Value of the U.S. Dollar

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Do most people actually understand what gives the U.S. dollar value? Why do you want your business to accept dollars? Do you have a choice? Are people actually interested in knowing these things (if they don't already)? Most are out here trying to earn U.S. dollars with their businesses I presume. I'm curious simply because I have asked some people this question recently and they were unable to answer. Actually they looked at me like a deer caught in headlights, and one said the thought had never even crossed his mind.
#dollar
  • Profile picture of the author Quentin
    I would love to accept gold but unfortunately most countries accept US dollars as the global currency.

    It may not be this for much longer but at this point in time it is and so that is why we deal in US dollars.

    Q
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  • Profile picture of the author celente
    I have switched everything back over to AUD in my merchant accounts.

    I know what is goign to happen to the US Dollar. I do not have to spell it out for you hear. You will see what happens. You already probably know subliminally what is going to happen to it, if you watch the news and understand a bit about the economy.

    This is only the start of the US collapse. Do not expect things to get better. But hey, I just gave away a massive tip. Of where alot of the money still out there is going to go.
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    • Profile picture of the author Joseph Robinson
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      Originally Posted by celente View Post

      I have switched everything back over to AUD in my merchant accounts.

      I know what is goign to happen to the US Dollar. I do not have to spell it out for you hear. You will see what happens. You already probably know subliminally what is going to happen to it, if you watch the news and understand a bit about the economy.

      This is only the start of the US collapse. Do not expect things to get better. But hey, I just gave away a massive tip. Of where alot of the money still out there is going to go.
      I sure hope you are wrong. When it comes to the U.S., I like to believe that it ain't over 'til its over. Of course, can't go further in depth on the topic (that involves a lot of political crap); but don't count out the dollar just yet. Things could be a lot worse than they are.
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      • Profile picture of the author spideysteve
        Originally Posted by Joe128139 View Post

        I sure hope you are wrong. When it comes to the U.S., I like to believe that it ain't over 'til its over. Of course, can't go further in depth on the topic (that involves a lot of political crap); but don't count out the dollar just yet. Things could be a lot worse than they are.
        One thing you may be missing out on ....

        Not trying to beat up on you personally here as I think there a lot of people in the same boat, but I think you are looking at this problem through a lens of normalcy bias. People don't want to accept it, and "everything is just fine" and "I'll take action when I really need to"

        If you don't prepare now, when it actually does come, it will be too late ...
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        • Profile picture of the author Joseph Robinson
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          Originally Posted by spideysteve View Post

          One thing you may be missing out on ....

          Not trying to beat up on you personally here as I think there a lot of people in the same boat, but I think you are looking at this problem through a lens of normalcy bias. People don't want to accept it, and "everything is just fine" and "I'll take action when I really need to"

          If you don't prepare now, when it actually does come, it will be too late ...
          I respectfully disagree with your perception of my perception. It's not an "everything is fine" bias. It's the basic understanding that while things are bad (and not getting better) when it comes to the dollar, it is by no means the end. Do I think that out of nowhere the dollar is going to be ridiculously strong? No, I am nowhere near that ignorant. Do I think the U.S. economy is on the verge of collapse (bringing the dollar down with it)? No, I don't think that either.
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          • Profile picture of the author spideysteve
            Originally Posted by Joe128139 View Post

            I respectfully disagree with your perception of my perception. It's not an "everything is fine" bias. It's the basic understanding that while things are bad (and not getting better) when it comes to the dollar, it is by no means the end. Do I think that out of nowhere the dollar is going to be ridiculously strong? No, I am nowhere near that ignorant. Do I think the U.S. economy is on the verge of collapse (bringing the dollar down with it)? No, I don't think that either.
            Fair enough Joe ... I must have read into what you were saying a bit more than I should have.

            But let me present this chart: [I can't post links/pics yet, gotta get the post count up ... please copy/paste into a new browser tab]

            http: //stockcharts.com/h-sc/ui?s=$USD&p=D&yr=1&mn=3&dy=0&id=p08238111859

            There is the USD index over the last 15 months. From a post-2008 panic high of 88.71 to now, 74.61.

            That is a drop of 15.89%. Nearly 16% of your purchasing power has gotten killed in 15 months. That is a problem.

            And another chart for comparison. This is Gold, in the exact same time frame:

            http: //stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=1&mn=3&dy=0&id=p71917874474

            From a post-2008 panic low of $1176.10 to just a few days ago at $1796.80. That is a 52.78% gain.

