Post by jeffolie on Apr 29, 2011 9:12:35 GMT -6
inflationary Dollar Index 72.XX, was 80 going to 70 or lower
The Dollar weakening results in 'import inflation'.
I predicted a large Dollar Index decline on Jan 1st...DXY was then about 80: "...DOLLAR INDEX: DXY will go below 70..." unlawflcombatnt.proboards.com/in ... hread=8394
The Dollar printing and deficits in trade plus federal government deficts combined with an unwilling to tax policy, led to my view along with Germany's strong exports to China and history of fighting inflation since WWII.
Dollar was 80, going to 70 or lower, now 72.XX
====================================================
Dollar below 73 with 72.XX handle
Day low...72.83
www.marketwatch.com/investing/index/DXY
2011 jeffolie predictions include: "...DOLLAR INDEX: DXY will go below 70..." see all my 2011 jeffolie predictions at unlawflcombatnt.proboards.com/in ... hread=8394
Here is my current thinking on the Dollar.
It seems to me that the Dollar for the moment is like the British Pound which declined from about $4 to now about $1.60 mixed with the USSR Rubble which totally collapsed.
I refer to the USSR Rubble because the USSR was America's Rival superpower until about 1991:
[from Wikipedia] Sixth Soviet ruble, 1961 - 1991
50 kopek type issued 1961-1991.The 1961 redenomination was a repeat of the 1947 reform, with the same terms applying.[clarification needed] Newly designed notes were issued with artwork by the artist Victor Tsigal depicting scenes from Soviet life and Soviet industrial achievements. The Soviet ruble of 1961 was formally equal to 0.987412 gram of gold, but the exchange for gold was never available to the general public. This ruble maintained parity with the Pound Sterling until the breakup of the Soviet Union in 1991 when the ruble became the new currency of the Russian Federation.
[from Wikipedia] British Pound
In 1940, an agreement with the U.S.A. pegged the pound to the U.S. dollar at a rate of £1 = $4.03. This rate was maintained through the Second World War and became part of the Bretton Woods system which governed post-war exchange rates. Under continuing economic pressure, and despite months of denials that it would do so, on 19 September 1949 the government devalued the pound by 30.5% to $2.80. The move prompted several other currencies to be devalued against the dollar.
In the mid-1960s, the pound came under renewed pressure since the exchange rate against the dollar was considered too high. In the summer of 1966, with the value of the pound falling in the currency markets, exchange controls were tightened by the Wilson government. Among the measures, tourists were banned from taking more than £50 out of the country, until the restriction was lifted in 1979. The pound was eventually devalued by 14.3% to $2.40 on 18 November 1967.
In 2006 the House of Commons Library published a document[37] which included an index of the value of the pound for each year between 1750 and 2005, where the value in 1974 was indexed at 100. (This was an update of earlier documents published in 1998 and 2003.)
Regarding the period 1750–1914 the document states: "Although there was considerable year on year fluctuation in price levels prior to 1914 (reflecting the quality of the harvest, wars, etc.) there was not the long-term steady increase in prices associated with the period since 1945". It goes on to say that "Since 1945 prices have risen in every year with an aggregate rise of over 27 times."
The value of the index in 1751 was 5.1, increasing to a peak of 16.3 in 1813 before declining very soon after the end of the Napoleonic Wars to around 10.0 and remaining in the range 8.5–10.0 at the end of the nineteenth century. The index was 9.8 in 1914 and peaked at 25.3 in 1920, before declining to 15.8 in 1933 and 1934—prices were only about three times as high as they had been 180 years earlier.[38]
Inflation had a dramatic effect during and after World War II—the index was 20.2 in 1940, 33.0 in 1950, 49.1 in 1960, 73.1 in 1970, 263.7 in 1980, 497.5 in 1990, 671.8 in 2000 and 757.3 in 2005.
The following table shows the equivalent amount of goods that, in a particular year, could be purchased with £1.[39] The table shows that from 1971 through 2009 the British Pound has lost about 91% of its buying power.
