Gents, I've been buying large sums of $USD anticipating that its value will rise relative to the $CAD in the coming years leaving me with a nicer profit than most investment vehicles. Which way will the $USD go? If the $CAD were to fall back to the $0.60 USD range seen circa 2002 within the next five-ten years I'm poised to make a killing.
$USD: your opinion
- Thread starter userz
- Start date
While I do not see the $can go much over parity for an extended period, I also do not see the $can go much below parity in the future, as the $US slowly will be losing some of its staus as the worlds reserve currency.Looking forward to winding down USD carry trade as early as 2013.
The question would then be what kind of pain one could endure when the lofty Loonie bubble burst.
Recent budget problems in the states leave me very bearish on the U.S. $ (which is unfortunate since I'm sitting on a fair bit of it which I'm now going to have to find some way to profitably invest to make up for the exchange loss over time).
I think the U.S. federally is in danger of becoming like California - incapable of raising revenues and equally incapable of meaningfully lowering costs. Their system is just about hopelessly dysfunctional at this point.
Short of Quebec seperating I don't see how the Can $ could drop down to $.60 again. So if I were you I would look for a US $ denominated investment vehicle which yields an acceptable return for you even if the currency gain doesn't manifest.
I think the U.S. federally is in danger of becoming like California - incapable of raising revenues and equally incapable of meaningfully lowering costs. Their system is just about hopelessly dysfunctional at this point.
Short of Quebec seperating I don't see how the Can $ could drop down to $.60 again. So if I were you I would look for a US $ denominated investment vehicle which yields an acceptable return for you even if the currency gain doesn't manifest.
Could very well be true in terms of USD losing some of the status as the world's currency, not so much for no to low risk of the loonie goes below parity.
That being said, what alternatives do the rest of the world have to replace USD as reserve currency? Euro? Yen? Gold?
If my memory serves me right, the United States has the largest reserve of gold bullion on earth, roughly the Germans & Italians reserves combined. No?
Any idea who said "Our money (USD) is your problem"? Nixon? Dubya? Obama? Any clue whether that person shows 2 middle fingers when saying the obvious??
BTW, how do we know the strength of the Loonie is not mainly due to inflow of hot money, namely borrowing USD hand over fist on the cheap while pushing CAD assets of all kinds to the bubbly territories?
B
burt-oh-my!
I read an interesting report somewhere recently which pointed out that the US holds more hydrocarbon ( I think ) reserves than any other country on earth. Why? Coal. In coal the US is a mega-superpower. SO if they can really really work on making coal cleaner that will be big.
I also read something a year or so ago which said that the value of US agriculature is just huge. So a further bull market in agricultural commodities wil help US food exports. So the US has alot of tremendous assets, not the least of which is of course their companies (about 50% of S^P 500 earnings come from outside the US) and their entrepreneurial mindset.
As for the currency, there is definitely a downtrend in the USD against the CDN now, and in my experience trends can often go a hell of alot further than most people expect, so if the $1.08 level is taken out, I wouldn't be surprised to see it go to $1.20 in a couple of yers. But anything is possible.
I also read something a year or so ago which said that the value of US agriculature is just huge. So a further bull market in agricultural commodities wil help US food exports. So the US has alot of tremendous assets, not the least of which is of course their companies (about 50% of S^P 500 earnings come from outside the US) and their entrepreneurial mindset.
As for the currency, there is definitely a downtrend in the USD against the CDN now, and in my experience trends can often go a hell of alot further than most people expect, so if the $1.08 level is taken out, I wouldn't be surprised to see it go to $1.20 in a couple of yers. But anything is possible.
Not gonna happen since it's very expensive to implement cleaner coal technologies.
Plus, the lobbyists representing utilities, say AEP that use a lot of coal to generate electricity persuade the politicians to scrap the plan since the Utilities will have to pass the cost to the people. No career politicians would commit suicides by screwing the constituents, justified or not.
Yep and agricultural "complexes" are as powerful, if not more compared to the MIC.
