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Decline of the US Dollar

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Old
08-26-2009, 10:59 AM
  #1
bleed_oil
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Decline of the US Dollar

http://www.theglobeandmail.com/globe...rticle1258111/
While people worry about the relatively irrelevant issue of the status of a single team, a larger development is gradually happening unnoticed. The US dollar is losing its status as the Worlds reserve currency. This is a new paradigm in financial markets that will completely transform the finances surrounding NHL teams.

What happens 5 years from now when the $CDN is 1.2 Us dollars? What happens when this is the new "normal". How do teams in currently marginal markets like Atlanta and Phoenix compete in that environment? Relatively speaking, how do small Canadian markets like Winnipeg or Quebec City look?

Should be very interesting.

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08-26-2009, 11:06 AM
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Doctor No
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Quote:
Originally Posted by bleed_oil View Post
What happens 5 years from now when the $CDN is 1.2 Us dollars? What happens when this is the new "normal".
Don't you mean "if"? Saying "when" sounds like you should be out making a fortune in the stock market.

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08-26-2009, 11:46 AM
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bleed_oil
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Quote:
Originally Posted by Doctor No View Post
Don't you mean "if"? Saying "when" sounds like you should be out making a fortune in the stock market.
go look at posts we had on here last last year and some of the local economic gurus were claiming that we would see low commodity prices and a strong US dollar indefinitely - because that's the way things always were.

As for your comment on the stock market, that's exactly what I am doing - though "fortune" is obviously a relative term.
FYI - look at what John Paulson, George Soros and Jim Rogers w\ the Quantum Hedge Fund or M. El-Arian is doing at PIMCO.
Any number of market participants are expecting the US dollar to collapse.

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08-26-2009, 11:49 AM
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Doctor No
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You can throw all of the emoticons at me that you want - the fact remains that if there truly was an arbitrage opportunity available, you'd be out there taking advantage of it.

Posturing aside, this is an "if" question and not a "when" question. The fact that you're so obviously giddy over the possibility doesn't make it a certainty.

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08-26-2009, 12:23 PM
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bleed_oil
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Quote:
Originally Posted by Doctor No View Post
You can throw all of the emoticons at me that you want - the fact remains that if there truly was an arbitrage opportunity available, you'd be out there taking advantage of it.

Posturing aside, this is an "if" question and not a "when" question. The fact that you're so obviously giddy over the possibility doesn't make it a certainty.
Yes I am giddy, and I AM out there taking advantage of it. So is John Paulson, PIMCO, the Quantum Hedge fund and just about anyone else who knows a thing or two about finance. This is the future my freind, and any number (though clearly not a large number) of [mod: deleted] cant change that.
BTW are you putting your money behind the US dollar? You buying the US dollar bull ETF and keeping your money out of commodities in the long run?

I would think not.


Last edited by Fugu: 08-26-2009 at 10:43 PM. Reason: baiting
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08-26-2009, 12:28 PM
  #6
Doctor No
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Quote:
Originally Posted by bleed_oil View Post
BTW are you putting your money behind the US dollar? You buying the US dollar bull ETF and keeping your money out of commodities in the long run?
No. No, I'm not. And the reason I'm not supports my stance (although you seem to have thrown the question out there hoping to make me look foolish).

It's an "if" question, not a "when" question. I don't have any idea about what the US dollar is going to do any more than you know - regardless of how much you claim to know.

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08-26-2009, 12:51 PM
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bleed_oil
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Quote:
Originally Posted by Doctor No View Post
No. No, I'm not. And the reason I'm not supports my stance (although you seem to have thrown the question out there hoping to make me look foolish).

It's an "if" question, not a "when" question. I don't have any idea about what the US dollar is going to do any more than you know - regardless of how much you claim to know.
Semantics
Yes it is probable that the US dollar will regain all its lost strength and all the momentum we see in the other direction will be reduced. It is "possible" so it is an "if" and not "when" question. But practically this is a matter of termology, nothing else.
The probability of the USD reclaiming strength is very low, whereas the probability of the opposite happening is extremely high. On this basis we make investment decisions and preparations for the future.
Either way you are distracting from the topic at hand. In the highly likely event that the US dollar continues its decline, what happens to the NHL's financial structure?

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08-26-2009, 12:57 PM
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Quote:
Originally Posted by bleed_oil View Post
Either way you are distracting from the topic at hand. In the highly likely event that the US dollar continues its decline, what happens to the NHL's financial structure?
You're still trying to lead this topic towards your own personal agenda. It's not a "highly likely" event.

It seems like you already know the answer that you'd like to hear.

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08-26-2009, 01:54 PM
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bleed_oil
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Quote:
Originally Posted by Doctor No View Post
You're still trying to lead this topic towards your own personal agenda. It's not a "highly likely" event.