            Which one would you have been better off holding onto?
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    • Profile picture of the author Chris Sorrell
      Originally Posted by celente View Post

      I have switched everything back over to AUD in my merchant accounts.

      I know what is goign to happen to the US Dollar. I do not have to spell it out for you hear. You will see what happens. You already probably know subliminally what is going to happen to it, if you watch the news and understand a bit about the economy.

      This is only the start of the US collapse. Do not expect things to get better. But hey, I just gave away a massive tip. Of where alot of the money still out there is going to go.
      Correct to a point, but I wouldn't be so sure about the AUD as it's predicted that it's next to collapse once the completely fraudulent chinese economy starts to implode. The fallout over the massive chinese investments in australia once the chinese economy is revealed to be based largely on fraudulent company valuations will be devastating.

      The only currencies considered completely safe in anyone's eyes are the swiss frank, norwegian krone and singaporrean dollar. All others are up for debate.
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    • Profile picture of the author BIG Mike
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      • Profile picture of the author celente
        Originally Posted by BIG Mike View Post

        No, you do not know what is going to happen to the US Dollar. Neither do I, but I get sick and tired of seeing comments like this as if you can read the future.

        We can all make some fairly educated guesses, but stating emphatically that the dollar is going to fail only demonstrates ignorance of the topic.
        you might get sick of hearing this statement. But I am highly qualified to give that statement, and remember that as we enter the year 2013.

        I know you are all patriotic but I am just being a realist, the fed will keep hammerning down the dollar, until its value is worthless. That is what I am being told by those at the top.

        You can argue all your want, but I am not guessing, I am being told by my fellow colleges to expect to see the US dollar dead by the end of 2012. These guys are not guessing they are government and officials being told what is about to happen to the US. And it dont look pretty.
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        • Profile picture of the author myob
          LOL!

          In a weak economy, weak domestic currency actually helps the local economy recover faster than would a stronger currency. The weak dollar is extremely benefical for Americans, unfortunately at the expense of other countries.

          For example a weak dollar really means Americans will import less, export more, sell more stocks, vacation at home rather than abroad, etc. Weaker currencies are attractive to product buyers from stronger currencies because of the discount offset. It is no accident that all currencies are weakening, at very competitve falling rates as the respective economies struggle to recover.

          There would be no benefit at all to change the default currency except of course for a huge advantage to China and other creditor nations. Recurring debts are being repaid to creditor countries in falling and devalued currencies worldwide.

          This is basic Economics 102, maybe 103 - in some foreign schools.
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        • Profile picture of the author R Hagel
          Originally Posted by celente View Post

          You can argue all your want, but I am not guessing, I am being told by my fellow colleges to expect to see the US dollar dead by the end of 2012.
          Yes, I believe the Mayans predicted the same.
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    • Profile picture of the author scrofford
      Originally Posted by celente View Post

      I have switched everything back over to AUD in my merchant accounts.

      I know what is goign to happen to the US Dollar. I do not have to spell it out for you hear. You will see what happens. You already probably know subliminally what is going to happen to it, if you watch the news and understand a bit about the economy.

      This is only the start of the US collapse. Do not expect things to get better. But hey, I just gave away a massive tip. Of where alot of the money still out there is going to go.
      I agree with you Celente, and when the time comes (probably soon) I'm going to be switching. Our economy is on a deadly downward spiral.
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      • Profile picture of the author celente
        Originally Posted by scrofford View Post

        I agree with you Celente, and when the time comes (probably soon) I'm going to be switching. Our economy is on a deadly downward spiral.
        yup it will not happen overnight! But it will happen. People can say I am one of those sky is fallin types, but I am just being realistic.

        There are few in here that realise it, but the US will rise again. This is just a culiminatoin of what has been happening and the debt that is catch up with us. People laughed at me when i told them January 2008 the stockmarket would crash somewhere in 2008, and now they are laughing at me again. I do not really care I feel most people deserved to be warned. So take it with a grain of salt or what ever... I just think you need to prepare for the worst and expect the BEST...how can you lose that way.

