Last Stage? Dollar Drops To Lowest Level This Year 2009!

The U.S. is running huge budget and trade deficits, relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets. The downfall of the dollar seems to be only a matter of time.

Dollar Declines as Slump Prompts Nations to Mull Alternative

‘Last Stage’

The euro’s rally against the dollar may be entering its “last stage,” and investors would likely benefit from selling the 16-nation currency against the greenback, UBS AG said.

The dollar dropped to its lowest level against the euro this year on speculation record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.

The 16-nation euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound strengthened to $1.65 for the first time since October.

www.bloomberg.com...

The dollar also declined on speculation “smaller” central banks started today’s selling of the greenback, said Sebastien Galy, a currency strategist at BNP Paribas SA in New York.

“If people believe that there is official pressure behind it, then obviously it puts pressure on euro-dollar on the upside,” Galy said. Galy predicted the 16-nation currency may reach $1.4360 today, a peak last reached in December.

[edit on 2-6-2009 by burntheships]

It's all coming to a head. After the summer season you will get the real numbers and everything will tank.

People must realize that if the US Dollar is dropped as reserve currency the US Government will be insolvent!

The USD is doing better right now against the EUR than it was at this time last year:

June 2, 2008: $1 = 0.64€

June 2, 2009: $1 = .70€

You can play around with the historical exchange rates here.

If I'm remembering correctly, there was a period last year when the exchange was worse than the first stat mentioned. Maybe something like 1€ = $1.70?

reply to post by octotom


Yes...I am seeing this as inevitable, permanent...for many reasons.
Much water has gone under the bridge and changed everything.

[atsimg]http://files.abovetopsecret.com/images/member/2232ca7cc2d1.jpg[/atsimg]

Also, posting this here as it all plays together. I have to take this serious as too much volatility in the last week. Something is up...this is what it is!

at least IMHO.

www.abovetopsecret.com...

reply to post by burntheships


I think that you misunderstood me. I was trying to say that the euro being where it's at against the dollar today is not a cause for alarm because it's doing better now than it was at this point last year.

reply to post by octotom


I Stand corrected, I think I understand what your are saying about the exchange rate.

Gas went up 15 cents today by me. That's a 45 cent rise IN ONE WEEK!!

Is inflation here? Cripes man. I hope it doesn't get really bad but I fear it's going to.

I told my wife to fill up the tank this morning because it usually goes up on tuesdays quite a bit. And it did...again.

I recommend others doing that if you notice a pattern when the prices go up or down.

It's going to be a bad summer. This sucks!