It seems like you already know the answer that you'd like to hear.
LOL - ok, so its an improbable event, thats why just about every decent money manager in the world is angling towards it.
Seems to me like someone just cant admit they are wrong (and were wrong all along)

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08-26-2009, 02:07 PM
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Quote:
Originally Posted by bleed_oil View Post
Seems to me like someone just cant admit they are wrong (and were wrong all along)
That was the impression I arrived at as well.

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08-26-2009, 02:09 PM
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Quote:
Originally Posted by bleed_oil View Post
LOL - ok, so its an improbable event, thats why just about every decent money manager in the world is angling towards it.
Seems to me like someone just cant admit they are wrong (and were wrong all along)
As someone who's supposed to know a thing or two about finance, you know that can't be true, otherwise the USD would already be in freefall. All the market participants you named may be expecting the US currency to fall further, but no one is expecting nor hoping for its collapse. Everything is relative in currency markets and whatever happens to the status of the USD as the world's reserve currency doesn't say all that much about the status of the USD against the Canadian dollar.

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08-26-2009, 02:25 PM
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bleed_oil
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Quote:
Originally Posted by barneyg View Post
As someone who's supposed to know a thing or two about finance, you know that can't be true, otherwise the USD would already be in freefall. All the market participants you named may be expecting the US currency to fall further, but no one is expecting nor hoping for its collapse. Everything is relative in currency markets and whatever happens to the status of the USD as the world's reserve currency doesn't say all that much about the status of the USD against the Canadian dollar.
Of course no one is hoping for its collapse, but that may not be something within anyone's control at this stage. The US account deficit is beyond management at this stage.
On the issue of relative view on the US dollar check this article:
http://www.moneyweek.com/investments...lar-14991.aspx
" I overheard on Bloomberg last week that just 3% were bullish on the dollar"
So at this stage as stated in the article, anyone long the dollar is making an extraordinarily contrarian bet.
On the issue of relative valuation of USD vs CD, its a reasonable assumption that a commodity based currency like the loonie would do well after the USD loses its status as the worlds reserve currency. Obviously it wouldn't be the only currency to strengthen and moreover the impact all this has on the Canadian economy is still to be decided. I'm sure Canadian exporters very concerned with the USD direction.

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08-26-2009, 02:28 PM
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Quote:
Originally Posted by Doctor No View Post
That was the impression I arrived at as well.
Dont believe that I was wrong last fall, but we shall see.

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08-26-2009, 02:28 PM
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dollar bears/commodity bulls beware

dollar commentary starts at 4min30sec


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08-26-2009, 03:12 PM
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bleed_oil
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His point is completely possible if not even likely. We are discussing LONG TERM TRENDS - not technical market directions. I would be shocked if there is not a correction from the markets current direction. Short term pricing and market action are not necessarily tied to secular trends. If anything several commodities but most obviously oil are very overbought right now in light of usage and inventories and in the short term the USD is oversold.

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08-26-2009, 03:51 PM
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Quote:
Originally Posted by bleed_oil View Post
His point is completely possible if not even likely. We are discussing LONG TERM TRENDS - not technical market directions. I would be shocked if there is not a correction from the markets current direction. Short term pricing and market action are not necessarily tied to secular trends. If anything several commodities but most obviously oil are very overbought right now in light of usage and inventories and in the short term the USD is oversold.
FWIW, Prechter has said, on more than one occasion recently, that the dollar rally he sees taking place should last for years (his words)...not months. I agree, for the most part with his reasoning…as debt levels in the US contract (repayment and default etc), the dollar should strengthen. Further strength may be fueled, when the bubble in China pops (and it will), as there is going to be, IMO, a massive flow back into dollars as that carry trade unwinds. The China bubble popping is going to be VERY ugly for commodities and the currencies of their producing nations (Canada, Russia, Australia et al.)

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08-26-2009, 05:14 PM
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bleed_oil
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Quote:
Originally Posted by EddieMFRoyal View Post
FWIW, Prechter has said, on more than one occasion recently, that the dollar rally he sees taking place should last for years (his words)...not months. I agree, for the most part with his reasoning…as debt levels in the US contract (repayment and default etc), the dollar should strengthen. Further strength may be fueled, when the bubble in China pops (and it will), as there is going to be, IMO, a massive flow back into dollars as that carry trade unwinds. The China bubble popping is going to be VERY ugly for commodities and the currencies of their producing nations (Canada, Russia, Australia et al.)
Well that’s the first salient argument I’ve ever seen on this board for the US dollar besides something along the lines of “that’s the way its always been”.
As for the actual argument, its possible but for so many reasons – IMO - any rally in the dollar will be short lived. The single biggest reason is base demographics and the fact that growth needs to shift to Asia for there to be any growth at all.
On the issue of the Chinese bubble popping, I would expect some serious cooldown in Chinese growth. The current trade imbalance between China and the rest of the world is completely unsustainable.