        The worst thing is being unprepared!!! :0
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        • Profile picture of the author IMWinner
          The thread becomes a political debate regarding what could be the "condition" of the US Dollars in the future. I mean, the question was about the value of US dollar and why was it the currency used for the payment. He was just asking why the USD the universal currency is used in the online business.
          Personally, it's not only USD is used as payment or the currency used in the IM world. But probably, most people prefer to be paid and pay services and goods in USD. I would say because it has a higher value than other currencies (I am not saying that it is always higher). And when people will convert USD to their local currencies, they will earn more than what they receive in their day time job.
          It's not that we should predict what might happen to the value or "condition" of the USD, nobody can predict what will happen (even political analyst can't really present the future of USD).
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      • Profile picture of the author CDarklock
        Originally Posted by scrofford View Post

        Our economy is on a deadly downward spiral.
        Now, all the REAL entrepreneurs...

        What do we do when the market's down,
        what do we do when the market's down,
        what do we do when the market's down
        Earlie in the morning?

        Weigh, hey, up she rises,
        weigh, hey, up she rises...
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        "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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        • Profile picture of the author myob
          US Garage Sale!

          Hurry! Buy products now while the dollar is still weak!

          Everything is on sale at deeply devalued dollar exchange rate prices!
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          • Profile picture of the author paulie888
            Originally Posted by myob View Post

            US Garage Sale!

            Hurry! Buy products now while the dollar is still weak!

            Everything is on sale at deeply devalued dollar exchange rate prices!
            Curiously enough, many items here are sold at bargain-basement prices (especially when you consider the pricing of equivalent items in other countries), and the pricing disparity is very obvious when it comes to electronics, automobiles and clothes/shoes.

            How long the retailers can afford to sell them at these low prices is anyone's guess, especially if the US Dollar continues in its protracted slump.
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            • Profile picture of the author myob
              Originally Posted by paulie888 View Post

              Curiously enough, many items here are sold at bargain-basement prices (especially when you consider the pricing of equivalent items in other countries), and the pricing disparity is very obvious when it comes to electronics, automobiles and clothes/shoes.

              How long the retailers can afford to sell them at these low prices is anyone's guess, especially if the US Dollar continues in its protracted slump.
              As explained in my earlier post (#32), US products are much less expensive when bought in foreign currencies. For about the last year or so, exports have been up, which is helping our domestic economy recover. US companies that sell in foreign markets are prospering. For example, Apple has over $75 billion in surplus cash reserves. It may seem counterintuitive, but a relatively weak currency is in many ways beneficial for a recovering economy.
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              • Profile picture of the author paulie888
                Originally Posted by myob View Post

                As explained in my earlier post (#32), US products are much less expensive when bought in foreign currencies. For about the last year or so, exports have been up, which is helping our domestic economy recover. US companies that sell in foreign markets are prospering. For example, Apple has over $75 billion in surplus cash reserves. It may seem counterintuitive, but a weak relative currency is in many ways beneficial for a recovering economy.
                There's no denying that at all. All I'm stating above is that retailers here that buy goods from foreign countries in foreign currencies are losing money (or at least making less of it) if they hold their prices steady, but it's a dicey affair as the economy here is still very weak, and the price elasticity of demand is quite high as a result.
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                • Profile picture of the author myob
                  If only market forces alone were at work, perhaps the reason for the falling dollar could be better explained. The issue is far more complex, however, because of interference by policies, politics and all the politicking of the ignorant PTB. But we can't even go there anyway.

                  A significant factor (not the major factor by any means) is the growing trade deficit of the US with the rest of the world. Essentially, more dollars are going out than coming in, compounded by the interest rate of borrowing. The overall deficit rate is accelerating, which in economic terms is devaluing the dollar of itself, and is not sustainable.

                  Even a fifth grader could see the solution is to balance the trade deficit and cut spending. A stronger dollar would have a powerful influence for global economic recovery. Unfortunately, fifth graders are above the intelligence of our policy makers and government officials. But we can't even go there anyway. Did I just repeat myself?
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        • Profile picture of the author scrofford
          Originally Posted by CDarklock View Post

          Now, all the REAL entrepreneurs...

          What do we do when the market's down,
          what do we do when the market's down,
          what do we do when the market's down
          Earlie in the morning?

          Weigh, hey, up she rises,
          weigh, hey, up she rises...
          I didn't say money couldn't be made. I also didn't say that many people will still make a lot of money in a bad U.S. economy. I simply made the true statement that the U.S. economy is on a downward spiral. Even in the great depression people made lots of money.

