 11? Something like "Uneasy
lies the head that wears the crown" I would be surprised if Bush gets
any sleep at all.

Re: ok - dollar and foreign funds

David

I am no fan of GWB. But the security in countries over here is simply
a reflection of the nature of the sort of people who would try to kill
him -- suicide terrorists and mental cases.

Even a more 'liberal' US president would have to have the same
security, now. Clinton was famous for the number of attacks he
dodged: there were Serbian plots, there was the guy who dove his plane
into the White House, there was the guy who fired shots at the White
House. The President is such a symbol of US power and position that
killing him would be a huge propaganda coup-- this would be as true of
Al Quaida killing a president Kerry or (Hilary) Clinton as it is of
GWB. It would be a statement against the USA and the West, not against
GWB per se.

D.

GWB has lots of domestic issues to make him rest uneasy: Plamegate
(Rovegate), Iraq and now this hurricane response debacle.

Re: ok - dollar and foreign funds

darkness39 wrote:
> David
>
> I am no fan of GWB. But the security in countries over here is simply
> a reflection of the nature of the sort of people who would try to kill
> him -- suicide terrorists and mental cases.
>
> Even a more 'liberal' US president would have to have the same
> security, now. Clinton was famous for the number of attacks he
> dodged: there were Serbian plots, there was the guy who dove his plane
> into the White House, there was the guy who fired shots at the White
> House. The President is such a symbol of US power and position that
> killing him would be a huge propaganda coup-- this would be as true of
> Al Quaida killing a president Kerry or (Hilary) Clinton as it is of
> GWB. It would be a statement against the USA and the West, not against
> GWB per se.
>
> D.
>
> GWB has lots of domestic issues to make him rest uneasy: Plamegate
> (Rovegate), Iraq and now this hurricane response debacle.
>
While there is something in what you say about security I am fairly sure
that when Clinton came over to London a couple of times he walked around
in the open shaking hands with the crowd and chatting to them. Of course
there were security men close to him all the time but he was not
imprisoned in an armour-plated steel box with bullet-proof windows. He
was no saint but he was likable and human and popular and America was
seen as generally a good thing.

How things have changed in a few years.

Re: ok - dollar and foreign funds

"David Wilkinson" <> wrote in message
news:df7hc5$92p$
>
> What was that line from Shakespeare's Richard 11? Something like "Uneasy
> lies the head that wears the crown" I would be surprised if Bush gets
> any sleep at all.
>
Bush is well known to sleep for 9 hours a day. Maybe his faith is allowing
him to sleep in peace while countless lives are paying with their lives for
his grand delusion. I wonder what faith he'll resort to for this one down
in New Orleans. I don't think he can claim almighty's gift to humanity,
this time.

Re: ok - dollar and foreign funds

"TK Sung" <> wrote in message
news:gJ1Se.1221$
>
> "David Wilkinson" <> wrote in message
> news:df7hc5$92p$
> >
> > What was that line from Shakespeare's Richard 11? Something like "Uneasy
> > lies the head that wears the crown" I would be surprised if Bush gets
> > any sleep at all.
> >
> Bush is well known to sleep for 9 hours a day. Maybe his faith is
allowing
> him to sleep in peace while countless lives are paying with their lives
for
> his grand delusion. I wonder what faith he'll resort to for this one down
> in New Orleans. I don't think he can claim almighty's gift to humanity,
> this time.

I'm pretty sure he's asleep during most of his speeches.

-herb

Re: ok - dollar and foreign funds

Fewer bad decisions are made by people who sleep a solid 9 hours, stay
fit, etc. In this Bush is a good role model.

Contrast to Carter, who was a decent and intelligent man, but wore
himself out on the micro decisions.

The (relevant) concerns about Bush are that:

- he appears to lack a degree of empathy, particularly with the
unfortunate

- he doesn't appear to be intellectually curious: he doesn't challenge
the recommendations and assumptions put to him by his advisers

Re: ok - dollar and foreign funds

However there had been no suicide attacks (except in South Lebanon) in
the Middle East when Clinton was president. They are now omnipresent.

