# Dollar Index is dropping



## BillS

http://www.bloomberg.com/quote/DXY:CUR

http://www.marketwatch.com/investin...=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013

The Dollar Index is below 80 for the first time since February 6th. It's at 79.82 at this moment. During the last year It peaked at 84.58 on July 24th. It's down 5.6% over the last 39 days. At the rate it's dropping it'll lose half it's value in less than a year.

The Dollar Index is important because it's the only market not rigged by the government. The Fed uses short selling to manipulate the gold and silver markets, for example. And of course, the Fed manipulates the bond market by buying as many as necessary to keep interest rates down. And the Fed created the housing bubble with artificially low interest rates.

In the last 10 years the Dollar Index hasn't been below 70 or above 90. At some point I expect it to drop enough for foreign investors to get nervous and dump their dollars. That's when the real trouble for the dollar will begin. According to an article on Zero Hedge 1/15 of the dollars in existence are held by individual investors in Argentina alone.


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## biobacon

Gee if only some one had seen it coming LOL


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## invision

Yep, and when you see OPEC decide to price in a secondary currency it will essentially be over for the USD... If it drops to 70, I think you will see action from them... Just my humble OP


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## BillS

invision said:


> Yep, and when you see OPEC decide to price in a secondary currency it will essentially be over for the USD... If it drops to 70, I think you will see action from them... Just my humble OP


And that's the real danger. When OPEC dumps the dollar so will every country that currently buys dollars to pay for oil. Countries will buy whatever they can with their dollars--such as real estate, commodities, or stock. Those dollars will end up flooding into our economy and the value will drop like a rock. I think the value of the dollar could go from relatively normal like today to almost worthless in a matter of a few weeks or a few months.


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## invision

BillS said:


> And that's the real danger. When OPEC dumps the dollar so will every country that currently buys dollars to pay for oil. Countries will buy whatever they can with their dollars--such as real estate, commodities, or stock. Those dollars will end up flooding into our economy and the value will drop like a rock. I think the value of the dollar could go from relatively normal like today to almost worthless in a matter of a few weeks or a few months.


It sure could... And funny thing is when I was talking to a C-level as asset firm, he said it makes total sense to drop USD from oi for China's currencyl... And this is the guy that is moving out of country soon...


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## invision

Dropped again today, 2 cents away from .70 on broader market... http://www.marketwatch.com/story/do...stalemate-2013-10-03?link=MW_home_latest_news. Oct is gonna be fun, maybe why Sept is National Preparedness month, hmmm?


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## BillS

Earlier in the month the dollar index finished below 80 for only two days before it went back up.

Then on October 17th it dropped 82 cents to 79.65. Then it rose slightly over two days to 79.69. Today it dropped 44 cents to 79.25. It dropped 35 cents over a period of 10 minutes at about 8:30. This is now the fourth day in a row below 80.

People talk a lot about the dollar eventually losing its status as the world's reserve currency because of China's agreements with other countries to trade in their own currencies. Yes, that's very important. But that could start with individual investors dumping their dollars for gold or yuan or Swiss Francs or anything except dollars. 

I've been watching the dollar index every day. I'm most concerned about the possibility of seeing more and bigger drops in the dollar index. Especially since the debt limit fiasco last week. That should wake up foreign investors to the idea that the US isn't going to cut spending, balance the budget, or stop printing dollars. Who in their right mind would own dollars if they had a better convenient choice?


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## biobacon

BillS you are truly one of the people on this site that presents a logical and researched reason for why we do what we do. I often find myself learning something from you. Thanks for the info.


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## biobacon

For those that might be wondering about the dollar index

http://en.wikipedia.org/wiki/U.S._Dollar_Index


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## Hooch

ive been watchin close too..been dropping steady. I heard BRICS nations are no longer using the dollar for trade ..well that's rather oldish news but whats new is they are now gettings rid recently of their holdings since the budget fiasco...interesting..


