Weakness in the $

Answers to your qestions about moving to, and living in, Peru,
woodchuck
Gold Member
Gold Member
Posts: 598
Joined: Wed Mar 09, 2016 1:43 pm

Weakness in the $

Postby woodchuck » Mon Apr 04, 2016 8:29 am

Anyone have any thoughts why the $ has been declining against the sole for the last few weeks?
Does this have anything to do with economics in the US/ Europe or the soon-2-be elections here in Peru?
Thanks :roll:


User avatar
gringolandia
Gold Member
Gold Member
Posts: 309
Joined: Mon Jan 07, 2013 5:34 pm

Re: Weakness in the $

Postby gringolandia » Mon Apr 04, 2016 10:08 am

woodchuck wrote:Anyone have any thoughts why the $ has been declining against the sole for the last few weeks?
Does this have anything to do with economics in the US/ Europe or the soon-2-be elections here in Peru?
Thanks :roll:


It is because it now appears that the Fed will not be able to continue raising interest rates in the US as they had planned (though of course the Fed could try to surprise everyone and do it anyway, though really the Fed usually follows rather than leads the market).

When it looked like interest rates were going to rise, money started flowing back to the US. But now that appears to be on hold due to questionable strength of the US and world economies.
tjmccurdy
Member
Member
Posts: 17
Joined: Tue Apr 05, 2016 11:04 am

Re: Weakness in the $

Postby tjmccurdy » Tue Apr 05, 2016 11:32 am

Peru has always been a part of the countries that are pegged to the dollar (via the Bretton Woods agreement). They exchange can never go below 2.5. Gringolandia is correct, and the only reason why the dollar keeps slightly surging is your seeing worldwide sell-off of silver and gold contracts to bring the dollar back up in value - slowly people are realizing that if they don't get out of their gold contracts, they'll lose because there are 250 claims per 1oz of gold - there's going to be a massive loss of investments soon. Supposedly this might happen later this year, but who knows. Last I heard there was supposed to be a sharp decline in March, but I heard that around Nov/Dec 2015. There's probably many factors, but this seems to be a major one.
User avatar
gringolandia
Gold Member
Gold Member
Posts: 309
Joined: Mon Jan 07, 2013 5:34 pm

Re: Weakness in the $

Postby gringolandia » Tue Apr 05, 2016 11:45 pm

I'm not going to comment too much on gold as that's more of a religious debate (ie, some people believe gold to be the only true "money" in a world of fiat currencies, and others consider it just another physical resource but with less practical value than most (silver, incidentally, having far more industrial uses)). In the short term It is true that gold is trending down at the moment. In the medium term it is still 15% higher than it was in January. And in the longer term, it is much lower than it was in 2012. I'll leave speculating on what all that means to someone else who follows gold more closely.

I'd say that the primary reason the dollar continues to remain somewhat strong even as the economic outlook appears to be deteriorating somewhat is that the US is still doing better than most of the rest of the world. Or to put it another way, even if the US is in trouble, the rest of the world is in even worse trouble.
Sergio Bernales
Gold Member
Gold Member
Posts: 925
Joined: Fri May 25, 2012 4:41 pm

Re: Weakness in the $

Postby Sergio Bernales » Wed Apr 06, 2016 2:54 am

tjmccurdy wrote:Peru has always been a part of the countries that are pegged to the dollar (via the Bretton Woods agreement). They exchange can never go below 2.5. Gringolandia is correct, and the only reason why the dollar keeps slightly surging is your seeing worldwide sell-off of silver and gold contracts to bring the dollar back up in value - slowly people are realizing that if they don't get out of their gold contracts, they'll lose because there are 250 claims per 1oz of gold - there's going to be a massive loss of investments soon. Supposedly this might happen later this year, but who knows. Last I heard there was supposed to be a sharp decline in March, but I heard that around Nov/Dec 2015. There's probably many factors, but this seems to be a major one.


Did I fall through a wormhole and end up in the future?

https://history.state.gov/milestones/19 ... ixon-shock
tjmccurdy
Member
Member
Posts: 17
Joined: Tue Apr 05, 2016 11:04 am

Re: Weakness in the $

Postby tjmccurdy » Wed Apr 06, 2016 12:28 pm

If I remember correctly, what came out of that "experiment" was that they learned they could get away with "price fixing". Soon after, they got off the Gold Standard and what you see today is the Dollar is backed by petroleum - hence the "petro-dollar" wars that you see going on all over the world. They assassinated Kadafi because he was created a new monetary system for all of Africa which would rid them of having to buy petroleum in dollars (why do you think Peru's gas prices are so high?). But what really sealed the deal for Kadafi/Gaddafi was when he told China and Iran they could buy petro from them in their own currencies. Soon after, some made up crap about terrorism and *bam* no more Kadafi.
User avatar
gringolandia
Gold Member
Gold Member
Posts: 309
Joined: Mon Jan 07, 2013 5:34 pm

Re: Weakness in the $

Postby gringolandia » Wed Apr 06, 2016 3:45 pm

tjmccurdy wrote:If I remember correctly, what came out of that "experiment" was that they learned they could get away with "price fixing". Soon after, they got off the Gold Standard and what you see today is the Dollar is backed by petroleum - hence the "petro-dollar" wars that you see going on all over the world. They assassinated Kadafi because he was created a new monetary system for all of Africa which would rid them of having to buy petroleum in dollars (why do you think Peru's gas prices are so high?). But what really sealed the deal for Kadafi/Gaddafi was when he told China and Iran they could buy petro from them in their own currencies. Soon after, some made up crap about terrorism and *bam* no more Kadafi.


That's interesting story, but as a fiat currency the dollar is backed by nothing more than the "full faith and credit of the United States".

You cannot take a dollar to a Federal bank and have it exchanged for a specified quantity of oil that is held in reserve by the United States.

That there are political and currency value implications related to petroleum is obvious to everyone. But to say "the dollar is backed by petroleum" is wildly incorrect.

Obviously the Qaddafi story is just conspiracy minded speculation so I won't comment on that.
tjmccurdy
Member
Member
Posts: 17
Joined: Tue Apr 05, 2016 11:04 am

Re: Weakness in the $

Postby tjmccurdy » Wed Apr 06, 2016 7:20 pm

The "Kadafi thing" was not a conspiracy (just one of many articles):
http://levantreport.com/2016/01/04/new-hillary-emails-reveal-propaganda-executions-coveting-libyan-oil-and-gold/

But sure, all commercial paper is backed by "the good faith and credit of the people", that's why I laugh as cashiers hold up paper money in front of them, inspecting it as if they are trained counterfeit agents. I think Thomas Edison and Henry Ford said it best:

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. - Henry Ford

http://prosperityuk.com/2000/09/thomas-edison-on-government-created-debt-free-money/

Sorry for bringing this off-topic...
User avatar
gringolandia
Gold Member
Gold Member
Posts: 309
Joined: Mon Jan 07, 2013 5:34 pm

Re: Weakness in the $

Postby gringolandia » Thu Apr 07, 2016 2:59 am

Commercial paper is short term debt issued by corporations, not fiat currency.

With regard to oil and gold, the article you referenced relates to the interests of France as perceived by US analysts, and is, as you say, highly off topic.

Return to “Expat Information”

Login  •  Register