The Dollar and The Financial Crisis

mefistofeles · Heavy Crude Joined: Mar 21, 2005 Posts: 264

One gauge of the severity of the financial crisis could be the strength of the dollar.

As the crisis has escalated I noticed the dollar crossed several critical thresholds. On the first week the Euro went from 1.38 to 1.43 dollars.

Now we are in the second week and after trading around 1.466 for a while it seems to trading in the 1.47 range.

In other words I am using the dollar Euro exchange ratio as a scorecard that helps me gauge the crisis. The stronger the Euro becomes the more accute the financial crisis and crisis of confidence in the dollar.

My theory is that as the crisis reaches the next "inflection point" the dollar will depreciate at an increasing rate.

Ironically this crisis is proving to be a real boom for the energy and commodities markets. As the dollar disintegrates the price of commodities will increase.

Koyaanisqatsi

Death of the Dollar

dsula · Heavy Crude Joined: Jun 13, 2007 Posts: 147

gollum

The dollar will continue to decline at an accelerating pace as it becomes clear the only thing the feds can do is print money. You can print money but you cant print wealth.

sittinguy · Heavy Crude Joined: Sep 07, 2007 Posts: 386

I'm REALLY waiting to see what happens to the dollar when the 700b get passed.