ECONOMICS PRIMER for everyone asking about the US DOLLAR - GoFuckYourself.com

Buff · 12-30-2003, 01:03 PM

From GFY's Resident Economist, me...

First things first. Here is the chart for MZM (Money Zero Maturity) aka The Stock of Money. This is the measure of the liquid money supply within an economy. MZM has become one of the preferred measures of money supply because it better represents money readily available within the economy for spending and consumption. This chart is from 1/1/2000 to the present. I got the statistics from Economagic.com.

As you can see, the Federal Reserve has been increasing the money supply at an incredible rate over the last 3 years. This makes each dollar worth less and less over time. That is why it costs more and more dollars to buy other currencies, like the Euro. This is also why the price of commodities like Gold are being bid up. Relative to a fiat currency like the dollar, there is a fixed amont of gold. Another reason gold is being bid up is that gold is traditionally a hedge against inflation, and when the government starts printing dollars like there's no tomorrow, inflation follows.

So what's the future of the dollar? A general trend downward in value until such time as the government stops creating new money out of thin air.

jas1552 · 12-30-2003, 01:39 PM

Do you know when the downward trend starts?

Za Ha · 12-30-2003, 01:41 PM

Once the euro hits 1.35 US the Central Banks will step in because this will hurt international trade WAY too much and then the US will raise and the Euro will fall.

hetomito · 12-30-2003, 02:58 PM

it's now 1.25.. do you have a guess when will it hit .35?
I guess in fall of 2004 like September..
just an humble opininon though I'm not an economist.

Suckitbitch · 12-30-2003, 03:01 PM

Quote:

Originally posted by Buff
From GFY's Resident Economist, me...

Just wondering, did you also cut & paste your economics PhD?

- AFN - · 12-30-2003, 04:45 PM

Good post, Buff. There's also the Iraq expenses, the jobless recovery, and other factors. Plus OPEC might switch to EURO as their currency standard.

MetaformX · 12-30-2003, 04:47 PM

thats it, im moving to europe

Monk · 12-30-2003, 04:50 PM

Quote:

Originally posted by Buff

So what's the future of the dollar? A general trend downward in value until such time as the government stops creating new money out of thin air.

At which time, they will no longer be propping the stock market up with all the funny money and the bear can continue.

smproduction · 12-31-2003, 06:22 AM

EUR/USD last trade 1.2625
New records everyday! I'm really worried about the excessive speed of this growth.

xxxzoltan · 12-31-2003, 06:24 AM

Quote:

Originally posted by Suckitbitch

Just wondering, did you also cut & paste your economics PhD?

frippeno · 12-31-2003, 06:42 AM

I agree with ya sorta, except....

Growth in money supply is usually accompanied by inflation, which is what really does the damage.

Yet inflation has remained relatitively low.

I claim there is a different factor at work here. The dollar is falling because the world is becoming less and less interested in holding dollars. Why? Because the huge deficit spending and other irresponsible policies that have been pursued lately make inflation almost a certainty in the future.

Countries who rack up debt that they can never really pay back have a history of inflating their currency, it is an easy way to pay back $.80 on the dollar. The investment world out there now sees that as a real possibility for the US.

Also, there is the issue of which currency, the dollar or the Euro, will be used in major world commercial transactions, such as for oil. The dollar had a virtual lock on that role, but that lock is looking shakier by the month.

12-30-2003, 01:03 PM	#1
Buff GFY Assassin Industry Role: Join Date: May 2003 Posts: 2,993	ECONOMICS PRIMER for everyone asking about the US DOLLAR From GFY's Resident Economist, me... First things first. Here is the chart for MZM (Money Zero Maturity) aka The Stock of Money. This is the measure of the liquid money supply within an economy. MZM has become one of the preferred measures of money supply because it better represents money readily available within the economy for spending and consumption. This chart is from 1/1/2000 to the present. I got the statistics from Economagic.com. As you can see, the Federal Reserve has been increasing the money supply at an incredible rate over the last 3 years. This makes each dollar worth less and less over time. That is why it costs more and more dollars to buy other currencies, like the Euro. This is also why the price of commodities like Gold are being bid up. Relative to a fiat currency like the dollar, there is a fixed amont of gold. Another reason gold is being bid up is that gold is traditionally a hedge against inflation, and when the government starts printing dollars like there's no tomorrow, inflation follows. So what's the future of the dollar? A general trend downward in value until such time as the government stops creating new money out of thin air.

12-30-2003, 02:58 PM	#4
hetomito Confirmed User Join Date: Feb 2003 Location: EU Posts: 446	it's now 1.25.. do you have a guess when will it hit .35? I guess in fall of 2004 like September.. just an humble opininon though I'm not an economist. __________________ SIG TOO BIG! Maximum 120x60 button and no more than 3 text lines of DEFAULT SIZE and COLOR. Unless your sig is for a GFY top banner sponsor, then you may use a 624x80 instead of a 120x60.

12-30-2003, 04:45 PM	#6
- AFN - Confirmed User Join Date: Jun 2003 Location: NYC Baaaabeee Posts: 3,101	Good post, Buff. There's also the Iraq expenses, the jobless recovery, and other factors. Plus OPEC might switch to EURO as their currency standard. __________________ cat cash* \| tr -d '\r' \| tr -s '/n' > money

12-30-2003, 04:47 PM	#7
MetaformX Confirmed User Join Date: Mar 2002 Posts: 6,704	thats it, im moving to europe __________________

12-31-2003, 06:22 AM	#9
smproduction Confirmed User Join Date: Jan 2003 Posts: 508	EUR/USD last trade 1.2625 New records everyday! I'm really worried about the excessive speed of this growth. __________________ <a href="http://www.wishing.com/money/"><img src="http://www.wishing.com/money/promotools/referrals/bannerset2/wishing_affiliate_120x60_06.gif" border="0"><br><font face="Verdana, Arial" size="2"><b>Wishing.com</b>- Make over <b>$100.00</b> per sale with pills and patches</font></a>

12-30-2003, 01:39 PM	#2
jas1552 Confirmed User Join Date: May 2002 Location: Land of the free, home of the brave Posts: 1,462	Do you know when the downward trend starts?

12-30-2003, 01:41 PM	#3
Za Ha Confirmed User Join Date: Oct 2001 Location: Still lost Posts: 5,112	Once the euro hits 1.35 US the Central Banks will step in because this will hurt international trade WAY too much and then the US will raise and the Euro will fall.

12-31-2003, 06:42 AM	#11
frippeno Confirmed User Join Date: Oct 2002 Location: Addison, TX Posts: 133	I agree with ya sorta, except.... Growth in money supply is usually accompanied by inflation, which is what really does the damage. Yet inflation has remained relatitively low. I claim there is a different factor at work here. The dollar is falling because the world is becoming less and less interested in holding dollars. Why? Because the huge deficit spending and other irresponsible policies that have been pursued lately make inflation almost a certainty in the future. Countries who rack up debt that they can never really pay back have a history of inflating their currency, it is an easy way to pay back $.80 on the dollar. The investment world out there now sees that as a real possibility for the US. Also, there is the issue of which currency, the dollar or the Euro, will be used in major world commercial transactions, such as for oil. The dollar had a virtual lock on that role, but that lock is looking shakier by the month. __________________ it only took one brick to make that window drop Last edited by frippeno; 12-31-2003 at 06:47 AM..