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08-26-2009, 08:48 PM
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Robert Prechter makes a portion of his living by making economic predictions. In the end, I feel that this entire argument on this thread is silly, because, be you either bull or bear, the final arbiter is the market; the saying is that the market is always "right".

My point being that anyone citing Prechter has no better chance of forecasting the market than virtually anyone else on this site, In fact, Prechter's long-term track record has been questioned as being poor. Scroll down and check the "Criticism" portion on his wiki page. Each critique is backed by linked documents....

http://en.wikipedia.org/wiki/Robert_Prechter

As I stated, Precheter earns at least a portion of his living by making predictions. Another old axiom in the business, is, to stay in the prediction business, keep making predictions.

Eventually some of them will even turn out correct!

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10-08-2009, 10:55 AM
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bleed_oil
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The Demise of the (US) Dollar

Reading this board there are countless threads regarding relative economics of hockey teams in the US and Canada.
Currency rates are the single most relevant economic factor dictating the addition of Canadian teams and possible failure of already struggling teams in certain geographic areas in the US. Its likely fair to say that on an even currency basis, cultural factors create an economic advantage towards Canadian teams. An article appeared earlier this week in the British newspaper The Independent that is both highly relevant to this topic and accelerated the devaluation of the US dollar. An article from the Asia Times today confirmed the existence of these discussions:
http://www.atimes.com/atimes/Middle_East/KJ09Ak01.html
Enjoy!

http://www.independent.co.uk/news/bu...r-1798175.html

Quote:
The demise of the dollar


In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.


Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars...
Mod Edit:


Last edited by LadyStanley: 10-08-2009 at 12:10 PM. Reason: excess quotation/title
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10-08-2009, 11:15 AM
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It's a factor. The USD is going down. Too much debt/trade imbalances/oil prices/etc. But I said this all before.

GHOST

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10-08-2009, 11:21 AM
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bleed_oil
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Quote:
Originally Posted by GHOSTofMAROONSroad View Post
It's a factor. The USD is going down. Too much debt/trade imbalances/oil prices/etc. But I said this all before.

GHOST
It isnt just a factor. It is THE factor. On an even to even basis, do you think Winnipeg\Quebec City would have left the league if the $CDN was par or greater than par.
Extremely unlikely I would say.

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10-08-2009, 11:21 AM
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If I remember correctly, Mr. Oil here predicted that the dollar would go down previously --and it went up. He also went about how Oil Sands made Alberta's economy indepedent of the rest of Canada and the USA. I think if I had listened to your advice I would have lost a LOT of my investment money.

When the **** hit the fan last October, investors fled to the US dollar. That's a fact. Here's a link:
http://www.mybudget360.com/wp-conten.../us-dollar.png


Last edited by Enstrom39: 10-08-2009 at 11:33 AM. Reason: added link
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10-08-2009, 11:38 AM
  #23
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The USD is sinking big time just as we predicted. You can only print so much of it, but there is nothing to back it up except a lot of debt.

GHOST

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10-08-2009, 11:40 AM
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bleed_oil
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Quote:
Originally Posted by The Falconer View Post
If I remember correctly, Mr. Oil here predicted that the dollar would go down previously --and it went up. He also went about how Oil Sands made Alberta's economy indepedent of the rest of Canada and the USA. I think if I had listened to your advice I would have lost a LOT of my investment money.

When the **** hit the fan last year, investors fled to the US dollar. That's a fact.

Actually I have been a commodity bull and US dollar bear the the whole time. Short term trends dont interest me and cannot be predicted.
As for taking my "advice" had you taken my advice and invested in commodities and gold and went short the US dollar you would have done quite well since start of the year.
http://hfboards.com/showthread.php?t...ed_oil&page=20
I notice that you scurried away and failed to answer me questions back in January as well. Mod: deleted.

Anyways do you have something to contradict either of the two news articles or are you just going to throw everything at the wall and hope something sticks.


Last edited by Fugu: 10-08-2009 at 02:01 PM. Reason: trolling
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10-08-2009, 11:41 AM
  #25
bleed_oil
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Quote:
Originally Posted by GHOSTofMAROONSroad View Post
The USD is sinking big time just as we predicted. You can only print so much of it, but there is nothing to back it up except a lot of debt.

GHOST
Yep, we've been calling it since the beginning of the year. Like I've said over and over again, I cant imagine anyone who understands finance ever going long the US dollar at this stage.

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