US dollar

[Ecomike]

We still had silver certificates up until a few years ago, I got a bunch of them put away somewhere.

They did away with them about 30-35 years ago, IIRC. They are collectors items now. I think Nixon killed them in my teenage years, when he killed the last vestiges of the gold standard/dollar relationship, in order to help continue financing the Vietnam war. Looks like 1968 was when they were devalued and no longer issued, and 1957 was the last year they were issued:

http://en.wikipedia.org/wiki/Silver_Certificate

Lot of intersting US money history on that link.

Also I think 1963 (? or 64?) was the last year silver was used in US coins. Since then they have been nickel plated copper. (fiat coins, LOL)

I have a few of the silver certificates. I also have some very interesting, and odd red ink (not green ink) Federal reserve notes from WWII that my father left me. Special Hawaii currency, used in Hawaii only during WWII. It was to be devalued to 0 if Hawaii fell to Japan.

Found this on the WIKI link above:

"In March 1964, Secretary of the Treasury C. Douglas Dillon halted redemption of Silver Certificates for Silver Dollars. In the 1970s, large numbers of the remaining silver dollars in the mint vaults were sold to the collecting public for collector value. All redemption in silver ceased on June 24, 1968. Paper currency is still valid legal tender without the Silver Certificate, instead being backed simply by the perceived strength of the U.S. economy. According to the U.S. treasury, "The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are 'backed' by all the goods and services in the economy."

 

[XJEEPER]

Hate to say that this was predicted....... are you ready for hyper-inflation?

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

http://www.shanghaidaily.com/article/print.asp?id=423054

 

[Ecomike]

I would not count on hyperinflation anytime soon. The dollar is steadily going back up right now in a second flight to safety wave, commodities are already dropping, and will continue to drop into early next year, and stocks are about to do a bear market drop again. I would not bet on inflation right now. Smart money is moving quitely back into cash, US dollars again right now. The US, and some foreign stock markets have been giving off a number of scary warning signs the last 4-8 weeks indicating we are going down again soon (stocks and commodities, such as gold, oil, ...), and the money is moving into short term, near zero yield Treasuries again.

http://www.moneyandmarkets.com/what-could-lift-the-dollar-36838

http://ewtrendsandcharts.blogspot.com/

Hate to say that this was predicted....... are you ready for hyper-inflation?

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

http://www.shanghaidaily.com/article/print.asp?id=423054

 

[Ecomike]

If I read that article right, it says US consumers are spending less on China products, so China has fewer dollars to invest in US Treasuries as a result. US is saving more, instead of spending it, so US savers and US banks will end up buying the excess US treasuries from increased US savings instead of China buying it all. Also, the Central bank of Japan has started buying net US Treasuries on balance for the first time in over 20 years, to keep the Yen from appreciating further in relation to the dollar, and the Euro is dropping in relation to the dollar now due to recent sovereign debt downgrades in Europe (Greece), both which have been pushing the dollar back up the last 1-2 weeks. Have you noticed the large drop in oil and gold prices the last 2 weeks? Gold down $120, oil down $13 at one point mid week, last week.

Hate to say that this was predicted....... are you ready for hyper-inflation?

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

http://www.shanghaidaily.com/article/print.asp?id=423054

 

[XJEEPER]

I hope your predictions are accurate. I'd love nothing more than to see our economy turn around.

The current rate of spending is unsustainable, so if there aren't some dramatic changes, hyper-inflation is not an if, but a when...........

 

[Ecomike]

I hope your predictions are accurate. I'd love nothing more than to see our economy turn around.

The current rate of spending is unsustainable, so if there aren't some dramatic changes, hyper-inflation is not an if, but a when...........

Unfortunately it looks like the recovery may stall the next 3-6 months at best (or worse head down and crash again, from which we might not recover), at least as far as the stock markets, and banks are concerned, from what I am reading and seeing in the stock market "Tea Leaf" readings the last few weeks. And if you follow stock market theory, as goes the stock market, so goes the economy (eventually). The dollar will do OK for now, and rebound, but the jobs picture may not move down the way many of us have hoped for a while. I hope they are wrong, but long story short is it looks like the stock market rally has stalled and is about to fall (or correct), which will do the jobs picture no good at all. Right now it is not hyperinflation we should be worried about, but job losses and deflation, short term. If we pull out of this mess, then in 3-4 years we will need to deal with inflation again, and government overspending, no doubt about it.