Buying power of one British Pound compared to 1971 GBP Year Equivalent buying power Year Equivalent buying power Year Equivalent buying power
1971 £1.00 1980 £0.30 1989 £0.18
1972 £0.94 1981 £0.27 1992 £0.15
1973 £0.86 1982 £0.25 1994 £0.14
1974 £0.74 1983 £0.24 1996 £0.14
1975 £0.59 1984 £0.23 1999 £0.12
1976 £0.51 1985 £0.21 2000 £0.12
1977 £0.44 1986 £0.21 2007 £0.10
1978 £0.41 1987 £0.20 2008 £0.09
1979 £0.36 1988 £0.19 2009 £0.09
The British Pound was a 'reserve currency' and the USSR Rubble was accepted by almost half the world, at least the Communist world.
So for the moment America's Dollar competes economically in a declining mode with a progression similar to Spain's high unemployment (see Bart's U-7 reconstructed 21% broad jobless number which is near Spain's official 20%) and Spain's failed real estate sector.
America's 'reserve currency' and petrodollar status for the moment allow unlimited FED FRN money printing allowing the FED to buy almost all of the newly issued Treasuries used for the budget deficit. This great advantage and aggressive policy assures no risk of default for the moment.
America's 'no risk of default' Dollar still is losing purchasing power as are all currencies compared to commodities since the 'recovery' or recent bottom in the CRB Index. This is a relative currency situation as measured by the Dollar Index but an absolute lose of purchasing power as measured by the CRB.
Most here at this forum would rather use Gold/Silver to compare the currencies. For the moment purchasing power for the world resides in the commodities bundle and not Gold/Silver. If I am correct, after implossion of Derivatives, then Gold/Silver will be more accepted than the commodities bundle as a measure of purchasing power.
Yes, the Dollar 'sounds' like the British Pound's lost purchasing power. But, the British were not one of the two superpowers after WWII. That is why a refer to the collapsed USSR's Ruble. Politically the USSR had a kind of revolution into a Democracy that is closer to an oligarchy-thuggery. Britain had a gentle decline. America financially looks somewhat like Spain's failed real estate economy but also like Europe in general as manufacturing left to China.
There is no clear, easy analogy. America has economic and purchasing power decline.
jeffolie
--------------------------------------------------------------------------------
What are the currencies in the Dollar Index?
answer:
57.6% Euro
13.6% Japan's Yen
11.9% Great Britain's Pound
9.1% Canadian Dollar
4.2% SEK = Swedish Krona
3.6% CHF = Swiss Franc
1.bp.blogspot.com/_H2DePAZe2gA/T ... dollar.PNG
The Dollar weakening results in 'import inflation'.
I predicted a large Dollar Index decline on Jan 1st...DXY was then about 80: "...DOLLAR INDEX: DXY will go below 70..." unlawflcombatnt.proboards.com/in ... hread=8394
The Dollar printing and deficits in trade plus federal government deficts combined with an unwilling to tax policy, led to my view along with Germany's strong exports to China and history of fighting inflation since WWII.
Dollar was 80, going to 70 or lower, now 72.XX
====================================================
Dollar below 73 with 72.XX handle
Day low...72.83
www.marketwatch.com/investing/index/DXY
2011 jeffolie predictions include: "...DOLLAR INDEX: DXY will go below 70..." see all my 2011 jeffolie predictions at unlawflcombatnt.proboards.com/in ... hread=8394
Here is my current thinking on the Dollar.
It seems to me that the Dollar for the moment is like the British Pound which declined from about $4 to now about $1.60 mixed with the USSR Rubble which totally collapsed.
I refer to the USSR Rubble because the USSR was America's Rival superpower until about 1991:
[from Wikipedia] Sixth Soviet ruble, 1961 - 1991
50 kopek type issued 1961-1991.The 1961 redenomination was a repeat of the 1947 reform, with the same terms applying.[clarification needed] Newly designed notes were issued with artwork by the artist Victor Tsigal depicting scenes from Soviet life and Soviet industrial achievements. The Soviet ruble of 1961 was formally equal to 0.987412 gram of gold, but the exchange for gold was never available to the general public. This ruble maintained parity with the Pound Sterling until the breakup of the Soviet Union in 1991 when the ruble became the new currency of the Russian Federation.
[from Wikipedia] British Pound
In 1940, an agreement with the U.S.A. pegged the pound to the U.S. dollar at a rate of £1 = $4.03. This rate was maintained through the Second World War and became part of the Bretton Woods system which governed post-war exchange rates. Under continuing economic pressure, and despite months of denials that it would do so, on 19 September 1949 the government devalued the pound by 30.5% to $2.80. The move prompted several other currencies to be devalued against the dollar.