          The fact is though that our economy sucks and is getting worse, and is going to continue to. Do I have proof of that? No I don't have a time machine to take me into the future. It's just my belief along with many other people.
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  • Profile picture of the author woodymcgrath
    USD is still the standard currency traded online. Until a new default currency is accepted, customers will always expect to pay in USD.
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    • Profile picture of the author seasoned
      Originally Posted by woodymcgrath View Post

      USD is still the standard currency traded online. Until a new default currency is accepted, customers will always expect to pay in USD.
      Actually, you imply something that isn't true. U.S. citizens expect currency to be in dollars. Defaults are set by the processors, NOT by anyone else. I'm sure canadian processors generally use CANADIAN dollars, and german ones use MARKs or EUROS.

      By default here, I mean that they would use that currency if nobody farther up the chain, like the gateway or merchant, specified something else. AND, if they DID specify something else, there would likely be some conversion cost.

      There are PLENTY of foreign sites that show costs in LOCAL currency.

      Steve
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      • Profile picture of the author Kay King
        What you want is a big debate over the value past, now and later of the U.S. dollar. I think you are missing the big picture entirely IF you are talking about selling products online. If you are investing - choose whatever currency you want.

        Most are out here trying to earn U.S. dollars with their businesses I presume.
        It's not the "dollar" - it's the US consumer that everyone in the world is targeting. You can take payment in any currency you want. You can show all the charts you want to prove your point - but you cannot force the people in the US to buy outside the US dollar currency. They won't do it - and they don't have to because your competition is selling in US dollars. That's what your argument is missing. Debates swirl around this issue frequently but the end game is if you sell in the US you sell in US dollars.

        That's why marketers who have TESTED it say it doesn't work well and sales go down.

        kay
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        • Profile picture of the author spideysteve
          Originally Posted by Kay King View Post

          What you want is a big debate over the value past, now and later of the U.S. dollar. I think you are missing the big picture entirely IF you are talking about selling products online. If you are investing - choose whatever currency you want.



          It's not the "dollar" - it's the US consumer that everyone in the world is targeting. You can take payment in any currency you want. You can show all the charts you want to prove your point - but you cannot force the people in the US to buy outside the US dollar currency. They won't do it - and they don't have to because your competition is selling in US dollars. That's what your argument is missing. Debates swirl around this issue frequently but the end game is if you sell in the US you sell in US dollars.

          That's why marketers who have TESTED it say it doesn't work well and sales go down.

          kay

          I don't think I really "want" a debate about it. I actually do enjoy the debate, but I wish this topic wasn't around for debate.

          As for your point about the consumer, that is a great outlook and I hadn't thought of it like that. Makes a pile of sense when you put it that way though. Thanks for the insight there.
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          • Profile picture of the author Alexa Smith
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            Originally Posted by joemayerich View Post

            Do most people actually understand what gives the U.S. dollar value?
            Probably not, I suspect.

            And the same is true of the world's other currencies, of course.

            Originally Posted by joemayerich View Post

            Why do you want your business to accept dollars?
            Because (as Kay rightly observes above) most people who have tested it find that not doing that costs them sales and income.

            Originally Posted by joemayerich View Post

            Do you have a choice?
            It depends on the nature of your business, but many people do, yes. That doesn't change the reality, though, that the US$ is very widely accepted, internationally and especially in the US, as "the currency of the internet". US customers expect and want to pay in US$, and customers in most other countries are willing to, because they're used to it.

            Originally Posted by joemayerich View Post

            I have asked some people this question recently and they were unable to answer. Actually they looked at me like a deer caught in headlights, and one said the thought had never even crossed his mind.
            That's also part of the reason why I want my business to accept the US$. It hasn't crossed customers' minds either, typically, and I wouldn't want stuff "crossing their mind" when they're trying to pay me.

            Originally Posted by JamesGw View Post

            The US dollar isn't backed by anything if that's what you're asking.
            True ... but neither are other currencies (if any) in which most people's customers would be ready and willing to pay.
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        • Profile picture of the author Robert Puddy
          Originally Posted by Kay King View Post

          What you want is a big debate over the value past, now and later of the U.S. dollar. I think you are missing the big picture entirely IF you are talking about selling products online. If you are investing - choose whatever currency you want.



          It's not the "dollar" - it's the US consumer that everyone in the world is targeting. You can take payment in any currency you want. You can show all the charts you want to prove your point - but you cannot force the people in the US to buy outside the US dollar currency. They won't do it - and they don't have to because your competition is selling in US dollars. That's what your argument is missing. Debates swirl around this issue frequently but the end game is if you sell in the US you sell in US dollars.

