Dollar in Dilemma ~~~~~~

[niceneasy]

Quote from intelligent:

Thanks for replying. But what do you mean? Is the U.S dollar really in danger and is its purchasing power reallygoing to strike off? Yes, its understood that if Chinese yuan and Mexican peso currencies are added the index will touch above 50. but how in this context , the purchasing power of dollar getting hammered can u explain bit clearly

corns busting highs
sugar
wheat
oj
copper
oil
etc - all busting up

all to do with the weakness of the usd... these things are things we buy every day (basically all processed food is made from corn, wheat, sugar) - so we are losing purchasing power. especially when we buy a lot of this stuff from overseas...

unless - you stop eating or driving or heating your home or going out or doing anything - which, incidentally, is how cpi is now calculated to keep inflation around 2%

the fed's hands are tied... as dollar is losing ground relative to other currencies - it has to find a way to convince people to buy dolalrs on the world market. 3 billion a day of them to be precise... it does this by raising rates, which it cannot do or its going to put more heat on a rapidly deflating housing bubble...

its really quite scary - but you wouldnt know it by looking at the equities market....

 

[daddyeaux]

the Fed keeps bitching at China for not letting their currency free float but there is no bitching at Saudi or Iran or Qatar or the UEA for not letting their currencies float....

I mean most of the world's money passes through their hands once or twice a year to buy oil......

cant piss off the Arabs even though we prop up their right wing dictatorships....

the DX index also doesn't include India which is scarfing up forex....

the stock market action suggests that people are beginning to catch on...something the gold players saw 3 years ago