IMF calls for dollar alternative

  • Posted by a hidden member.
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    Feb 11, 2011 8:09 PM GMT
    http://money.cnn.com/2011/02/10/markets/dollar/index.htm

    Hopefully this will not be Obama's enduring legacy.
  • rnch

    Posts: 11524

    Feb 11, 2011 8:26 PM GMT
    perhaps the USA should withdraw ALL Foreign Aid and let these troublesome "bite-the-hand-that-feeds-them" countries take care of their own economic and political isuues?
  • tongun18

    Posts: 593

    Feb 11, 2011 8:38 PM GMT
    If the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.
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    Feb 11, 2011 8:40 PM GMT
    My mom (who is well versed in forex) tells me that the dollar-euro ratio was actually lowest around late 2008, and has since fluctuated above 0.7. Ditto for the dollar index (lowest around first half of 2008 ) and has been between 0.75 to 0.9 since.

    We actually chose to travel more in Europe since 2009 since the dollar is stronger compared to 2008. Thank god we didn't choose Egypt for vacation this time.

  • rnch

    Posts: 11524

    Feb 11, 2011 8:45 PM GMT
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    the quickest and easiest way to "get our debt under control" would be to end all Foreign Aid and withdraw from any/all foreign wars.

    taxpayer dollars are best spent inside the borders of our own country!
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    Feb 11, 2011 9:00 PM GMT
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    That's more a budget issue, not a fed issue.

    And Q - the issue isn't so much that the dollar is losing its value - because it is and anticipated to do so faster relative to foreign currencies especially as the US national debt grows - especially with the massive unfunded pension liabilities. Europe is also under a similar pressure so it's not useful to use it as a point of comparison:

    z?s=EURUSD%3dX&t=5y&q=&l=&z=l&p=s&a=v&p=

    http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1297457682837&chddm=2581089&q=CURRENCY:EURUSD&ntsp=0

    I personally suspect that the Euro could break - and it should. The argument as to why the US shouldn't be the reserve currency is because of the risk and volatility. A reserve currency should be stable and liquid.
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    Feb 11, 2011 9:01 PM GMT
    rnch said
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    the quickest and easiest way to "get our debt under control" would be to end all Foreign Aid and withdraw from any/all foreign wars.

    taxpayer dollars are best spent inside the borders of our own country!


    Foreign aid isn't that significant - but yes they should do that too. One of the biggest things they could do immediately that would help consumers and developing countries more would be to immediately stop farm subsidies and lower trade barriers.
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    Feb 11, 2011 9:10 PM GMT
    Well, I know the euro is having problems too. But the dollar index includes other currencies:
    * Euro (EUR), 57.6% weight
    * Pound sterling (GBP), 11.9% weight
    * Canadian dollar (CAD), 9.1% weight
    * Swedish krona (SEK), 4.2% weight and
    * Swiss franc (CHF) 3.6% weight.
    * Japanese Yen (JPY) 13.6% weight.

    They should update this and include the yuan.
  • tongun18

    Posts: 593

    Feb 11, 2011 9:18 PM GMT
    riddler78 said
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    That's more a budget issue, not a fed issue.



    When the Fed trashes the dollar it pisses off countries like China, Russia and even Germany and France, it pushes them to further explore the possibility of removing the dollar as the reserve currency.

    Our debt levels and economy have an effect on the stability of the dollar. The more unstable it becomes the more others push to remove it as the reserve currency.

    Those were the points I was trying to make.
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    Feb 11, 2011 9:26 PM GMT
    tongun18 said
    riddler78 said
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    That's more a budget issue, not a fed issue.



    When the Fed trashes the dollar it pisses off countries like China, Russia and even Germany and France, it pushes them to further explore the possibility of removing the dollar as the reserve currency.

    Our debt levels and economy have an effect on the stability of the dollar. The more unstable it becomes the more others push to remove it as the reserve currency.

    Those were the points I was trying to make.


    Yes but those are fiscal not monetary issues. It's the US Government/Treasury and associated spending, and not the Fed that has to issue the debt. Russia and China, Europe are concerned (not because of their own issues) but because US debt continues to spiral - possibly out of control. Meanwhile look at the costs estimated with new entitlement programs that remain unfunded - like medicare, healthcare "reform", government defined pensions, social security...
  • Posted by a hidden member.
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    Feb 11, 2011 9:29 PM GMT
    The ACA is fully funded until it's defunded.
    Unlike certain additions to Medicare. icon_lol.gif
  • tongun18

    Posts: 593

    Feb 11, 2011 9:41 PM GMT
    riddler78 said

    Yes but those are fiscal not monetary issues. It's the US Government/Treasury and associated spending, and not the Fed that has to issue the debt. Russia and China, Europe are concerned (not because of their own issues) but because US debt continues to spiral - possibly out of control. Meanwhile look at the costs estimated with new entitlement programs that remain unfunded - like medicare, healthcare "reform", government defined pensions, social security...