          That's why marketers who have TESTED it say it doesn't work well and sales go down.

          kay
          its more about the fact that (most but not all) Americans are either to lazy or too dumb to work out the exchange rate. So if it isnt being sold in $ they back away (because they dont understand other currencies)

          Its why I have a US tel number that redirects to my office phone here in the UK, because its to difficult to explain to americans how to phone long distance
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        • Profile picture of the author Paul Barrs
          Originally Posted by Quentin View Post

          I would love to accept gold but unfortunately most countries accept US dollars as the global currency.

          It may not be this for much longer but at this point in time it is and so that is why we deal in US dollars.

          Q
          Quentin... I think we should start trading in Bananas... they're worth more than gold right now -

          Paul
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          • Profile picture of the author DWolfe
            Originally Posted by Paul Barrs View Post

            Quentin... I think we should start trading in Bananas... they're worth more than gold right now -

            Paul

            Bananas are worth more then $ 1763 an ounce
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            • Profile picture of the author spideysteve
              Originally Posted by DWolfe View Post

              Bananas are worth more then $ 1763 an ounce
              LOL

              Maybe I've been collecting the wrong things .... bananas instead of gold? :rolleyes:
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              • Profile picture of the author Paul Barrs
                Originally Posted by DWolfe View Post

                Bananas are worth more then $ 1763 an ounce
                Originally Posted by spideysteve View Post

                LOL

                Maybe I've been collecting the wrong things .... bananas instead of gold? :rolleyes:
                Here in Aus since the cyclones and the floods this past summer, bananas have gone up over 500%!!!

                Insane - I've been investing is the wrong things!

                Paul :
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    • Profile picture of the author webtrafficpros
      Originally Posted by woodymcgrath View Post

      USD is still the standard currency traded online. Until a new default currency is accepted, customers will always expect to pay in USD.
      I definitely agree with woody. USD will remain as standard currency for a long time in online trading.
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  • Profile picture of the author spideysteve
    This is a great subject, one of a lot of debate.

    But as far as the USD being the world's reserve currency, it's starting to drop out of that ... like it or not, the USD is falling out of favour ...

    What do I mean? Well, typically for any transaction from one country to another, their local currency would have to be converted to USD, then from USD to the receiving country's currency. How does this work?

    Take Russia and China for example. When Russian companies were buying Chinese goods, they would have to transfer their rubles into USD, then those USD into Renminbi (aka Yuan). The company would get charged of course, by the middle man, the transferring US bank for the "privilege" of using their services.

    No longer is this the case. Recently, Russia and China signed an agreement to have transactions done in their native currencies. So, that means the USD will no longer have to be bought and sold to conduct this transaction, thus removing volume from the USD on the open Forex market.

    We've also seen this move by other countries and organizations. OPEC has recently announced that they will accept Euros in payment for their product, and not just USD.

    Where is the USD heading? Likely to it's intrinsic value, which is what the input costs are. These days, with the Federal Reserve able to print money with the click of a mouse, the most likely answer to that question is ... all the way to zero.

    If you think that's impossible, well, do some research on your own and you will see that there are only 2 outcomes for the debt the US government is now in: massive inflation via printing money or default on the debt obligations and liabilities.
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  • Profile picture of the author JamesGw
    The US dollar isn't backed by anything if that's what you're asking.
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    • Profile picture of the author spideysteve
      Originally Posted by JamesGw View Post

      The US dollar isn't backed by anything if that's what you're asking.
      You've hit the nail on the head.

      The USD used to be backed up by .... drum roll please ... GOLD! Until 1971 when Richard Nixon closed the "gold window" and said to the world, sorry, we're not going to give you gold for our dollars that we've been printing up to pay for the Vietnam War ... I know that as per the Bretton Woods Agreement we said we would do that, but ya, not anymore ... I know it stinks for you countries around the world that were expecting to continue receiving gold for the dollars that we've been printing but we're not going to do that anymore
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  • Profile picture of the author savvybizbuilder
    U.S Dollar is acceptable in most countries that's why. Don't let your self bother of this matter.
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  • Profile picture of the author BIG Mike
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    • Profile picture of the author spideysteve
      Originally Posted by BIG Mike View Post

      The two points you failed to mention was (one) that the USD is valued significantly higher today than it was 2 years ago around the start of the global economy tanking.

      Sorry Mike, but you are just not correct.

