What Will Happen to the U.S. Dollar?
Canadian dollar surges to highest level since 1977:
It ended the day at 91.79 cents U.S., the loonie’s highest level since Oct. 11, 1977.
This made me think back to 1998-2001, when the U.S. dollar was worth CAD$1.45, then $1.50 and briefly even CAD$1.60. It seemed to be in a permanent uptrend. At the time we had about $20,000 of American money and @ $1.50 exchange rate that little pile was worth CAD$30,000.
Around 2001-2002 the current downtrend began and I got worried about US$ and just wasn’t sure what to do with the money. So I asked a friend of mine – an institutional broker who’s given me good money advice in the past – about what we should do with it. He told me to convert US$ into Euros. I believed him.
A Euro was worth about US$0.90. Converting to Euros meant either opening up a bank account in Europe or storing physical money in a storage box. That seemed like sooo much trouble. In addition, my husband was sure that the Euro wouldn’t last. See, he doesn’t believe in a unified Europe. That’s a topic for a private conversation or possibly a separate post, but the point is – we never exchanged our U.S. dollars into Euros. It was like: “a lot of trouble for what?” who knew that it would all happen the way it did. “Hindsight 20/20” and all that jazz. (2 cliches in one sentence, try beating that)
If I had followed my friend’s advice, today we’d have approximately 22,000 Euros, or $32,705 Canadian dollars at the current exchange rate. Instead, US$20,000 is worth approximately $22,000 Canadian. So we lost about $8,000 before inflation. Not to mention that the taxes on our US$ income were paid at a higher exchange rate. Laziness is expensive.
We didn’t literally lose that money because over the years we bought stuff from the States on a US$ credit card. We spent about $7,500 and still have about $13,000 left.
And I’m still not sure what to do! I didn’t listen to my friend then, but I’m listening to all and any opinions now. What should we do with our U.S. money?
I’ve found that trying to predict cross-country conversions is an exercise in futility, so I don’t bother to try to capitalize on it anymore.
ps: Regarding cliches, try this on:
There’s No Fool Like an Old Fool and His Money are Soon Parted.
Oh it’s totally unpredictable. And Forex scares the hell out of me, I’d never try capitalizing on currencies. Just would be nice to not ‘lose’ any more money like that 🙂
Phantasmix,
Given the current state of the U.S. economy and the contrary state of the Canadian economy, most analysts predict further depreciationin the U.S. WHile i know analysts are wrong a good chunk of the time, from an economic perspective- with some countries decoupling their currencies from the U.S. (eg.Kuwait) and others tightening their monetary policies.. the deteriorating fundamentals of the american economy foretell one thing to me…you’re better off invested in currencies other than the american dollar.
Dear Miscellaneous
My wife and I are dual citizens of CND and USA.
We lost a small fortune in the stock market in 2000 when Bush was elected. We were in a third world country and lost phone and internet service for more than a month and were unable to sell. We lost around $30k. It would have been more but the market came back in 2005 and I got completely out of the markets. The stock market I am convinced is for the supper rich to steel the pocket change of average joe. Realestate is the way to go. I recently bought U$130k from Canadian at .92 per dollar. I am kind of bitting my nails hopping that the exchange rate goes back down to get back into Canadian Dollars. Alberta beef, etc is sold in the states mostly even though Canada is finding new markets for various products. China and the states are compeating for Alberta oil. There are so many minerals in Canada, yet the government is not developing these things but rather settling for pennies and sinning these things over to multinational companies who make most of the money. All that to say that our Canadian economy is very dependant on the USA. The whole world is dependant on it. Wall Mart has gone into joint ventures with China to build a port in Mexico to bring goods into the usa. China sells all over the world but the USA is a major part of their export. I believe that there is a plan in place to unite Canada the USA and Mexico. The people dont want this but the elitists do. They will cause a crisis or take advantage of one in order to scare the Americans into accepting this idea. Canada has already signed on even the people dont know it. Therefore because of Canadian oil and the small population canada is the place to put your money. Put your extra cash into paying off your house and car. There is no better investment than to be totally debt free. Then all the interest you are paying now will be cash in hand. Use that to buy property or valuable, tangeble items that can be sold or traded. The states are going to crash real soon because of debt. You cant go wrong getting out of debt. The USA is not going to disappear but the dollar cant be propt up again like it was in the 80s.
No matter what happens the bible says that there will buying and selling until the last day. The USA appears to be on a coarse of bank ruptcy. Then those who are solvent buy up the deals. You cant do that unless your out of debt. China wants more raw materials than Canada can ship to them. That gives Canada a positive cash flow.
Pay off your home, etc. Any interest you are paying will be money in your pocket. Any tax deductions you can get buy borrowing money is a joke. It only works for the supper rich and the dishonest. Use your money to get out of debt. If you have not debt. Relax, its all in Gods hands. All these things must take place. If you have faith in Jesus there are no worries. If your faith is in the almighty dollar then you will never have enough.
Invest in Canada by paying off your home
Cheer for the Edmonton Oilers.
Put your faith in Jesus to be saved.
God bless
Dan