In the mid-1960s, the pound came under renewed pressure since the exchange rate against the dollar was considered too high. In the summer of 1966, with the value of the pound falling in the currency markets, exchange controls were tightened by the Wilson government. Among the measures, tourists were banned from taking more than £50 out of the country, until the restriction was lifted in 1979. The pound was eventually devalued by 14.3% to $2.40 on 18 November 1967.
In 2006 the House of Commons Library published a document[37] which included an index of the value of the pound for each year between 1750 and 2005, where the value in 1974 was indexed at 100. (This was an update of earlier documents published in 1998 and 2003.)
Regarding the period 1750–1914 the document states: "Although there was considerable year on year fluctuation in price levels prior to 1914 (reflecting the quality of the harvest, wars, etc.) there was not the long-term steady increase in prices associated with the period since 1945". It goes on to say that "Since 1945 prices have risen in every year with an aggregate rise of over 27 times."
The value of the index in 1751 was 5.1, increasing to a peak of 16.3 in 1813 before declining very soon after the end of the Napoleonic Wars to around 10.0 and remaining in the range 8.5–10.0 at the end of the nineteenth century. The index was 9.8 in 1914 and peaked at 25.3 in 1920, before declining to 15.8 in 1933 and 1934—prices were only about three times as high as they had been 180 years earlier.[38]
Inflation had a dramatic effect during and after World War II—the index was 20.2 in 1940, 33.0 in 1950, 49.1 in 1960, 73.1 in 1970, 263.7 in 1980, 497.5 in 1990, 671.8 in 2000 and 757.3 in 2005.
The following table shows the equivalent amount of goods that, in a particular year, could be purchased with £1.[39] The table shows that from 1971 through 2009 the British Pound has lost about 91% of its buying power.
Buying power of one British Pound compared to 1971 GBP Year Equivalent buying power Year Equivalent buying power Year Equivalent buying power
1971 £1.00 1980 £0.30 1989 £0.18
1972 £0.94 1981 £0.27 1992 £0.15
1973 £0.86 1982 £0.25 1994 £0.14
1974 £0.74 1983 £0.24 1996 £0.14
1975 £0.59 1984 £0.23 1999 £0.12
1976 £0.51 1985 £0.21 2000 £0.12
1977 £0.44 1986 £0.21 2007 £0.10
1978 £0.41 1987 £0.20 2008 £0.09
1979 £0.36 1988 £0.19 2009 £0.09
The British Pound was a 'reserve currency' and the USSR Rubble was accepted by almost half the world, at least the Communist world.
So for the moment America's Dollar competes economically in a declining mode with a progression similar to Spain's high unemployment (see Bart's U-7 reconstructed 21% broad jobless number which is near Spain's official 20%) and Spain's failed real estate sector.
America's 'reserve currency' and petrodollar status for the moment allow unlimited FED FRN money printing allowing the FED to buy almost all of the newly issued Treasuries used for the budget deficit. This great advantage and aggressive policy assures no risk of default for the moment.
America's 'no risk of default' Dollar still is losing purchasing power as are all currencies compared to commodities since the 'recovery' or recent bottom in the CRB Index. This is a relative currency situation as measured by the Dollar Index but an absolute lose of purchasing power as measured by the CRB.
Most here at this forum would rather use Gold/Silver to compare the currencies. For the moment purchasing power for the world resides in the commodities bundle and not Gold/Silver. If I am correct, after implossion of Derivatives, then Gold/Silver will be more accepted than the commodities bundle as a measure of purchasing power.
Yes, the Dollar 'sounds' like the British Pound's lost purchasing power. But, the British were not one of the two superpowers after WWII. That is why a refer to the collapsed USSR's Ruble. Politically the USSR had a kind of revolution into a Democracy that is closer to an oligarchy-thuggery. Britain had a gentle decline. America financially looks somewhat like Spain's failed real estate economy but also like Europe in general as manufacturing left to China.
There is no clear, easy analogy. America has economic and purchasing power decline.
jeffolie
--------------------------------------------------------------------------------
What are the currencies in the Dollar Index?
answer:
57.6% Euro
13.6% Japan's Yen
11.9% Great Britain's Pound
9.1% Canadian Dollar
4.2% SEK = Swedish Krona
3.6% CHF = Swiss Franc
1.bp.blogspot.com/_H2DePAZe2gA/T ... dollar.PNG