      See this chart ... http: //stockcharts.com/h-sc/ui?s=$USD&p=D&yr=2&mn=0&dy=0&id=p78707466040

      That is exactly 2 years to the day. The USD index was 79.29 at that time. That is a 5.9% drop in value. While not a terrible thing, if the USD was not in question right now, it would be higher.
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      • Profile picture of the author BIG Mike
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        • Profile picture of the author spideysteve
          Originally Posted by BIG Mike View Post

          My bad - I should have realized you'd pull a chart out on something that offhanded. I compare to April 23, 2008, which is the lowest dollar index in at least 5 years and more likely 10.

          Now do you want to check that date and tell me I'm wrong? The dollar index is up from that date.
          First, to me this stuff is not offhand. I actually study it daily. I watch and trade markets. Not that I make enough to live off of if I were doing it full time, but enough to say that I make money in the markets ... all markets, up and down. FYI ... the forex market it is absolutely the easiest market to trade, IMO.

          Second, you are correct. That low point you are talking about was the USDX at 70.70. Today's close of 73.96 represents an increase of 4.6% over 3.5 years. I think most people would fire their broker if that was what their account statement showed.

          Originally Posted by BIG Mike View Post


          Your chart actually proves my point - while admittedly taking some wild swings, the dollar index is and has been relatively stable over the long-term (3 to 5 year) with slow growth.
          Wow, sorry Mike you're not just wrong there, you're actually the exact opposite of right. Please see chart:

          h ttp://ww w.freestock charts.com?emailChartID=65347f48-163a-46e3-8369-fc72bd77c469

          In 10 years the USD has gone from 120.51 to 73.96 which represents a drop of 38.6%. You would fire your broker in a heartbeat for that performance.

          Originally Posted by BIG Mike View Post


          Don't pull out gold charts unless you're prepared to adjust for inflation and other factors. The price of gold historically rises during difficult economic times.
          Actually, adjusted for inflation (using the official inflation numbers from the government) the price of gold at its 1981 peak would be over $2500/oz today. Gold IS a measure of inflation. I started buying it in 2006 when I first learned about it ... it is wealth protection from fiat money creation.

          Originally Posted by BIG Mike View Post


          Just answer me this one question - do you know for a fact that the US dollar will not recover or it's value will reach 0?

          Unless you answered yes and your name is God, the fact is you or anyone else can only speculate short-term on what may or may not happen.
          No I am not god, obviously .... however, have you looked at the balance sheet of the US government? Break it down simply ... it's like a family with a household income of $58,000 a year, they spend $75,000 a year and are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year.

          Please answer this ... would you lend that family more money? And is this a sustainable model?

          Originally Posted by BIG Mike View Post


          As I originally stated, I have already tested this and know why I sell in dollars as opposed to other currencies. Kay mentioned it too - the market drives this, not the dollar index.
          I agree totally, as I said above ...

          Look, I'm not trying to argue here, just trying to throw a different spin on how it's looked at ... trying to help out with my limited knowledge
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  • Profile picture of the author spideysteve
    So what is the USD anyways? From Wikipedia:

    The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.

    It is a weighted geometric mean of the dollar's value compared only with
    • Euro (EUR), 58.6% weight
    • Japanese Yen (JPY) 12.6% weight
    • Pound sterling (GBP), 11.9% weight
    • Canadian dollar (CAD), 9.1% weight
    • Swedish krona (SEK), 4.2% weight and
    • Swiss franc (CHF) 3.6% weight
    USDX goes up when the US dollar gains "strength" (value) when compared to other currencies.

    Even though Wiki doesn't say it, the corollary of that would be that the USDX goes down when the US dollar loses value against other currencies.
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    • Profile picture of the author Rsberg
      Originally Posted by spideysteve View Post

      So what is the USD anyways?
      Like many other gloabally recognized currencies...

      It's a fiat currency.

      And because of that it's unfortunately destined to fail to some extent. Maybe not entirely but certainly to the extent that it will put those who have invested in it in dire straights...actually thats already begun to happen.

      Dont believe it? Take a look at history and see how most have faired throughout time.
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  • Profile picture of the author HeySal
    Is this really an issue when you are using an online payment processor? If you decide to accept a currency besides USD - it's only a click to do so. No planning required. I can send any currency to my bank and they will take it - but adjust the amount to USD when my account is credited. The most I would have to do if I wanted to actually deal in a different currency altogether is put my money in a bank that would allow transactions in that currency. If we lose reserve status, that will probably be most banks.
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  • Profile picture of the author EdmundLoh
    I wrote a similar thread like this a few months back (don't know where it went though). Responses then was different, but seems the overall notion now is that everyone knows the US Dollar is going to down gradually. It's happening, and you don't need to read a lot to be convinced.

