Quote:
Originally Posted by polish_aristocrat
ok everyone with a clue will probably laugh at my thread title and 10 years perspective 
anyway... right now for 1 Euro you need to pay $1.42 USD and for 1 Canadian dollar $1.02 USD 
do you think we should seriously expect a similar situation for let's say the next 2 years? or even worse?
or did the USD just his its low and now it will go higher again in the next months/years? |
OK - the 10 year term is more crystal ball, but five years is much easier
A similiar situation for the next two years? No doubts, but probably worse. At a conservative estimate the dollar will lose another 10% over the next year and probably roughly the same the following year.
Until "management" have a fiscal policy and stop living off a fantasy national credit card, nothing will change - the economy will continue on a downwards spiral and this will be reflected in currency value.
The downturn in the US home market has just started and expect that to drop a further 20% and possibly 30% more over the next 2-4 years.
The financial fantasy is still being painted by the Whitehouse ("the economy is healthy and stable") and Wall Street who are on the next level of fraud trying to convince gullible people that their asset-backed securities are "quality bond investments".
This repackaging of shit to make it look good has no hope in hell of being profitable from an investor angle. At a quick look, it is awesome the level of aggressive marketing being conducted by banks and brokers - they all have good movitation to dump crap. The products itself, although packaged to look good, consists of high amounts of sub-prime mortgage problems. Any bank should be paying investors to take that crap off their hands. Any investor who does buy will lose probably an average of 20% on their investment.
The one company which did go bust and where they were different to several others is American Home Mortgage Corporation. This company did not deal in sub-prime mortgages and catered to a good credit market. To sum up their position (part of an email to employees):
"... conditions in the US mortgage market had deteriorated to the point that our business was no longer viable".
Note - that has nothing to do with sub-prime - simply that the property market was an investment in a bubble and not viable.
The home market may only be one factor, tho a crucial element. The mentality of many people who buy homes are that they are a "source of getting rich" - more fallacy.
Another aspect is industry itself - this has been run down in various ways (outsourcing blah) and is in a totally unfit condition to rise to the challenge of international markets - bottom line, there is little to offer.
One of the biggest debts (if not the biggest), is the commitment by the US government to it's electorate who contributed to pensions. These funds no longer exist and this month will be the start of payouts to "baby boomers", but the coffers are empty.
There are many more factors and little positive on the horizon. Changes of government create blips of hope, but depending on the degree of effective attention given to the economy, there is not likely to be a change of course. If you watched a pack of cards fall - this is a similar image.
Bottom line - can't see any prospect of light at the end of the tunnel for ten years, - and that needs competent fiscal management which appears unlikely to come from any prospective leadership at the moment or in the near future time.
So, you got dollars? Cash em in for any other stable currency - bets on they will do nothing but depreciate in value.