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Weak dollar costs U.S. economy its No. 1 spot

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Thirdshifter
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  #1 Old 16-03-2008 Default Weak dollar costs U.S. economy its No. 1 spot

"Weak dollar costs U.S. economy its No. 1 spot"
http://www.reuters.com/article/newsO...91971920080314

The comparison of the United States to the Euro Zone is a bit distorted because it is comparing a group of countries to a single one. The article also applies the current (Mar. 14, 2008 ) conversion rate between the dollar and euro to the GDP for 2007. Playing with statistics can produce bogus conclusions. What will the comparison between GDP's be in 2008?


However, in another way it's combining a part of an economy to a whole economy. The "Eurozone" is only a part of a larger single market, which is far more comprehensive than NAFTA - the only difference is that the other countries in the EEA have their own currencies/interest rates, but to all intents and purposes they are one economy (there is more of a single market between eurozone countries than between some US states)

Not forgetting that technically EU had passed the US in size of economy some years ago, and the EEA (EU+Norway, Iceland and Liechtenstein) even earlier.
So, Is the loss of US long standing global dominance inevitable? I don't think Malaysia would be affected much by the dwindling power of USA, However will this now make EU the "worlds police" soon?
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Last edited by Thirdshifter; 16-03-2008 at 11:06 AM.
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  #2 Old 16-03-2008 Default

I doubt Europe can carry that role properly. There are a lot of countries within the context of Europe and i don't think they can unite on all decisions, should they become the de-facto world police.
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  #3 Old 27-03-2008 Default

As US is heading into recession (Which is all Bush's fault. $3 trillion on a war they shouldn't be in is major crowding out, no matter how much damage subprime mortgages is doing.), volatility is estimated to be around 30% these days, compared to about 10% previously. Hence, a great investment strategy right now would be straddling options.

Just my 2 cents.

Last edited by strikingstar; 27-03-2008 at 12:48 PM.
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  #4 Old 27-03-2008 Default

By the rate this is going on, Malaysian students heading towards the States might benefit as the weakening dollar means more buying power to our Malaysian ringgit based on the currency exchange. Then again, the effect of the recession might spread worldwide and cause our own economy to head into another recession.
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  #5 Old 27-03-2008 Default

Quote:
Originally Posted by capablanca View Post
By the rate this is going on, Malaysian students heading towards the States might benefit as the weakening dollar means more buying power to our Malaysian ringgit based on the currency exchange. Then again, the effect of the recession might spread worldwide and cause our own economy to head into another recession.
The Malaysians will be paid in US dollar rather than in Ringgit. It means, their buying power will stay more or less the same or get even lower later on...
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  #6 Old 27-03-2008 Default

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Originally Posted by vseehua View Post
The Malaysians will be paid in US dollar rather than in Ringgit. It means, their buying power will stay more or less the same or get even lower later on...
Oh, I was thinking about those going to the states with their own money. Certainly, the currency exchange will be more in favor of them. But still, stuff in US are expensive!
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  #7 Old 27-03-2008 Default

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Originally Posted by capablanca View Post
Oh, I was thinking about those going to the states with their own money. Certainly, the currency exchange will be more in favor of them. But still, stuff in US are expensive!
If you have the chance to come to europe you will know the real meaning of expensive.
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  #8 Old 30-03-2008 Default

Quote:
Originally Posted by strikingstar View Post
Hence, a great investment strategy right now would be straddling options.

Just my 2 cents.

Some interesting #'s from Morningstar:
Over the last 10 years the S&P 500 has returned an average of just 1.3% annually. Over the last 9 years it has returned -.37% annually. And, over the last 8 years it returned -1.4% a year on average.

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  #9 Old 31-05-2008 Default

Quote:
Originally Posted by Thirdshifter View Post
Some interesting #'s from Morningstar:
Over the last 10 years the S&P 500 has returned an average of just 1.3% annually. Over the last 9 years it has returned -.37% annually. And, over the last 8 years it returned -1.4% a year on average.

OMG. I never knew that..

Then again S&P 500 is HUGE. So volatility is higher.. Plus all depends on the USD. Weaker USD means imports are expensive for them. But it could help their labour market.

Either way, we gain by a weaker USD. Sure, it might hurt our exports but we could now afford buying more stuff from the US and slowly change our economy to a services-oriented one, unlike now its exports-oriented.
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  #10 Old 01-06-2008 Default

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Originally Posted by ianbyc View Post
Sure, it might hurt our exports but we could now afford buying more stuff from the US .
From china you mean?
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