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Value of the American Dollar?

Discussion in 'The Economy' started by Chomp, 27th Oct, 2008.

  1. Chomp

    Chomp Well-Known Member

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    Someone posted this question on Business Spectator and I was wondering the same thing, can anyone explain this?

    "I may be dense, but can someone tell me why the deeper the US sink into the economic mire, the stronger the US dollar gets?"

    Chomp

    I tried deleting this, because I think this is covered in the post "The Dollar" by Benny please ignor or reply if you think not!
     
    Last edited by a moderator: 27th Oct, 2008
  2. Tim

    Tim Well-Known Member

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    Yes I am wondering this to - the US has a rising dollar and cheap oil - that has to be good for someone or something.......:cool:

    The only rationale I have heard just didn't make sense, that the contagion was now impacting Europe etc so the dollar was seen as stronger.....??? What???

    If I was a conspiracy theorist I would be even further intigued.

    Tim
     
  3. shasta

    shasta Member

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    Isnt the USD popular now because its a reserve currency - people are looking for a safe spot to put their $$, but they also want liquidity (so they can pounce on another investment when the time is right). The US gov bonds are the most liquid market, so people flock to it, and in the process they need to buy USD?
     
  4. AsxBroker

    AsxBroker Well-Known Member

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    Spot on Shasta :)
     
  5. try anything once

    try anything once Well-Known Member

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    So USD are a parking bay?? That sounds very temporary?

    Perhaps a USD margin loan to buy an ASX200 ETF might be in order?
     
  6. bennymarsh

    bennymarsh Well-Known Member

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    I was reading yesterday that many of the Asian and middle east nations are stock piling US dollars instead of directly investing into the US because of the uncertainty of getting their money back, so basically what everyone has been saying is correct.