Need help with a paper about the strength of the dollar!

tltaylor89 · 02-23-10, 12:15 PM

Strong dollar means weak oil but also means rampant inflation .

ZBOIZ · 02-23-10, 12:18 PM

Fishface our dollar system compared to other big countries has dropped tremendously. Euros is killing our dollar system.

Really your paper is opionated. There's no right or wrong answer.

MJT1212 · 02-23-10, 12:19 PM

If your doing your research on SBR you might as well give it up now.

fsugolf · 02-23-10, 12:20 PM

MJT1212 · 02-23-10, 12:58 PM

Go find the trend line of the US Governments debt over the last 10 or 20 years and you will see very clearly why the dollar is devalued. You can't just keep going into debt and printing new money without loosing a substantial amount of value.

MJT1212 · 02-23-10, 12:59 PM

Anyone have GBP pounds I can trade for USD, +EV money?

chase hardy · 02-23-10, 01:01 PM

sounds like an easy paper to me. Sit back, hit you a big bowl and just start feeding the bs. This paper is your opinion with some small facts that can be googled easily. GL bro!

MJT1212 · 02-23-10, 01:08 PM

Originally posted by chase hardy

sounds like an easy paper to me. Sit back, hit you a big bowl and just start feeding the bs. This paper is your opinion with some small facts that can be googled easily. GL bro!

Sounds like you have some experience in paper writing as I do myself. This is EXACTLY what I would do/ what I do do when I have a big paper due. It really helps you concentrate and the results will be better than you think being high and all.

Boner_18 · 02-23-10, 01:20 PM

The dollar remains the global reserve currency and has experienced a decline against other global currency because of a decline in GDP. However, what this decline really represents is the self correcting (sometimes called "pain") action of our economy. Business, particularly small banks, made risky loans and lost the bets. In the face of tens of thousands of bank failures the federal government, under President George W. Bush, decided to infuse capital and ease monetary policy. This had the effect of giving the troubled banks easy or free money with which to operate in the interm so that they could continue profitable operations in the hope that those operations would better stabilize institutions that made losing "bets." As a direct result of this capital infusion and prevailing low interest rate, global investors have correctly and predictably driven down the price of a dollar because quite simply a greenback has less purchasing power RELATIVE to other currencies. There are two extremely prominent dangers that stem from the above outlined action.

The first is one of timing. When does the Department of Treasury retract the stimulative lending and the Federal Reserve tighten it's monetary policy? Essentially this question of timing asks, "when and how abruptly should the pain be felt?" Every loss from a bad loan must be realized in some form, the actions taken by various government actors simply delays the realization of that loss....

That should get you started.

BAUS · 02-23-10, 02:14 PM

Mathy should be along shortly to explain it for you.

The more of it that gets printed, the less it's worth. Find a graph showing how much more has been printed since the bailouts and you have yourself a winning paper pal.

BAUS

mathdotcom · 02-23-10, 02:29 PM

BAUS is correct.

Begin with a simple insight: the exchange rate is a price, the price of U.S. dollars in this case. If there is a large increase in the money supply, this will lead to inflation. This means that you need more U.S. dollars to buy the same amount as goods, i.e. the 'value' of the USD has declined - it buys you less than it did before.

Not only is it the growth of the money supply but also expectations about future inflation.

The U.S. owes a lot of money to foreigners. Suppose they owe $100 to someone in France, and the current exchange rate is 1USD=1Euro. Then at the moment the U.S. owes that Frenchman 100Euros. If in the next year that Frenchman expects the USD to plummet to 2USD = 1 Euro, then this Frenchman expects to only get paid back 50 Euros. This Frenchman is screwed however because he has already made the loan. But other Frenchmen will realize this when deciding to loan to anyone in the U.S. -- they will be reluctant to loan if they think they won't get paid back very much whenever the loan repayment must occur.

The result is that people around the world no longer want to buy U.S. treasury bills (the equivalent of a 'loan' to the U.S. government), which is where a lot of people used to put their money if they wanted to save. As a foreigner, to buy a U.S. treasury bill you must first buy USD. Since foreigners want to invest less in US T-Bills, foreigners want to buy fewer USD, the demand for USD has declined. Basic demand and supply suggests the price of USD should then fall.

Now cite some journal articles that discuss the USD and you will look sharp and guarantee yourself an A.

HenPrivilege · 02-23-10, 02:49 PM

Highly opinionated paper. There is no right or wrong answer. No one can predict the markets future. If it's 5 pages double spaced, then you will have no problem. You can BS on smaller sub topics for days on this. As of today, the Euro is 1.35 to our 1. The Yen is 90 to our 1 and the GBP is 1.54 to our 1. When the market crashed in 08' all the analysts and experts thought it was wise to pound the currency markets. If they are still holding today, then they took a hit. There was a time that the Euro was a solid 2 to 1. You can go to yahoo finance and look up the historical data and talk about it forever.

In regards to interest rates, the key interest rate has been at zero for the longest time and that will change. That means banks won't be borrowing money for free anymore, which has been making them pretty fat recently. Lots to talk about on the key interest rate.

I use to whip tons of these BS papers out. I just graduated with a B.S. in Finance Fall 09.

FishFace5 · 02-23-10, 06:45 PM

Thanx fellas.
Greatly appreciated.

Grandmaster B · 02-23-10, 06:49 PM

all it is...is a piece of paper

if the government announced tomorrow it was worth nothing you could use it to wipe your ass