Re: ok - dollar and foreign funds

Is Jerusalem in Lebanon?


For a bunch more:




"darkness39" <> wrote in message
news:
> However there had been no suicide attacks (except in South Lebanon) in
> the Middle East when Clinton was president. They are now omnipresent.
>

Re: ok - dollar and foreign funds

"darkness39" <> wrote in message
news:
> Fewer bad decisions are made by people who sleep a solid 9 hours, stay
> fit, etc. In this Bush is a good role model.
>
Dumb asses can sleep 23 hours, and it won't make them one bit smarter. And
I'm still waiting for Bush to make one good decision.

Re: ok - dollar and foreign funds

"TK Sung" <> wrote in message
news:gJ1Se.1221$
>
> I don't think he can claim almighty's gift to humanity,
> this time.
>
Well, looks like they are now recycling the same old 9/11 rhetoric by Karen
Hughes. I've just heard them saying they'll move heaven and earth, again.
Perhaps they meant they'll move it back to where it was before they
paralyzed FEMA. Expect Condie to repeat it when she gets to Alabama.

Re: ok - dollar and foreign funds

Fair point. I don't remember when the first suicide attack in Israel
was?

The book you want to read is 'Dying to Win, the strategic logic of
suicide terrorism' by Robert Pape.

Re: ok - dollar and foreign funds

But if you look at spectacularly bad periods of decision making (Eden
in Suez in 1956, Carter re Iran, LBJ and Macnamara re Vietnam) you see
otherwise very capable people who were working themselves to death
(literally so in Eden's case: he died a broken man).

Re: ok - dollar and foreign funds

"darkness39" <> wrote in message
news:
> Fair point. I don't remember when the first suicide attack in Israel
> was?
>
> The book you want to read is 'Dying to Win, the strategic logic of
> suicide terrorism' by Robert Pape.

Many of these people are just young men and women. I often wondered which
was the strongest motivator for them, hate, or their cause. Maybe they are
one and the same but still, I'll never understand how they find so many
willing to die.

Re: ok - dollar and foreign funds

Ed wrote:
> "darkness39" <> wrote in message
> news:
>
>>Fair point. I don't remember when the first suicide attack in Israel
>>was?
>>
>>The book you want to read is 'Dying to Win, the strategic logic of
>>suicide terrorism' by Robert Pape.
>
>
> Many of these people are just young men and women. I often wondered which
> was the strongest motivator for them, hate, or their cause. Maybe they are
> one and the same but still, I'll never understand how they find so many
> willing to die.
>
>
A Google search gave, among others:

The Islamist View

The basis for the Islamist view - which is not supported by the majority
of moderate Muslims - is that the individual undertaking a suicide
bombing (the term they commonly use is "martyrdom operation") is doing
what that individual understands is his/her Islamic duty, and thus
regards their own life, in this world, as but a stage, a path, toward
the next, and eternal, life. These radical schools of Islam teach that
such a "martyrdom operation" may result in them be rewarded, by Allah,
with Paradise (Jannah) and rewards such as 72 virgins in the afterlife;
they derive the latter from an interpretation of the Qur'an An-Naba
78:31-34, and the hadith Sunan al-Tirmidhi 2687.[10]
() That is, they are willing to
sacrifice their own life in the hope of becoming a Shaheed, a martyr.

Furthermore, it has been argued by Islamist militant organisations
(including Al Quaida, Hamas and Islamic Jihad) that martyrdom operations
are justified according to Islamic law, despite Islam strictly
prohibiting suicide and murder.[11]
() [12]

Re: ok - dollar and foreign funds

"darkness39" <> wrote in message
news:
> But if you look at spectacularly bad periods of decision making (Eden
> in Suez in 1956, Carter re Iran, LBJ and Macnamara re Vietnam) you see
> otherwise very capable people who were working themselves to death
> (literally so in Eden's case: he died a broken man).
>
So I suppose it's better to sleep through than stay awake at night worrying
about problems of your own making. Not much a roll model, if you ask me.
Though Bush's probably working hard in his sleeps, like his working
vacations.