August 3rd, 2008 | by RichSage
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Category: INVESTING
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Rich Sage
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I’ve been watching the groanings in the last bit, and the US nation is fully tanking. But why does the value of the US dollar continually rise?
I imagined that when the Fed printed more greenbacks, that would devalue the US dollar, causing it to drop.
The only situation that I can comprehend of is that possibly other countries are devaluing their own currency so as not to nullify their exports to the USA? (I got the idea listening to a administrative argument on Canadian tv)
Any opinions?
Hi,
When it comes down to it, the “greenback” retains a lot of value as a “safe haven” at times of distress.
The reason the dollar has gone up in the past few weeks is simply because other currencies are experiencing the same problems (as their own banking institutions are ‘tanking’), and in that atmosphere the US Dollar looks better, more investments are coming to the US, and more demand is created for US Dollar based securities –Creating more demand for it.
Also, keep in mind that a lot of money ‘drifted’ to commodities over that past year, and now with commodities prices are ‘folding’ those monies need to find a safe “place to park”.
Lastly, there is a huge number of people predicting “doom and gloom”, but these are people who by nature have been pessimistic for a long time. We are going thru a harsh economic cycle, which will start a new trend after clearing a lot of garbage from the 90’s and this decade.
The US Dollar will again reach a strong period as it’s the worlds best currency based on the strength of the Government record, since that’s all that “backs” the currency.
RS.