All Things Economic

[quote=windowShopping7]So the dollar is getting weak. If the dollar is weak what does that do to the bond market?

I may be wrong but doesn’t that mean that we lose buyers for our debt?[/quote]It makes US bonds more expensive for foreign investors. 32% of US bonds are held by Japan and China. All world banks hold them. So the falling $ makes them less attractive. Throw in the negative light the US is currently perceived in by the other countries of the world and the sell US efforts. throw in our high debt and political divide makes us less stable then we have before therefore US bonds are remaining under pressure and we are having to sell them with higher yields ie our debt is at higher interest rates as you will

So the dollar is getting weak. If the dollar is weak what does that do to the bond market?

I may be wrong but doesn’t that mean that we lose buyers for our debt?

The Dollar Index is a weighted index of the US dollar against a number of other significant currencies, such as the Euro, Yen, $Cdn, UK pound, etc. That way you can separate the health of the US dollar against currencies generally rather than in isolation.

1 year ago we were at 107.5

Today we are at 96.50.

That's a 10.2% drop relative to other major currencies.

[quote=windowShopping7]Is it true that the value of the dollar has declined by 9%?[/quote] When we went to Mexico in November, the dollar worth a about 18.5 pesos.

When we went last weekend, it traded as less than 17.

That's about an 8% devaluation in 90 days.

Against the peso...

[quote=spoonerpa]Just for fun I ran the calculation from 1776 until today. This is what the program indicated:

$1 in 1776 is equivalent in purchasing power to about $37.26 today, an increase of $36.26 over 250 years. The dollar had an average inflation rate of 1.46% per year between 1776 and today, producing a cumulative price increase of 3,625.54%.

This means that today's prices are 37.26 times as high as average prices since 1776, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 2.684% of what it could buy back then.

Now that explains a lot. I'm glad I will not be here in another 250 years to see how bad it gets. LOL[/quote]Don’t go anywhere just yet

Just for fun I ran the calculation from 1776 until today. This is what the program indicated:

$1 in 1776 is equivalent in purchasing power to about $37.26 today, an increase of $36.26 over 250 years. The dollar had an average inflation rate of 1.46% per year between 1776 and today, producing a cumulative price increase of 3,625.54%.

This means that today's prices are 37.26 times as high as average prices since 1776, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 2.684% of what it could buy back then.

Now that explains a lot. I'm glad I will not be here in another 250 years to see how bad it gets. LOL

[quote=windowShopping7]Is it true that the value of the dollar has declined by 9%?[/quote]I hope this helps WS8:

$1 in 1960 is equivalent in purchasing power to about $10.95 today, an increase of $9.95 over 66 years. The dollar had an average inflation rate of 3.69% per year between 1960 and today, producing a cumulative price increase of 995.01%.

This means that today's prices are 10.95 times as high as average prices since 1960, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 9.132% of what it could buy back then.

Is it true that the value of the dollar has declined by 9%?

[quote=mayhem8]With the way things are going, everything I'm seeing is saying that you'll be penalized for saving money because the money you save will be worth less going forward. The current strategy of trying to keep both inflation and fed rates low seems almost guaranteed this will happen with what the federal deficit has grown to. An increase in either inflation or the fed rates would seem to have a negative impact on the deficit

Losing buying power was likely always the case when it came to bank savings/checking accounts. There are accounts with investment firms like Fidelity that let you park your money someplace that was keeping up with inflation, but there is a lot of data suggesting that you'll lose more than you gain from that and saying the stock market is the only place where you can keep pace with true inflation.

One other safe short-term bet was t-bills, but with holding things down, it will also limit their yield. Anyway, just curious if others are thinking about this and what plans (if any) they're looking to do to stay ahead of the game or if they see any major changes in the economy that will help mitigate a devalued dollar.[/quote]Ray Dalio's the Changing World Order would be a good read/watch for you mayem8. He's recommending having at least 10% of your portfolio;io in gold and broaden exposures internationally. Gold is projected to go up another20%. Why? the worlds central banks are selling US assets. Why? We are too in debt and have become a questionable place to invest. T-bills used to be considered THE safe have assett but not as much anymore. I have T-bills BUT in an ETF that sells call options and pays a 14-15% dividend that I reinvest. Also have two PIMCO income funds currently paying 11% and 14.35%. I reinvest these dividends too.

Now $ are losing values and hence all $ dominated asserts. If you are in cash play it like Buffett. Wait for a bear market and the buy quality growth stocks when everybody is scared. In that environment T-bills will regain interest as there is really no other currency that can challenge the $ being the worlds reserve currency. That will increase demand for them as peeps flood out of equities. Timing when to switch from safe havens to equities is the trick. You'll never get it exactly right but waitin until the market craters 20+%, you are going to do better than the buy and hold crowd.

LMAO

Can we count the gold already ?

[quote=Someonescoming]What am I reading wrong? Gold is priced a $4,766.20 and ounce. Where are you hearing $7 trillion loss?[/quote]combined gold and silver losses this past Friday

Gold was down about 10 percent, silver down 20.

7.4 Trillion, with a T.

That’s about how much was lost in the silver and gold markets this past Friday.

Heck, pretty soon they’re gonna be talking about serious money.

"With the way things are going, everything I'm seeing is saying that you'll be penalized for saving money because the money..."

Avoid the penalty, send it to me.