Pretty much explain why Obama, who used to represent Illinois is owned by the US agricultural complexes, namely promoting misguided policies and giving tonnes of subsidies to convert corn into ethanol for SUV instead of feeding people elsewhere.
That's one of their "solutions" to become energy independence, whatever that is.
LOL, you are still "underperform" if you hold SPY of the world, instead of BTU, ADM of the world.
Anything is possible but not going to be surprised the Fed is going to raise interest rate at a brisk pace in 2013, after 2012 presidential election.
B
burt-oh-my!
Only a fool says 'Not gonna happen ' when it comes to technology and/or financial markets. No-one actually knows where technology is going to take us.
Your 'agriculture complex' comment - what exactly are you saying about the value of US agriculture, which I said was huge? Are you agreeing or disagreeing? You tend to like 'spouting' all sorts of irrelevant nonsense sometimes, to do with all sorts of conspiracies and other claptrap.
I have no idea what you are trying to say with your SPY /ADM comments either.
SPEAK CLEARLY MAN! STICK TO THE POINT!
Your 'agriculture complex' comment - what exactly are you saying about the value of US agriculture, which I said was huge? Are you agreeing or disagreeing? You tend to like 'spouting' all sorts of irrelevant nonsense sometimes, to do with all sorts of conspiracies and other claptrap.
I have no idea what you are trying to say with your SPY /ADM comments either.
SPEAK CLEARLY MAN! STICK TO THE POINT!
Much of the value of the US agriculture industry will be eroded away if oil prices continue
its escalation. No countries in the world is more blessed with abundance of natural
resources. For a long time only one country in the world was endowed with more oil than the
US and that was Saudi Arabia. While Saudi has almost nothing else of value the US is
seemingly rich in everything. And yet I won't count on rising commodity prices to come
to the rescue of the US economy. The US has for long consumed more resources it
produced. It is cheap and abundant oil that has enabled it to produce more food than
it needs. Hyperinflation of prices of commodities and oil in particular could destroy
the US economy.
B
burt-oh-my!
Demonstrably untrue.
If energy is just one component of agricultural costs, and if agricultural prices rise as fast as oil prices, then profits will likely rise faster than oil prices do, assuming other costs like labour, financing, equipment rise less. And agricultural commodities ARE on a huge upswing.
As a matter of fact, we don't need to hypothesize - farm profits are at or near record highs even as oil prices have gone up 10 fold over the last decade, so higher oil prices have not hurt farm profits in the slightest.
Farm Economy Heading for Record Driving Surge in U.S. Cropland
By Jeff Wilson, Alan Bjerga, Yi Tian - Nov 14, 2010 8:33 PM ET
Limited impact
To be sure, higher oil prices raise transportation costs for farmers just like everyone else.
However, fuel to run farm machinery, trucks and other equipment accounts for only a tiny portion of overall inputs -- about 3 percent of the total cost of growing corn on an acre of land in central Illinois this year, said Gary Schnitkey, professor of farm management at University of Illinois.
That's more than offset by the bullish impact on grain prices.
The best second-half for commodities in a generation is pushing U.S. farm incomes and agricultural land prices toward record highs.
While the 17 percent rise in the Thomson Reuters/Jefferies CRB Index of 19 raw materials since the end of June reflects higher prices for all commodities, agriculture led the biggest rally since 1972. Cotton prices surged 76 percent to a record, wheat jumped 48 percent and corn reached a two-year high.
At a time when the U.S. jobless rate is 9.6 percent and home prices are weakening, this year’s farm income may top the $87.3 billion reached in 2004, while cropland values will rise as much as 10 percent, said Neil Harl, an agricultural economist at Iowa State University and former adviser to the governments of Ukraine and the Czech Republic. The jump in commodities means more sales of Deere & Co. tractors and Mosaic Co. fertilizer.
“It will be a phenomenal year for farm income,” said Michael Swanson, a Minneapolis-based senior economist at Wells Fargo & Co., the largest U.S. agricultural lender. “We are not going to rebuild inventories in one year. This will take several years. Farmers are already running flat out, and it will take time for supply to catch up with rising demand.”
