Fiscal Cliff US dollar value

[login]

Anyone here have any idea how january 2nd will effect US currency (or the period leading up to it)

I have some US dollars and I should be in Mexico, so I'm wondering if I should convert them into Pesos to keep their value

[Guest]

I saw some fellow from the University of Chicago on tv yesterday who said that the fiscal cliff is a myth. The US debt is actually 20 times greater than the US government leads us to believe and the fiscal cliff will be no more than a sppedbump on the road to fiscal catastrophe.

He seemed to know what he was talking about.

[Bonam]

The prospect of the fiscal cliff is already priced in. The people trading currencies and thus establishing their value are the people who follow these economic and fiscal policies the closest.

[August1991]

Anyone here have any idea how january 2nd will effect US currency (or the period leading up to it)

I have some US dollars and I should be in Mexico, so I'm wondering if I should convert them into Pesos to keep their value

The US dollar has already lost value over the past few years. Will it lose more value?

I'd say, likely.

Can I time this value change (as you seem to want to)? No.

Is this loss in value good or bad for America? Between 1860 and 1910, the US suffered numerous financial crises, and yet during this time, America became a world power.

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Login, financial crises and exchange rates matter to individuals. For the success of society at large, exchange rates and financial crises matter little, since other factors matter more.

[dre]

Anyone here have any idea how january 2nd will effect US currency (or the period leading up to it)

I have some US dollars and I should be in Mexico, so I'm wondering if I should convert them into Pesos to keep their value

Nobody knows, because its unclear what it will do to the fragile economy. But in theory it should increase the value of the US dollar because the mandatory spending cuts will mean that the US government doesnt need to sell as many bonds to fund its operation, which will make US paper more scarce.

If you are looking for a hedge against the US dollar though, your best bet is to move with the pack, and do exactly what everyone else does, because all that demand will drive up the value of the hedge. I would probably buy gold not pesos....

[blueblood]

The US dollar has already lost value over the past few years. Will it lose more value?

I'd say, likely.

Can I time this value change (as you seem to want to)? No.

Is this loss in value good or bad for America? Between 1860 and 1910, the US suffered numerous financial crises, and yet during this time, America became a world power.

----

Login, financial crises and exchange rates matter to individuals. For the success of society at large, exchange rates and financial crises matter little, since other factors matter more.

in 1860 to 1910 the USA also didn't print money and increase spending to get itself out of trouble either.

All they did was let the market correct itself and they went back at it.

[cybercoma]

Obama to GOP: I'm done negotiating with myself

Republicans are frustrated at the new Obama they’re facing: The Obama who refuses to negotiate with himself.

That’s what you’re really seeing in this “proposal.” Previously, Obama’s pattern had been to offer plans that roughly tracked where he thought the compromise should end up. The White House’s belief was that by being solicitous in their policy proposals, they would win goodwill on the other side, and even if they didn’t, the media would side with them, realizing they’d sought compromise and been rebuffed. They don’t believe that anymore.

The GOP made their bed. Now they're laying in it.

Edited November 30, 2012 by cybercoma

[login]

Although gold does look convincing carrying around gold in a foreign country does not look too convincing. I like to be able to use it easy.. I'm not sure the oro exchange houses in mexico will offer as good a rate of the market on trade in.. anyone know how the gold and platinum and silver shops in mexico handle exchange likehow much value will be lost in converting usd to gold then converting it back for cash at a latter date?

Edited November 30, 2012 by login

[login]

Anyone know how an invasion of Syria will effect the US dollar?

[August1991]

in 1860 to 1910 the USA also didn't print money and increase spending to get itself out of trouble either.

Uh, I think it did - but in a severely disorganized manner.

Greenback

All they did was let the market correct itself and they went back at it.

Panics of 1873, 1893 and so on.

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Nevertheless, between 1870 and 1920 (or so), despite Panics and a weird monetary system, the US State rose to world dominance.

I suspect that while money is a personal obsession, it doesn't matter much for society. Money is perhaps another example of the Fallacy of Composition.

Anyone know how an invasion of Syria will effect the US dollar?

Whose invasion will affect the US dollar? Edited December 12, 2012 by August1991

[Topaz]

Isn't China the only one that can push the US over the cliff? I heard that they don't like the deal Harper made with China but they can't come out and say thing because the debt they owe to China.

[bush_cheney2004]

Nope...China only holds about 10% of US federal debt. China has a vested interest (pun intended) in keeping US Treasuries healthy. Bothe nations need each other to be successful.

[August1991]

Nope...China only holds about 10% of US federal debt.

Indeed, but this percentage is falling. Does China need America because of Treasury bills? No. I think that China needs America for another reason: when China decides to enact good copyright rules, it will likely plagiarize America's law.

=====

I think the US Fed holds about 60% of US federal government debt. IOW, the US Fed has printed (lotsa) money (trillions) and Obama has spent it.

Notice that US annual inflation is still at about 2%, and there's no sign that inflation will go up.

[dre]

Indeed, but this percentage is falling. Does China need America because of Treasury bills? No. I think that China needs America for another reason: when China decides to enact good copyright rules, it will likely plagiarize America's law.

=====

I think the US Fed holds about 60% of US federal government debt. IOW, the US Fed has printed (lotsa) money (trillions) and Obama has spent it.

Notice that US annual inflation is still at about 2%, and there's no sign that inflation will go up.

China just wants to flog stuff to American consumers.

They constantly print yuans and use them to buy US treasuries as part of a scheme to undervalue the yuan relative to the US dollar, and keep real wages and costs in china very low.

I think the US Fed holds about 60% of US federal government debt.

No not even close...

The Federal Reserve holds $1.659 trillion. More like 12%.

Notice that US annual inflation is still at about 2%

That entirely depends what goods and services are abitrarily put in the basket used to calculate CPI.

[August1991]

No not even close...

The Federal Reserve holds $1.659 trillion. More like 12%.

Your statistic, 12%, refers to US federal government debt held by the US Fed as a percentage of GDP.

FRED

(In fact, the percentage is closer to 11%, not 12%.)

But as Mark Steyn would say, Bernanke has printed gazillion dollars, Obama has spent them, and America is now in a death spiral.

Meanwhile, back in the real world, the CPI is still around 230 or so, (1984=100).

Edited December 15, 2012 by August1991

[August1991]

That entirely depends what goods and services are abitrarily put in the basket used to calculate CPI.

The Google price measure is not different.

http://www.guardian.co.uk/business/2010/oct/12/google-create-new-inflation-measure