New dollar book value record!

Kent, just a few days ago when I attended a business meeting in Walldorf (greater Heidelberg area, SAP world headquarters are there) I actually learned that there once was a guy called Jacob Astor who emmigrated to the US and became awfully rich trading furs in Oregon so that among others he could actually build a hotel in New York City. He named it after his own family name plus his place of birth: Walldorf Astoria. I suppose I can afford to stay there in... say... 2 more months ;-)?

Love Astoria, OR will be there next month on a cruise...

planning on stopping at Custard King

Andreas, that's our version of a gelato..certainly not the same..but much better than ice cream!

Also, if you read about Titanic there was an Astor onboard!

Andreas,
Thank you for your kind reply to my questions re Lake Constance some weeks back. My/your entry has disappeared or been edited out.
I thought I was going to Germany this summer but with the even lower xchg it is unknown now.
JS

Oh yeah, we will be all over the US this year :-)).... but not only Germans... don't forget that Malta, Cyprus and Slovenia are the latest additions to the €uro. My personal whishes to all of the American people reading this is to being able to read in between the lines. Greenspan was in Saudi Arabia to encourage them to - like other Arab countries - drop the dollar... Eventually this means $2 = €1 and that's actually not justified... Something is going wrong and at least the smarter ones of you should try to investigate for answers...

Andreas, it is not a complicated question as to why the dollar is falling. Primarily related to the massive, deficit spending that our government is engaging and the lowering of our internal interest rates. We are sending too many dollars abroad and the dollars abroad cannot be invested for a good return in the US. Until that changes, the dollar will continue to decline.

Actually, a large portion of the dollar's fall is also because of we as a nation, on the aggregate of the population, have a near-zero rate of savings, and because other developing countries who kept their reserves in dollars are now floating their supply and diversifying it with euros. Until these two trends reverse (which is unlikely), I doubt the slide will subside, no matter who is elected next November.

The dollar is a note issued be the Federal Reserve. Do you know who owns the Fed? That makes it even more interesting...

It's possible that the US dollar has been overvalued for a long time because it was considered the only safe-haven to store value. Now the Euro offers a legitimate alternative to that and is taking some of the prestige away from the dollar.

Will it continue? No telling. As the EU adds more eastern block countries with deep seated economic issues it will have an effect on the currency. Meanwhile deficits run by EU members like France and Italy in violation of their commitments will also effect their currency.

The US would certainly be better off with a higher savings rate and less deficits, but that's not likely any time soon.

Financial markets always find balance. I'm interested to see where it goes but I'm not jumping out any windows over it.

The dollar problem is that since the Nixon days it's a fiat currency and not based on any real value. As long as the world MUST buy oil in US-dollars that's ok because technically that means the dollar's value is backed by oil. Oil producing countries that challenge that "dollar-oil-deal", like e.g. Venezuela, suddenly face regime change attempts by the US. Iraq switched from dollar to euros in 2001 and oops... suddenly they were said to have weapons of mass destruction and the US had to interfere. First thing they did was to swicth back oil trading to the dollar. Now Iran said they were going to introduce a new currency, the Gold Dinar... and oops, suddenly they've become a threat to global security (alleged nukes etc.) and will have to be fought as well.

Andreas, Here's a brief history & everything else related to the American central banking system, specifically explained for teachers: http://www.federalreserveeducation.org/fred/. It seems to be concise & a quick read. There is no easy interpretation of this dollar rate problem. What everyone has written so far it part of the mix. I'll also add to don't forget China who's is literally sucking up all the oil it can get & the American housing bubble burst & the various international banks who bought investments vehicles consisting of American sub-prime, home mortgages. There are those(like that famous ex-Fed mentioned)who are taking advantage of this crisis & making a lot of money.

"The fact that oil purchases are made in USD means nothing.... Afterall, as you indicated the exchange rate is $1.50/1 Euro. It may be quoted in USD, but transactions may be made in other currencies.

What most people don't say is that US manufacturing is booming due to a weak dollar, yes there is manufacturing left in the US....

There's not a major currency that ISNT a fiat currency. The Euro is one as is the Yen, the rubble, the yuan etc. Prior to the euro, so was the franc, the deutsch mark, the lira etc..." MBA

David... US manufacturing is booming due to the low dollar. They always say that countries with "weak" or "cheap" currencies would be best at exporting etc. BUT in 2007 inspite of the very expensive €uro Germany once again beat China in global exports. China's currency is cheap. Germany's is very expensive. But yet...

Most people know, you get what you pay for!
I pay 5x more for aquarium pumps made in Germany VS a cheap one from China. Quality cost $$$ or EU, china can sell a billion units of junk and not get much for it.

German automobile club just issued a new test of summer tyres. All models from all brands worldwide are at least satisfactory - not so the ones made in China. There's one Chinese tyre that simply can't get a car to actually stop on a wet road. Hmmm.

See, you can save money; but just dont drive in the rain :(