Earnings reports in late January and early February will settle the fate for the next year, and fate of the rally (as in, is it a bear market rally, or a new bull market, at the moment it could be either, so there is still some hope). I hope earnings come in with a nice positive surprise, or most of us (not just some of us) will be forked for sure, as the market will head south again, and jobs picture will just get worse.

 

[kastein]

Unfortunately it looks like the recovery may stall the next 3-6 months at best (or worse head down and crash again, from which we might not recover), at least as far as the stock markets, and banks are concerned, from what I am reading and seeing in the stock market "Tea Leaf" readings the last few weeks. And if you follow stock market theory, as goes the stock market, so goes the economy (eventually). The dollar will do OK for now, and rebound, but the jobs picture may not move down the way many of us have hoped for a while. I hope they are wrong, but long story short is it looks like the stock market rally has stalled and is about to fall (or correct), which will do the jobs picture no good at all. Right now it is not hyperinflation we should be worried about, but job losses and deflation, short term. If we pull out of this mess, then in 3-4 years we will need to deal with inflation again, and government overspending, no doubt about it.

Earnings reports in late January and early February will settle the fate for the next year, and fate of the rally (as in, is it a bear market rally, or a new bull market, at the moment it could be either, so there is still some hope). I hope earnings come in with a nice positive surprise, or most of us (not just some of us) will be forked for sure, as the market will head south again, and jobs picture will just get worse.

I think I've been saying that was going to happen since about... oh... April or so. Not happy that people are starting to agree, because it sucks, but hey, at least I get to say I was right all along :dunno:

 

[Ecomike]

I think I've been saying that was going to happen since about... oh... April or so. Not happy that people are starting to agree, because it sucks, but hey, at least I get to say I was right all along :dunno:

We got good news today that existing home sales were up 10%. Dollar is still rising, gold dropping.

 

[Ecomike]

Interesting read on the recently rising dollar, and recent history of FED liquidity practice of dollar swaps with foreign central banks, which is now ending (was started late in 2008).

http://www.moneyandmarkets.com/feds-currency-swap-lines-a-big-deal-for-the-dollar-37555

 

[RichP]

Interesting read on the recently rising dollar, and recent history of FED liquidity practice of dollar swaps with foreign central banks, which is now ending (was started late in 2008).

http://www.moneyandmarkets.com/feds-currency-swap-lines-a-big-deal-for-the-dollar-37555

Keep an eye on the major corporations that are incorporating in Ireland and S Korea and moving lock stock and barrel out of the US.
I noticed a list of some biggies that are moving to Ireland I've been trying to refind it for a while now, Ingersol-rand was one as well as two aircraft companies.

 

[Ecomike]

Hmm. seems the Euro is in deep shiat now, and the dollar is up nearly 20% off its 52 week lows since we last discussed the US dollar. As I recall the news and panic at the time was that the dollar was about to become worthless. :laugh:

 

[goodburbon]

Believe that everything is peaches and cream because the dollar, a fiat currency, is up against another Fiat currency (another fiat currency who is tied to countries with debt problems worse than ours). The overall value of the dollar is falling Mike. I certainly can not buy 20% more goods than I could on the 52 week lows. As a matter of fact I can't buy nearly as much because the price of gasoline has doubled since then. Are you even paying attention to the facts? I'm Not talking about the bullshit numbers that some agency reports, I'm talking about the facts of your life as they relate to the purchasing power of your dollars.

 

[kastein]

Agreed... the only thing that has been going down recently is price of parts at the junkyard.

Milk is double what it was when I left for college 6 years ago. Gas is nearly triple what it was when I went into high school 10 years ago. Candy bars in the vending machine are double what they were. A pack of 5 resistors at Radio Shack now costs me double to triple the prices I remember...

 

[Boatwrench]

Candy bars in the vending machine are double what they were. ...

and smaller too

 

[Ecomike]

Agreed... the only thing that has been going down recently is price of parts at the junkyard.

