Comments on: The Decline and Fall of the U.S. Dollar http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Sun, 08 Nov 2009 07:50:42 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: synchrono.us » Blog Archive » Rapping In Euros http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122914 synchrono.us » Blog Archive » Rapping In Euros Thu, 15 Nov 2007 20:05:30 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122914 [...] current weakness of the US dollar vs. the Euro is a well-discussed topic - everyone is trying to figure out what the abandonment of the dollar as the primary world currecy [...] [...] current weakness of the US dollar vs. the Euro is a well-discussed topic – everyone is trying to figure out what the abandonment of the dollar as the primary world currecy [...]

]]> By: Roundup for week of 4 November 2007: Surly Taco edition at Mighty Bargain Hunter http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122638 Roundup for week of 4 November 2007: Surly Taco edition at Mighty Bargain Hunter Mon, 12 Nov 2007 12:45:49 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122638 [...] Consumerism Commentary catches the doom and gloom bug with the decline and fall of the US Dollar. [...] [...] Consumerism Commentary catches the doom and gloom bug with the decline and fall of the US Dollar. [...]

]]> By: FinanceIsPersonal.com http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122550 FinanceIsPersonal.com Sun, 11 Nov 2007 15:59:00 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122550 I still question whether or not a weaker US Dollar is all that bad. Since all of our products are essentially on sale to the rest of the world, our trade deficit is falling through the floor. I still question whether or not a weaker US Dollar is all that bad. Since all of our products are essentially on sale to the rest of the world, our trade deficit is falling through the floor.

]]> By: Tim http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122369 Tim Fri, 09 Nov 2007 22:54:07 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122369 invest in US companies with large foreign exposure and you won't have to worry about it. second, someone has to buy the US currency vehicles, which in the end can be used to buy only US goods and services. continue to devalue the dollar US exports are more favorable (we already see how quickly the shift is working with the decrease in foreign trade balance this month), which has a negative impact on those foreign countries investments. The British Pound is also over valued, while the Yuan is seriously undervalued. the 6 countries may diversify their currency holdings, but they aren't stupid to think that the markets won't swing back towards the dollar. The US is too huge of a consumer market for them to drop the US dollar outright, and talk of doing so is rather silly. invest in US companies with large foreign exposure and you won’t have to worry about it. second, someone has to buy the US currency vehicles, which in the end can be used to buy only US goods and services. continue to devalue the dollar US exports are more favorable (we already see how quickly the shift is working with the decrease in foreign trade balance this month), which has a negative impact on those foreign countries investments. The British Pound is also over valued, while the Yuan is seriously undervalued.

the 6 countries may diversify their currency holdings, but they aren’t stupid to think that the markets won’t swing back towards the dollar. The US is too huge of a consumer market for them to drop the US dollar outright, and talk of doing so is rather silly.

]]> By: Sasha http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122264 Sasha Fri, 09 Nov 2007 04:54:49 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122264 Aha! The plot thickens..... You know, maybe supermodels really *are* the center of the universe... Aha! The plot thickens…..

You know, maybe supermodels really *are* the center of the universe…

]]> By: Flexo http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122240 Flexo Thu, 08 Nov 2007 19:24:42 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122240 It's starting to look like I'm obsessed with Gisele, but I just had to follow-up when I read this. Her sister/manager who was quoted as saying the model is no longer accepting payments in USD has <a href="http://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=7&entry_id=21755" rel="nofollow">denied ever making the statement</a> [SF Gate]. It’s starting to look like I’m obsessed with Gisele, but I just had to follow-up when I read this. Her sister/manager who was quoted as saying the model is no longer accepting payments in USD has denied ever making the statement [SF Gate].

]]> By: razmaspaz http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122237 razmaspaz Thu, 08 Nov 2007 17:22:57 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122237 I've been diversifying overseas more and more. Doesn't seem to be helping though as the Chinese markets have been getting clobbered this week too. In the long term (and isn't it all about the long term) this has to be the right thing to do, doesn't it? I’ve been diversifying overseas more and more. Doesn’t seem to be helping though as the Chinese markets have been getting clobbered this week too. In the long term (and isn’t it all about the long term) this has to be the right thing to do, doesn’t it?