:-)

With the way things are going, everything I'm seeing is saying that you'll be penalized for saving money because the money you save will be worth less going forward. The current strategy of trying to keep both inflation and fed rates low seems almost guaranteed this will happen with what the federal deficit has grown to. An increase in either inflation or the fed rates would seem to have a negative impact on the deficit

Losing buying power was likely always the case when it came to bank savings/checking accounts. There are accounts with investment firms like Fidelity that let you park your money someplace that was keeping up with inflation, but there is a lot of data suggesting that you'll lose more than you gain from that and saying the stock market is the only place where you can keep pace with true inflation.

One other safe short-term bet was t-bills, but with holding things down, it will also limit their yield. Anyway, just curious if others are thinking about this and what plans (if any) they're looking to do to stay ahead of the game or if they see any major changes in the economy that will help mitigate a devalued dollar.

Drove to Arizona and back yesterday.

Before I left, filled up at $3.97.

When i got to Yuma, i topped off at $2.69.

People tend to forget that gas prices tend to drop when gas stations switch from their summer to their winter blends. The local stations by me are around $2.7x a gallon.

A better indicator of fuel gouging is heating oil prices this time of year. Currently they are around $3.10, which isn't bad for being in the heating season. It's still not great when you're paying more for heating oil than you are for gasoline, when you consider it has the over-the-road taxes tacked on to the cost of making the fuel. Heating oil, like diesal is cheaper to make than gasoline.

Yeah, I know, supply and demand. Just like that $15 cup of beer at a baseball game, it doesn't make it suck any less.

Good news

When visiting friends/family in Pa, we usually try to get gas in NJ. It's even cheaper in Md than Pa, and that's not saying much. The Mrs's car has about a 450 mi range on a full tank, which is decent.

[quote=funfor2houston][quote=spoonerpa][quote=windowShopping7]I haven’t seen it drop below $3.15 this year but I’m in Fairfield County. Everything costs a bit more in this part of the state. The average in CT is supposedly 2.99.

Why is it that Amazon wears our roads to shreds yet doesn’t pay for our infrastructure Spooner? I think these monopolies should have to pay their share.[/quote]Well WS7, they put the tax on fuel here in PA so anyone filling up in PA pays for the roads and bridges. It is just like anyone that drives on the Turnpike pays for the upkeep of that road. I get more ticked off when the use the gas tax or turnpike fees for other things like building bike trails or to subsidize metro area bus services.[/quote]Paying 2.14 a gallon in Texas yesterday. . …. CT and PA. Are rich people , they don’t mind paying higher taxes.[/quote]I will not speak for WS7, but I will let you know there are people (like me) in PA who do mind paying more taxes. LOL

Cheapest gas in my neighborhood is $3.99. I am in a major tourist area, about 10 minutes from the ocean, and about the same to downtown and the airport.

If I travel about 20 miles east , I can find it for $3.49.

FunFor2 - "Well , there be no offshore wind leases . This has to do with the instrumentation of the ships and radar used along our coasts . I had heard this about a year ago from Gulf fishermen."

Europe already solved most of this. The solutions are known. The U.S. debate is more political than technical.

[quote=owcangrace][quote=funfor2houston][quote=owcangrace]@someone - so can we get your source(s) on your claims referencing wind turbine blade life?[/quote]I have no clue how long these blade last but I promise you one thing . If you go to Galveston Texas you see those blades coming and going everyday. . Our highways are plugged up with those things being hauled . They aren’t small.[/quote]I bet they are because even in oil country their usage is going up double digit each year and as mayhem mentioned on efficiencies, ocean placements up 53%. The changes are and will take decades. Take the automobile. It started as a rich man's toy and took at least 50-70 yrs before car ownership peaked. That's why a short range view based on current conditions/technology is short sighted and frankly ridiculous to me. Our world is dramatically different than 50 yrs ago and the it will be dramatically different 50 yrs from now[/quote]Well , there be no offshore wind leases . This has to do with the instrumentation of the ships and radar used along our coasts . I had heard this about a year ago from Gulf fishermen . This is good news , those things look hideous.

[quote=spoonerpa][quote=windowShopping7]I haven’t seen it drop below $3.15 this year but I’m in Fairfield County. Everything costs a bit more in this part of the state. The average in CT is supposedly 2.99.

Why is it that Amazon wears our roads to shreds yet doesn’t pay for our infrastructure Spooner? I think these monopolies should have to pay their share.[/quote]Well WS7, they put the tax on fuel here in PA so anyone filling up in PA pays for the roads and bridges. It is just like anyone that drives on the Turnpike pays for the upkeep of that road. I get more ticked off when the use the gas tax or turnpike fees for other things like building bike trails or to subsidize metro area bus services.[/quote]Paying 2.14 a gallon in Texas yesterday. . …. CT and PA. Are rich people , they don’t mind paying higher taxes.

[quote=spoonerpa][quote=windowShopping7]I haven’t seen it drop below $3.15 this year but I’m in Fairfield County. Everything costs a bit more in this part of the state. The average in CT is supposedly 2.99.

Why is it that Amazon wears our roads to shreds yet doesn’t pay for our infrastructure Spooner? I think these monopolies should have to pay their share.[/quote]Well WS7, they put the tax on fuel here in PA so anyone filling up in PA pays for the roads and bridges. It is just like anyone that drives on the Turnpike pays for the upkeep of that road. I get more ticked off when the use the gas tax or turnpike fees for other things like building bike trails or to subsidize metro area bus services.[/quote]Lol they’re building the longest trail in the state through my hometown. Are you begrudging my little village some tourism Spooner? I’m heartbroken! : (