This latest stuff (if I interpret it correctly), reducing the deficit by 6 trillion over the next 10-12 years, means that the debt will continue to grow. If the US currently runs a 1.2 to 1.4 trillion deficit each year, that means six trillion ([1.2 trillion x 10 years] - 6 trillion) will be tacked on to the nation's debt within the next ten years - assuming nothing catastrophic happens.
In tens years the debt will be around were the budgeting office said it would be - 20 trillion. So, unless Canada follows suit, I would say the US dollar is going down.
In tens years the debt will be around were the budgeting office said it would be - 20 trillion. So, unless Canada follows suit, I would say the US dollar is going down.
Every commodities boom in history has ended the same way, this one will be no different. The US$ is being pounded down by QE2. I am actually surprised the Euro is rising so much, after all the Euro's are printing almost as much as the US. Who is going to replace the US as the reserve currency? I don't really see any contenders. Basket of currencies? My ass, who will coordinate it and ensure the various players comply with the rules? The US deficit can be dealt with but we shall see.
To OP, it doesn't seem like the Canadian dollar is going anywhere (I think it's currently sitting above $1.04).
I think the best you can hope for (which I'm also hoping for since I'm sitting on a considerable pile of USD) is that it gets to parity and you take a slight loss when you sell them back to your bank.
Man, I wish I had traded all my USD when it was 80 cents on the Canadian dollar.
I think the best you can hope for (which I'm also hoping for since I'm sitting on a considerable pile of USD) is that it gets to parity and you take a slight loss when you sell them back to your bank.
Man, I wish I had traded all my USD when it was 80 cents on the Canadian dollar.
I wouldn't bother speculating on currency moves when I can invest in diversified stocks and be much surer of making money in five to ten years. The stock markets will trend up in the long run whatever may come while any single currency can be flat or even down over the longer term.
You could buy good US stocks and benefit from your US $ outlook and the expectation of capturing the growth of the stocks. If you feel the need to try to make a killing take $10K and put it on your favorite number at the roulette table.
D.
Kind of late to buy US stocks right now, isn't it when the majority of the US stocks outperform starting earlier this year and more importantly the QE2 is supposed to come to end in late June? No?
Unless we are talking about dogs like MSFT, INTC, CSCO, even home builder stocks like DRI and LEN.
LOL, like somebody with heavy American Southern accent say "Our money is your problem!". No?
Nah, didn't recall John is that lack of class.
True but it's not necessarily so in $$$ and politics.
The US agricultural stocks are going nuts lately, just take a look at the proxy like DBA.
Sounds like it's about time to take a portion of those stocks off the table.
Sounds like somebody who have no idea how pervasive the lobbyists influence in American politics and more importantly how this could influence the stock prices of those industries in question. No?
As mentioned, your 1 year rate return for holding SPDR S&P Dividend ETF (SDY) is way lower than investing in Archer-Daniels-Midland (ADM). No?
What point are you talking about??
BRICS credit: Local currencies to replace dollar
Apr 14, 2011, 01.46pm
SANYA:Brazil, Russia, India, China and South Africa - the BRICS group of fastest growing economies - Thursday signed an agreement to use their own currencies instead of the predominant US dollar in issuing credit or grants to each other.
The agreement, the first of its kind, was signed at the 3rd BRICS summit here attended by Indian Prime Minister Manmohan Singh, China's Hu Jintao, Brazil's Dilma Rousseff, Russia's Dmitry Medvedev and South Africa's Jacob Zuma.
Apr 14, 2011, 01.46pm
SANYA:Brazil, Russia, India, China and South Africa - the BRICS group of fastest growing economies - Thursday signed an agreement to use their own currencies instead of the predominant US dollar in issuing credit or grants to each other.
The agreement, the first of its kind, was signed at the 3rd BRICS summit here attended by Indian Prime Minister Manmohan Singh, China's Hu Jintao, Brazil's Dilma Rousseff, Russia's Dmitry Medvedev and South Africa's Jacob Zuma.