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## Country Living

I came across a jar we had stashed in the back of a drawer that had Euros, Pounds (and smaller), and Turkish Lira. A couple of years ago my response would have been "oh crap"..... now it's "jackpot!"


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## BillS

Probably the most important news about the dollar is the recent currency agreement between China and the EU.

http://news.xinhuanet.com/english/china/2013-10/10/c_132786974.htm

China, EU agree to 45 bln Euro currency swap

BEIJING, Oct. 10 (Xinhua) -- China has signed a 350-billion-yuan (45 billion euro) currency swap agreement with the European Union, marking a major step in internationalizing its currency.

The deal, signed between the People's Bank of China (PBOC) and the European Central Bank on Wednesday, aims to support bilateral trade and protect financial stability, according to a statement on the PBOC website.

The agreement lasts three years and can be extended if both parties agree, it said.

"The new arrangement will provide more liquidity to the renminbi market in the euro area, promote overseas use of the yuan, and help facilitate trade and investment," the statement added.

So far China has signed currency swap deals totaling 2.2 trillion yuan(358 billion U.S. dollars) with 22 countries and regions to push the international use of its yuan.

On Oct. 1, China signed a 100-billion-yuan currency swap agreement with Indonesia and signed similar agreements with Hungary and Albania in September, bringing China closer to making its currency fully convertible.

The agreement with the EU indicates that China has signed currency swap deals with developed nations instead of neighboring and developing countries.

"The deal with the world's second-largest currency regulator means the increasing international recognition of the Chinese yuan," said Zong Liang, deputy chief of the Strategic Planning Research Institute under the Bank of China.

In September, the yuan jumped to ninth in the latest survey by Bank for International Settlements on foreign-exchange turnover, with its daily trading more than tripling to 120 billion U.S. dollars from 34 billion U.S. dollars three years ago, when it was ranked the 17th most-actively traded.

"The global increasing need for renminbi transactions is a natural choice as the Chinese yuan has a stable exchange rate and is more risk-proof," according to Guo Tianyong, a financial studies professor with the Central University of Finance and Economics.

Meanwhile, the deal will expand renminbi-based settlement, reducing reliance on the U.S. dollar, which can hedge against the risk of U.S. possible debt default, Guo added.


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## cnsper

Sounds like it is a good time to invest in some foreign currency.


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## Hooch

my brother spent 22 years in the Navy. Everytime he went to another country he would collect me a few bucks worth of that countries currency usually in coins, postcard and a trinket now and then.

He got me an alarm clock that was shaped like a shrine that sang the arabic morning prayer song.."alahhhh!...alahh!! alahh!...alahhhhhh!!!! derka derka jehahd ac'choo"...lol well sorta sounds like that I guess...and so loud that'd wake the dead...

Anyways..I really liked the coins just for the neeto look at this conversation piece but the way the dollar is fallin they just might come in handy someday...


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## BillS

cnsper said:


> Sounds like it is a good time to invest in some foreign currency.


Do your research carefully. Central banks around the world are flooding their own countries with currency too. All in the name of not wanting their exports to be too expensive.


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## jsriley5

liking my Silver not at all interested in other paper from other countries. Thanks for the like to the explaination as I ran across it I was rushing to the end so I could ask for a dummies explanation of the numbers


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## roselle

jsriley5 said:


> liking my Silver not at all interested in other paper from other countries. Thanks for the like to the explaination as I ran across it I was rushing to the end so I could ask for a dummies explanation of the numbers


Sold my silver to pay for the ole divorce attorney. My children called her a "financial vampire." HeeHee! My kids and I did pan for gold in our creek. Everyone said gold has never been found here! We just said "Not yet!" Was fun.....Still no gold...No silver anymore either....No matter! Maybe our non-GMO veggies will be worth gold one day!


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## BlueShoe

Bill, there was no Oct crash either.


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## BillS

The day is still young!


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## BlueShoe

Hey, if it happens in a month, we'll call it close enough.:beercheer:


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