On the pro side of a bottom is my belief that Europe and UK will begin cutting in earnest this summer (UK cut another 25 basis points today) to stave off recession - thus beginning to weaken their own currencies in relation to the US dollar.
On the con side is the continuing bad decisions by US govt to build bigger and bigger deficits, and give out rebate checks and bailouts when we cannot afford it; along with a potentially "bigger" government if Dems wins, means even worse structural issues are coming down the pike. Plus we're not done cutting rates here either - 2% Fed funds looks more than likely and maybe below...
So I'm torn on just how atrocious the dollar will get - will be putrid or ....deathly putrid? Either way, funny anecodotal stories popping up as I mentioned in another post today... by funny I mean pathetic and sad. But at least Disney (DIS) theme parks, Las Vegas casinos, the real estate market in Manhatten, and stores in NYC are benefitting from the putrid US currency as foreigners invade the country, laughing it up at how they can buy American things so darn cheap! :)
- In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise.
- "We had decided that money is money and we'll take it and just do the exchange whenever we can with our bank," Robert Chu, owner of East Village Wines, told Reuters television.
- The increasingly weak U.S. dollar, once considered the king among currencies, has brought waves of European tourists to New York with money to burn and looking to take advantage of hugely favorable exchange rates.
- "We didn't realize we would take so much in and there were that many people traveling or having euros to bring in. But some days, you'd be surprised at how many euros you get," Chu said.
- "Now we have to get familiar with other currencies and the (British) pound and the Canadian dollars we take," he said.
- While shops in many U.S. towns on the Canadian border have long accepted Canadian currency and some stores on the Texas-Mexico border take pesos, the acceptance of foreign money in Manhattan was unheard of until recently.
- Not far from Chu's downtown wine emporium, Billy Leroy of Billy's Antiques & Props said the vast numbers of Europeans shopping in the neighborhood got him thinking, "My God, I should take euros in at the store."
Speaking from Michigan, in past years people didn't want Canadian currency because it was essentially 70 cents on the dollar, maybe 80 cents. Now its par or greater. So it is now cool to have a Loonie. Sad. And yes it helps the small sliver of our economy that is export based, but it hurts us in so many other ways and I can't recall any great empire thriving with a weak currency.