]]> By: Curtis http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122219 Curtis Thu, 08 Nov 2007 13:54:36 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122219 I don't see the China thing as much of a threat. We are their largest export partner, buying more of their goods than anyone else. If they force our dollar down farther, then we won't have the money to buy their goods. They need us to have a strong currency to help keep their economy running. I don’t see the China thing as much of a threat. We are their largest export partner, buying more of their goods than anyone else. If they force our dollar down farther, then we won’t have the money to buy their goods. They need us to have a strong currency to help keep their economy running.

]]> By: Sasha http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122210 Sasha Thu, 08 Nov 2007 05:42:00 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122210 Flexo, I'd seen that quote as well but left it out for brevity's sake. Plus, I tend to discount what her agent says versus her manager. You're right about missing the investment boat, but I will confess that I'm concerned the dollar has a good bit further to fall, so I am beginning to look abroad as well. The Gisele contract story is more amusement than any widescale indicator, but I was interested in the fact that it's been right alongside all the other dollar news I've read today. Perhaps it's the bit of fluff the media needs to buoy us up from the depressing reality of what's happening to our economy. Flexo,

I’d seen that quote as well but left it out for brevity’s sake. Plus, I tend to discount what her agent says versus her manager.

You’re right about missing the investment boat, but I will confess that I’m concerned the dollar has a good bit further to fall, so I am beginning to look abroad as well.

The Gisele contract story is more amusement than any widescale indicator, but I was interested in the fact that it’s been right alongside all the other dollar news I’ve read today. Perhaps it’s the bit of fluff the media needs to buoy us up from the depressing reality of what’s happening to our economy.

]]> By: Flexo http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122209 Flexo Thu, 08 Nov 2007 05:24:59 +0000 http://www.consumerismcommentary.com/2007/11/07/the-decline-and-fall-of-the-us-dollar/#comment-122209 About Gisele's contracts, it's interesting that the article on Bloomberg itself contained an <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUdDmoYyZhdY" rel="nofollow">additional quotation</a> not included in the Seattle Times version of the Bloomberg article (which you linked to). Here's the extra quote: <blockquote>"Gisele has contracts in dollars," said Anne Nelson, Bundchen's agent in New York at IMG Models, in an interview today. "When she works in Europe she gets paid in euros, when she works in the U.S. she gets paid in dollars, when she works in Brazil she gets paid in reais [sic], and so on and so forth."</blockquote> Sounds like standard contract terms to me... though there were some harsh words from others from her camp about the dollar. Nevertheless, Gisele has no reason to stop accepting payments in USD. She can easily convert her USD receipts into foreign currency if she so desires and/or adjust her prices to correct for Fx uncertainty. Those quoted in the article seem to be pretty confident about their forecasts for the dollar's value, so adjusting fees to compensate should be straightforward. The dollar's declining and it's a good idea to hedge against further decline. Refusing to accept the dollar is not a good example of hedging because the other options are available (unless there's something about her contract preventing her from trading or raising her fees, but I can't think of what that would be). Those of us starting to think about this now -- and the media -- may have already missed the boat, but there might be time to act before other countries unload their major US investments. About Gisele’s contracts, it’s interesting that the article on Bloomberg itself contained an additional quotation not included in the Seattle Times version of the Bloomberg article (which you linked to). Here’s the extra quote:

“Gisele has contracts in dollars,” said Anne Nelson, Bundchen’s agent in New York at IMG Models, in an interview today. “When she works in Europe she gets paid in euros, when she works in the U.S. she gets paid in dollars, when she works in Brazil she gets paid in reais [sic], and so on and so forth.”

Sounds like standard contract terms to me… though there were some harsh words from others from her camp about the dollar.

Nevertheless, Gisele has no reason to stop accepting payments in USD. She can easily convert her USD receipts into foreign currency if she so desires and/or adjust her prices to correct for Fx uncertainty. Those quoted in the article seem to be pretty confident about their forecasts for the dollar’s value, so adjusting fees to compensate should be straightforward.

The dollar’s declining and it’s a good idea to hedge against further decline. Refusing to accept the dollar is not a good example of hedging because the other options are available (unless there’s something about her contract preventing her from trading or raising her fees, but I can’t think of what that would be).

Those of us starting to think about this now — and the media — may have already missed the boat, but there might be time to act before other countries unload their major US investments.

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