Milk is double what it was when I left for college 6 years ago. Gas is nearly triple what it was when I went into high school 10 years ago. Candy bars in the vending machine are double what they were. A pack of 5 resistors at Radio Shack now costs me double to triple the prices I remember...

Milk here in Houston is, and has been for nearly a year now, 1/2 of what it was in 2007 to 2008.

I bought a new 17" laptop three months ago for $349, that if I bought it 2-3 years ago would have been $2000 to $4000. Electric rates here the last 12 months have been 1/3 of what they were in the first half of 2008.

The Iphone and Droid did not even exist 24 months ago at any price, about $600 when it came out (Iphone), now it is about $100.

Gasoline here is about 60% of what it was in 2007-08.

I can paint a price picture to back up my claims too. The point I was trying to make is the dollar has been climbing for about 4 months now, and has been climbing even faster lately with the Euro / Greece panic building up.

Oil has fallen nearly 10% from its recent highs (near $87) in the last 7 days!!!!! Even at $87, oil is still about 60% of its all time highs in 2008.

 

[Ecomike]

Believe that everything is peaches and cream because the dollar, a fiat currency, is up against another Fiat currency (another fiat currency who is tied to countries with debt problems worse than ours). The overall value of the dollar is falling Mike. I certainly can not buy 20% more goods than I could on the 52 week lows. As a matter of fact I can't buy nearly as much because the price of gasoline has doubled since then. Are you even paying attention to the facts? I'm Not talking about the bullshit numbers that some agency reports, I'm talking about the facts of your life as they relate to the purchasing power of your dollars.

I am not saying everything is peaches and cream, I am saying the sky is not falling as some have tried to say before.

 

[kastein]

You've got a point on oil and other energy prices, but as someone in the electrical engineering field, the laptop/consumer electronics price comparisons don't really hold much water with me :spin1: For a given level of performance, electronics always get cheaper over time. I paid $210 for 2GB of DDR2 SDRAM (4 512MB sticks, Patriot brand) in fall 2006; I paid just $110 for 8GB of DDR3 SDRAM (4 2GB sticks, Patriot/Kingston/Crucial brand, I forget) in fall 2009. The last big price war early in the last decade resulted in my dad paying $24 for just 512MB of SDR SDRAM, a killer price that wasn't duplicated for years after that.

Moore's law has not been broken in ~30 years, only badly stretched, and will likely continue for another decade or two at the very least, even though people have been hailing its death since the late 70s.

Milk is down about a dollar or two a gallon here from its high - $4.89, as I recall. It's presently $2.89... but I distinctly remember seeing $1.29/gallon.

I guess what I'm saying is that inflation continues, other countries are just inflating faster.

 

[XJEEPER]

Saturday, May 5, 2007 12:50 a.m. MDT

Gasoline prices in Utah already are averaging more than $3 a gallon. On Friday, Utah gas prices hit $3.05, the highest recorded average for the state and four cents higher than the national average of $3.01, according to AAA.

Fast forward 2 years..........





(Salt Lake City, UT) - Average retail gasoline prices in Utah have risen 0.8 cents per gallon in the past week, averaging $3.08/g on Sunday May 2, 2010.
This compares to the national average has increased 4.1 cents per gallon in the last week to $2.90/g, according to the Pump Patrol Report at GasBuddy.com.

The change in gas prices in Utah during the past week was $1.01/g higher than the same day one year ago and 13.4 cents per gallon higher than a month ago.
The national average increased 7.9 cents per gallon during the last month and stands at 84.3 cents per gallon higher than this day a year ago.

 

[Boatwrench]

Uh-Oh. My stocks fell a whole bunch in the last hour...

 

[Ecomike]

Uh-Oh. My stocks fell a whole bunch in the last hour...

I got lucky today, or bought the right stocks, only lost 1% today. The markets dropped 10% late today, most of the drop in 60 seconds from what I just read.

Dollar is near the 2008 and 2009 highs as of the close today, money ran to the bond and treasuries, and dollar. Oil is down $10 a barrel in just 3 days now.