    Wait... quantitative easing isn't a monetary issue?

    To be clear, I do not disagree with you but why are you dismissive of the Feds role in this?
  • SoBeCamera

    Posts: 74

    Feb 11, 2011 10:19 PM GMT
    riddler78 said
    tongun18 said
    riddler78 said
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    That's more a budget issue, not a fed issue.



    When the Fed trashes the dollar it pisses off countries like China, Russia and even Germany and France, it pushes them to further explore the possibility of removing the dollar as the reserve currency.

    Our debt levels and economy have an effect on the stability of the dollar. The more unstable it becomes the more others push to remove it as the reserve currency.

    Those were the points I was trying to make.


    Yes but those are fiscal not monetary issues. It's the US Government/Treasury and associated spending, and not the Fed that has to issue the debt. Russia and China, Europe are concerned (not because of their own issues) but because US debt continues to spiral - possibly out of control. Meanwhile look at the costs estimated with new entitlement programs that remain unfunded - like medicare, healthcare "reform", government defined pensions, social security...


    why you dont suggest to cut the military and defense budget? why you always bitching about the health care reform? compare all unfunded government programs to the military budget and maybe you will be able to see the answer for all your negativity...sometimes its that simple...icon_smile.gif
  • conservativej...

    Posts: 2465

    Feb 11, 2011 10:21 PM GMT
    The time is coming riddler when the dollar will be replaced as the global reserve currency. That time is closer than many believe. Most large multi-national corporations are in effect not using the dollar as a reserve currency in their global operations, yours truly included.

    I think we will see a monetization of the SDR in a derived form. The IMF itself, a gold rich entity, does not hold enough gold to single handedly back a global reserve currency. They simply could not generate enough cash by converting to support the global economy in crisis. (Not that America can today. This is a major fear. If you want to discuss this e-mail me and I'll relate what occurred during the last two years for me personally.)

    Some have suggested that the new reserve currency be based upon a fairly tight range of commodities, with a countries energy reserves for instance being an backing element. Oil, coal, etc. would be converted to a BTU equivalent and the local currency would use its "apparent" value not unlike the U.S, used gold at one time.

    All of this was a hot topic a few weeks ago in due Schweiz. Stay tuned..

    Many on RJ should cheer the fact that the U.S. is in effect "taxing" the global economy with heavy borrowing using the reserve currency, i.e., the dollar. It is very obvious that global players together can surmount enough pressure to prevent this. In my opinion as the global economy improves (Europe must stabilize and it is pretty damn obvious there too that they intend on just that happening) we move closer to a changeover of reserve currency to something new.


  • conservativej...

    Posts: 2465

    Feb 11, 2011 10:22 PM GMT
    SoBeCamera said
    riddler78 said
    tongun18 said
    riddler78 said
    tongun18 saidIf the Fed keeps trashing the dollar it will be. Russia and China have long been pushing for a dollar alternative. The two now conduct bilateral trade in their respective currencies, they no longer use the dollar. If we can't get our debt under control and strengthen the economy/dollar a bit I don't think it'll be too long before we see the dollar replaced as the worlds reserve currency.


    That's more a budget issue, not a fed issue.



    When the Fed trashes the dollar it pisses off countries like China, Russia and even Germany and France, it pushes them to further explore the possibility of removing the dollar as the reserve currency.

    Our debt levels and economy have an effect on the stability of the dollar. The more unstable it becomes the more others push to remove it as the reserve currency.

    Those were the points I was trying to make.


    Yes but those are fiscal not monetary issues. It's the US Government/Treasury and associated spending, and not the Fed that has to issue the debt. Russia and China, Europe are concerned (not because of their own issues) but because US debt continues to spiral - possibly out of control. Meanwhile look at the costs estimated with new entitlement programs that remain unfunded - like medicare, healthcare "reform", government defined pensions, social security...


    why you dont suggest to cut the military and defense budget? why you always bitching about the health care reform? compare all unfunded government programs to the military budget and maybe you will be able to see the answer for all your negativity...sometimes its that simple...icon_smile.gif


    The defense budget will come down. Watch America pull further apart economically and see what happens.