Comments on Saving to Inve$t: US dollar update, outlook and opinions

SB - I am moving to a making dividends a more impo...

2008-08-13T09:30:00.000-04:00

SB - I am moving to a making dividends a more important part of my portfolio. A post on this soon. Dollar has made a decent rebound of late so maybe things are not so bad.

Beb to Differ - It has risen even more against the Australian and Canadian dollars. Just shows you how fast currency markets can change. The main reason for the dollar strength is a weakning of the global economy and the fact that interest rates are more likely to go up here, rather than in Europe. So investors are coming back to the dollar.

Oil prices are coming down because the dollar is going up (inverse relationship as oil is priced in dollars), but also because demand (due to a global slowdown) is occuring.

I think the dollar is going to stay around current levels and possibly get a bit stronger this year. I think 1.45 against the euro is realistic. I will do some more research and write an updated post in the near future.

Since your post the Dollar has risen over 4% again...

2008-08-12T20:24:00.000-04:00

Since your post the Dollar has risen over 4% against the Euro.

Do you think the decline in Oil Prices (and their impact on the deficit) may be a greater factor than the 3 reasons you mention, or do you still think the dollar is headed for new lows?

Thank you for your vote of confidence. Before havi...

2008-07-20T17:11:00.000-04:00

Thank you for your vote of confidence. Before having me write for your blog, you should try to get the guy who writes the Dividends4life blog that you have linked on your home page. He appears to have all the ducks in a row concerning value investing.
Right now I am just extremely worried and pessimistic about the future of the dollar; in terms of inflation and well as its status as a world reserve currency. Hence my search for opportunities in other currencies and countries. The opportunities and guidance are there for everyone to partake, it just takes a lot of work and research.

ME - Thanks. Years of excess have led us to this p...

2008-07-17T18:20:00.000-04:00

ME - Thanks. Years of excess have led us to this position. Oil is falling on a weakning economy. Longer term this is worse. Still I think Oil will bounce back and current weakness could present a buying opp.

SB - Fund looks good. I'll look into it some more. Do you have a blog? You seem to know a lot about finance..if you would like to write a guest post here with your views, let me know

Curt - Fannie/Freddie have access to the funds. Doesn't mean they will use it. Overseas investors already own 40 Trillion of their bonds, so a few more billion won't make much of a difference. The government is now backing the two companies so they should have enough capital, without needing too much fed help. The alternative of leaving them to collapse would be much worse than a dollar peso.

The trillion dollar bailout of Freddie/Fannie will...

2008-07-17T15:59:00.000-04:00

The trillion dollar bailout of Freddie/Fannie will drive the dollar down for years to come.

The decline of king dollar is the source of many o...

2008-07-17T09:00:00.000-04:00

The decline of king dollar is the source of many of our problems today. Don't look for Bernanke to do anything about it soon, despite the prodding he got from Ron Paul yesterday during testimony.

Check out the Merck Hard Currency Fund (MERKX.) I bought in last Fall and I'm up 8 percent since. It invests in other currencies, not the dollar. $2500 minimum investment.

Also, it's interesting to note that all this conti...

2008-07-16T12:36:00.000-04:00

Also, it's interesting to note that all this continues to go on even as oil prices are coming down - today oil's only $134/barrell. There are pockets of economic problems in the US that have nothing to do with oil going up.

Good summary of the situation! That's pretty much...

2008-07-16T12:35:00.000-04:00

Good summary of the situation! That's pretty much how I understand it, too. And the more Americans that learn about it and themselves start to diversify into other currencies to protect themselves, - it seems that will just make the situation worse. But what are they supposed to do, bear all the losses themselves?