Yen-vs-Dollar

Discussion in 'Economy' started by hortysir, Mar 19, 2011.

  1. hortysir
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    hortysir In Memorial of 47

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    I'm always the first to admit that I stink at Economics, so I pose this question to those more learned than I:


    We all are painfully aware of the trouble our Dollar is in.

    Though I haven't heard much comparison in recent years, I do recall much ado about the Japanese Yen against our Dollar.


    Given this recent tragedy in Japan, will it hurt or help our Dollar?


    :confused:
     
  2. konkon
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    konkon Member

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    The US dollar is going to head downwards in the long run and it will only head up if the Fed lifts rates. If some had their way it would go down a further 20% from here in the long run.
     
  3. hortysir
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    hortysir In Memorial of 47

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    It's going to do that all on it's own, with how our Fed is treating it.

    I was curious as to what impact any fluctuation in the value of the Yen would have.
    Will it speed, slow, stop, or reverse the dive of the Dollar?
     
  4. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    I've been wondering about this. Things to consider:

    - After the Kobe quake, Japan repatriated cash in order to rebuild, and the dollar devalued against the yen from 100 to 80 yen:dollar.

    - Both countries have massive levels of debt relative to GDP. The Fed keeps increasing the money supply in an ultimately futile attempt to keep interest rates low and stimulate the economy. The Japanese debt is 200% of GDP; they will likely increase their money supply to address rebuilding.

    I'm still chewing on where it will go (I need to hedge some yen based business) - but am inclined to think the yen will deteriorate for awhile.

    Of course, if currency forecasting were my strong suit, I'd be an Evul Billionaire Currency Trader.

    ;)
     
  5. hortysir
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    hortysir In Memorial of 47

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    So if/when the Yen does deteriorate, as you called it, will that boost our Dollar?

    And 200%?!
    :eek:

    Really?

    And, from what I saw scrolling across my screen yesterday, we're afraid of ours climbing to 89% by 2021???
    :confused:

    I guess, in relative terms, that's alot.
    It took Japan (how many?) thousands of years to get there.
    We managed to get halfway in under 300
    :clap2:
     
  6. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Yes, if the yen deteriorates, it devalues against the dollar, and the dollar is relatively stronger. Of course, both currencies may also deteriorate against other ones.

    Our debt is already 100% of GDP, bub.

    U.S. National Debt Clock : Real Time
     
  7. hortysir
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    hortysir In Memorial of 47

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    Okay, "gal" :razz:

    Thanks for that clarification.
    (told ya I suck at econ)

    Not sure what it was I read, then.... :redface:
     
  8. Norman
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    Norman Gold Member

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    ONLY, in the sense that it might hurt yen as the bank of japan is printing loads of money thus decreasing the interest earned in japan(without this it would be other way around). Making people perhaps prefer the dollar.

    The bad thing is, japan is invested quite heavily in US bonds, and they may be selling them in order to spend themselves. This is negative for dollar, as it means the debt has to be perhaps printed or taxed (then again, at some point we are expecting that anyway - but short term speaking). For export sector it would be positive in USA... BUT, I doubt that is what is going to happen as the global economy is so F** up.

    Then again, it seems like japan is foolishly not selling their bonds. Which is very bad choice IMO. They have very good growth expectation in their country as the tsunami just wiped a lot of stuff out, and they already know how to rebuild it, while in USA it doesn't look quite as good.
     
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    Last edited: Mar 21, 2011
  9. Norman
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    Norman Gold Member

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    If FED lifts rates, US is screwed as the government can't service the promised services. Which means a lot of angry people electing an angry leader :lol:

    So at this point as far as I am concerned, the dollar is trash in any case. Even for short term speculation euro is much better choice, though I would not necessarily try to speculate if Lusitania or Titanic sinks faster. Though just maybe you could make a quick buck now as I think the ECB may really lift rates at least temporarily.

    Fed on the other hand... I doubt they will fool anyone. :lol:
     
  10. william the wie
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    william the wie Gold Member

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    The Yen is only about 150 years old. The current US dollar a bit over 220 years. In 1931 the exchange rate Y1.92 = $1. Japanese debt is almost all post-WWII debt.
     
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