Stromprophet on 10 February 2007
rendo said:
The USD has lost a lot of it's value in the last 2 years. The Canadian dollar is up to 85cents for it's dollar into the US, when a few years ago it was barely above 70. Strong economy? Not as strong as you'd like to think.
The USD has been in a long term downtrend for more than 30 years. It's obvious to me you know nothing about economics or money.
The US dollar is invested everywhere in the world, that's why America owns interests outside of the US so it doesn't have to depend on it's domestic economy. Companies like Caterpillar (which I work for as a design engineer) who get 50% of their income from Overseas but are still good old American homegrown companies.
Every american worker who has a 401k or IRAs is invested more and more in foriegn economies, we have massive mutual funds that are funded by 401k mostly for average american workers, and most of them are invested 20% if not more in Foriegn markets, this prevent your dollar from declining because you get the advantage of currency appreciation from other companies.
And if you invest in American companies domestically it's not bad either because most american companies are dominating other markets and get the benefit of currency exchange when they go back to US dollars and then this makes their stock go up and you benefit as an investor.
American GDP is still 38% of the worlds economy. Of course we can't hold that forever, who can. Frankly, I don't mind the currency of other companies going up, Americans have been the worlds purchases of all products for too long. If the dollar goes down and we keep interest rates appropriate then manufacturing that has been outsourced will come back and we will be able to ship products to other countries, as opposed to now when a lot of countries ship their products to america to be sold.
I will still have more net value than anyone from Europe of Canada because I don't have to pay a 50% tax rate making (20,000) a year. And my employer covers my healthcare. Also if you are smart and invest in things like precious metals and other commidities, like oil, etc. You will get appreciation for the value of those assets regardless of what currency you invest with, the outcome of the appreciation will be the same and it will protect your money.
Canada and Europe are almost laughable because not matter if your are even poor you still have to pay a 50% tax on your income. What a joke. When's the last time anyone even referred to Canada when talking about global news???
Japan, EU, China, India, Germany, England, Russia, US sure. But no, Canada is never mentioned because it's 30 million people who basically have almost no say in world affairs. Sinking like a rock? The market was up 15% last year on par with almost all Europes markets. The only ones it was way behind were Russia, China, India, Venezuala. Because those markets are appreciating for reasons outside the scope of a fully developed economy.
Just like any growth stock will eventually have it's growth decelerated. Google for instance, has great fundamentals but is now maturing and not achieving the accelerating growth it once had.
Most world investors still put the majority of their money in Dollars becuase it's the safest money out there. And the top companies in the world are almost all american founded and american based, I'm not worried. Microsoft, Google, Exxon Mobile, etc, etc. Heck, even Toyota now has most of its operations here in the US even though it's not a US company. They will probably move their headquarters here one day.
