How much more value can the USD loose against other major currencies?

What is the effect on China and India whose major exports are to the US (USD denominated) and imports are energy whose costs are seriously increasing ... Asked by yankee 51 months ago Similar questions: USD loose major currencies Business.

Similar questions: USD loose major currencies.

We are in grave danger unless the Fed does something fast COuntries are now calibrating their currencies against the Euro instead of the dollar. I fear us losing any more value because I don't know how fast this economy could recover from the inflation. ABC News provides a healpful analysis of the situation pertaining to your question, though:"What Does This Mean in the U.S.? The news is mixed.It's good, because it makes what we produce here cheaper to sell in foreign markets, and that in turn spurs exports of our products around the world.

That translates into more manufacturing and more jobs. For example, BMW and Mercedes Benz want to build cars in the United States, because they can do it cheaper in nonunion states than in Germany, where they'd pay labor and parts in euros, and then bring the cars to the United States, where they would be too expensive to sell at a profit. Story $5 Bill to Have Splashes of Purple, GrayBut a weak dollar is bad, because it leads to inflation in this country.

Imports from foreign countries will become more expensive, and in particular, oil will be more expensive. That puts pressure on businesses to increase prices for anything that uses oil or products that come from overseas. One benefit for American shoppers is that China has largely pegged its currency to ours, so that keeps the price of Chinese-made goods low and therefore, keeps a check on inflation.

U.S. Treasuries, Bonds, Mortgages, Stocks What does a weak dollar mean for all that, and why should I care? If the dollar falls too much, foreign investors and banks won't be so interested in buying T-bills and bonds that keep the U.S. government and businesses humming. That's because the interest rate might not be enough to compensate for inflation.

In other words, whatever is earned would be worth less money. To attract buyers, the T-bills and bonds will sell for less and have higher interest rates. And since many mortgages are tied to these interest rates, that might mean mortgage rates won't drop anytime soon.

Also, a weak dollar might scare away foreign investors who don't want to own stock in U.S. companies. What About Foreign Investors? Could there be a wholesale dumping of U.S. dollars by foreign governments and investors?

Maybe. But that would be executing a sort of "nuclear option." If China were to dump its reserves of dollars into currency markets, that would dramatically lower the value of the dollar.

All those bonds and T-bills that the country holds would drop in value, as inflation would erase any gains from the investment. China would be less able to sell its goods to the United States because the dollar would be too weak, and Chinese products would be more expensive. If Saudi Arabia were to call for oil to be traded in euros, "that announcement would be the end of the U.S. dollar," said Ashraf Laidi, chief currency analyst at CMC Markets.

But he said that would never happen as long as the United States and Saudi Arabia are allies, and the U.S. continues to negotiate arms and other deals with the world's largest oil producer. " Sources: http://abcnews.go.com/Business/MarketTalk/Story?id=3629796&page=2 .

Hard to say how long First of all, the effects on China shouldn't be that big, because most goods they need is payed in dollars as well, so the change-rate itself doesn't have any effect. For regions like Europe with another strong currency it even has positive effects on the energy-costs because oil and gas are payed in dollar so in the end within the european market oil becomes more cheap than expensive. I think there are two things that can happen: Oil will be sold in Euro as well and credits are no longer given by the worldwide market.

The moment the first oil-producing countries start to also sell oil for Euro will be the beginning of the end. The Iraq was already doing this before getting invaded (leading to a couple of conspiracy theories). If the demand of dollars (as it is needed for being able to buy oil) is decreasing, this will let the dollar fall down even more.

The second thing is that the US-economy is based on credits to be able to finance the consume of the people. Many credits are given by foreign banks, which lead to the effect that not only the interest-rates raises the credit-value but also the value of the currency. With dollar losing value there might be the moment where new credits are not given anymore which will lead to much much more problems than already seen with the breakdown of the recent mortgage-crisis.

Sources: My opinion .

It could lose all value, and cause great distress around the world. Of course this happening is highly improbable, and unlikely, the USD could lose ALL value. Like any currency that is not based on the gold standard, the dollar can gain and lose value to the point of 0.

Of course even currency based on the gold standard could do this too (provided that at some point gold became worthless), however this is even less likely than the previous scenario. If by some horrible yet nearly impossible chance the United States Dollar lost all value, chances are China, India, and well the entire would would feel the crunch. Total devaluation of the dollar would mean a complete collapse of the U.S. economy, and of course this would most likely mean that the worlds economy would soon follow.

Have no fear though, because it's probably more likely that aliens will land in your back yard to sing bad renditions of show tunes than a complete collapse of the dollar. Sources: It is my opinion that in theory that the USD can lose all value.

US$ can lose lots more value vs. other currencies, as long as balance of trade remains negative. We'll know that the... ... tipping point has been reached when China starts selling its huge hoard of US Treasury Bonds. At that point, we’ll be in a heap of trouble if we're still dependent on foreign sources for our energy!

Sources: personal opinion -- i'm not an economist, but I play one on the InterNet .

1 I expect a lot and think foreign stock investments to be good. If you can not beat them...

I expect a lot and think foreign stock investments to be good. If you can not beat them...

Read below. " "What is the best language to learn for an International Business Major?

What can I do w/a business administration and management major.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.