NBC:My response to query re: Dollar Drops to New All-Time Low Vs. Euro

Steve Hoffman steve@goodnote.com
Tue Nov 30 11:42:23 EST 2004

Hold on to your hat, folks. This is just a beginning of a long slide.

51% of U.S. voters may have been fooled by Bush, but the world's capital
markets are NOT.

In adddition to a falling dollar, look forward to large increases in
interest rates (caused in large part by the need to attract ever more
wary foreign buyers to purchase hordes of U.S. Treasury bonds to finance
the Bush budget deficit). (A problem that will get much worse, by the
way, with Bush's plan to borrow even MORE money to finance his Xmas
present to Wall Street: the partial-privatization of social security.)

One noticeable impact of the coming rise in interest rates will be jumps
in mortgage payments for homeowners with adjustable rate mortgages. This
will be an especial problem since historically LOW interest rates of the
past decade have fueled a boom in home prices -- but it's a boom that is
sustainable only as long as the mortage rates stay so low.

Of course, when Mr & Mrs Red-State America loses their home 'cuz they
can't pay the higher mortage, at least they can rest safe and secure
knowing that it won't be a gay married couple who buys their home at the
bank's foreclosure sale.

-- Steve Hoffman

pat boyack wrote:

>As the dollar drops I was wondering how it will, or is effecting American
>bands touring over there.
>Pat B
>Dollar Drops to New All-Time Low Vs. Euro
>By GEIR MOULSON, Associated Press Writer
>BERLIN - The U.S. dollar dropped to a new all-time low Tuesday against the
>euro, which rose to $1.3335 even as new figures showed that U.S. economic
>growth in the third quarter was stronger than previously thought.
>The dollar's persistent slide has been fueled by concern over the U.S.
>trade and budget deficits, and economists say markets are paying only
>limited attention to economic data against that background.
>The dollar hit its new low against the euro, breaking the previous record
>of $1.3329 set Friday, shortly after European Central Bank President Jean-
>Claude Trichet renewed his assertion that the euro's rapid rise against
>the U.S. currency is "unwelcome."
>The dollar also slipped against the Japanese yen Tuesday, falling to
>102.54 yen from 102.88 yen on Monday.
>Because the euro's rise tends to make European products more expensive,
>European leaders have voiced fears that it might hurt the continent's
>export-driven economic recovery.
>The weak dollar also makes life tougher for Americans living abroad, and
>the U.S. military announced this week that troops stationed in Europe
>would receive a significant cost of living increase to help provide some
>Still, Trichet's comments in testimony to the European Parliament — which
>echoed his previous remarks — didn't appear to advance the chances of the
>ECB wading into currency markets to reverse the tide, said Lee Ferridge,
>chief currency strategist at Rabobank in London.
>"It doesn't seem to be top of the agenda at the moment," he said, adding
>that "the trend is still intact" and the euro could top $1.35 in the next
>two weeks.
>Economic data from the United States Tuesday was "OK but mixed," and
>markets remain more concerned with the twin U.S. deficits, Ferridge said.
>Before the dollar dropped to its new low, the Commerce Department reported
>that the U.S. economy — helped out by more brisk consumer and business
>spending — expanded in the third quarter at an annual rate of 3.9 percent,
>stronger than previously thought.
>The new reading on gross domestic product, which is based on additional
>data, was up from the 3.7 percent growth rate first estimated for the July-
>to-September quarter.
>Meanwhile, a private research group reported that U.S. consumer confidence
>declined for the fourth consecutive month — defying market expectations of
>an increase.
>The dollar perked up slightly after a report that showed Chicago-area
>manufacturing activity grew at a greater than expected pace in November,
>with the euro slipping back to $1.3315.
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