A wide range of factors interact to determine the exchange rate level: the government, market forces of supply and demand for a particular country's currency, interest rates, inflation, a country's balance of trade and/or payments, and consumers' expectations about what will happen in the future. In addition, many countries, including the United States, Japan, and Canada, set "flexible" or "floating" exchange rates that change on a daily, or even hourly, basis, depending on currency demand and supply. The downward sloping curve indicates a weakening of the U.S. dollar. What you can do... * Explore the potential of hedging commodities and currencies on the futures and option markets when opportunity exists. * Pre-sell commodities to foreign countries and pre-buy foreign inputs if you believe the exchange rate is likely to weaken (decline in value). * If possible, delay both pre-selling commodities abroad and purchasing foreign capital items if there is the likelihood that the exchange rate will strengthen (gain in value). * In some cases, it may make sense to draw up contracts in U.S. dollars rather than in the currency of trading partners. This would be the case where you are purchasing inputs from a foreign supplier and believe that U.S. currency is expected to weaken or that foreign currency is expected to strengthen. * Pre-buy foreign currencies if you believe that the exchange rate is likely to weaken.
I remember meeting a stamp collector last week. We started talking economic history. He showed me a German 500 million Reichmark stamp from the hyperinflation period about 1931 or 1932. Imagine buying a stamp for US $ 500 million just to mail a letter to a friend. It could happen. Also possible is that USA goods and services become so competitively priced that USA manufacturing and agricultural export sales increase, employment increases and we find something else to complain about. <img src=http://www.hobbizine.com/almimages/alm_ge_293.jpg \img> We might all be trillionaires one day.
Nonesense. Only a few factors undermine currency. The biggest factor being: Handing over the power to mint money to private banks. That's why much of modern economics is gobblygook. Modern economists need to conjur up equations even God doesn't understand because you can't make sense out of nonesense. However if you think like the corrupt greedy banking cabal, it'll all make sense. This period of currency expansion will be followed by a severe currency contraction. The question is not if, but when that will happen.
granted current political environment it would go bust but of recent introduction its half-life nearing now will make sure it don't happen...a wager the amero merger will save the day?