    Nonetheless, USD is still the major currency on the Internet. As to whether it will be replaced by a new global reserve currency or what will be of it eventually remains to be seen. Thus the variables you can play with now are:

    1) pricing your products

    2) sell to more people, and if you want to you can

    3) sell to local markets outside US in their own currencies

    Edmund
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  • Profile picture of the author Floyd Fisher
    I accept US dollars because I live in the US, and it's kinda hard to cash foreign currencies such as Japanese Yen and German Marks. Sorry, but my bank won't take foreign currencies to pay my mortgage, National Grid won't take foreign currencies to pay for my utilities, and the stores I shop in won't take it either. If they won't, then why should I?

    BTW: If you are using a credit card, all major cards will convert the currency automatically...so you don't have to do any conversion at all.

    I don't know why people see this as a problem...if you live in a certain area, that is the currency you accept as payment. In India, you take rupees...in China, you take yuan...in Brittain, you take sterling pounds.
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  • Profile picture of the author TheFundingGuru
    The US economy is made up predominantly of small businesses. Small businesses creating, innovating and producing products and services people want - people just like us. As long as these small businesses continue to innovate and create then the US economy will continue to be strong. As a person wo has lived in multiple countries - I have absolute confidence in the people of the United States to be entrepreneurial and to bring themselves out of any recession through hard work, creativity and perseverance. There is a reason why the United States is such a great nation - its culture, its spirit and most of all, its people.
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  • Profile picture of the author RyanHend
    Focus on growing your business and expanding into new markets. Thats my advice. If you want an international market, you should still accept USD since it is STILL the "default" currency of choice.
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  • Profile picture of the author joemayerich
    I know exactly what is going on with the U.S. dollar. It is a fiat currency and the only way it moves is down, just look at its chart. If you understand anything about the money supply, the only thing it does is expand, especially to pay for wars. That is why the "Nixon shock" happened in '71 to get the U.S. off of the gold standard so we could print money to pay for Vietnam. The U.S. dollar's days are numbered. I just wanted to see how many people realized that here, and what they were doing about it. People I question about it and give me a blank stare, those people are in trouble.
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  • Profile picture of the author joemayerich
    Interesting responses.
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  • Profile picture of the author timpears
    Well my guess is that up till the elections and the replacement of the current President by the one elected next year, the dollar will keep dropping and may even be replaced as the standard currency of the world. But when the new President takes over, a new Treasury Secretary is appointed, the policies will be different and more emphasis will be placed on the position of the US Dollar. Things are going to change around the end of next year.
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  • Profile picture of the author eddale
    For me, Its a marketing decision, not a currency decision.

    For people outside the USA - they are very used to paying for things in US Dollars - so their is no disconnect in the sales process.

    For Jo and Jane Smith in the USA, asking them to buy in a foreign currency is a disconnect and hurts sales.

    So we tend to go with US dollars - also if your business is all accounted for in the one currency - the fluctuations don't hurt your bottom line.

    As an Aussie getting paid in US dollars - I do wish the Aussie Dollar would drop a bit!!

    Ed
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  • I guess more people would accept more forms off money if merchant accounts accepted it.

    For me I accept dollars so I can go buy assets.
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  • Profile picture of the author Spyder77
    I have been watching the slow but steady decline in value of the USD and am on the fence about what to do about it as a non-American who buys and sells products in US dollars.

    The good: I buy my hosting, domains and other internet services and products mainly from US companies, and with my local currency being valued higher, I can buy more of them for less.

    The bad: I sell my products in USD, and as it declines, I get fewer dollars coming in after currency conversion on the income side.

    The really bad: I too believe its going to get much worse before it gets better, and that the ramifications are going to be global. I wish this were mere pessimism and I hope that I'm wrong about it; because if I'm not then its going to present very real problems for all of us:

    1. In really bad economic times, demand for non-staple goods plummets. And while seeing demand fall on the US side would be bad enough, if this does become global than we're looking at a switch to that type of demand everywhere. How many of us are in staple good markets?

    2. Inflation could easily become global, robbing many (all?) currencies of real value - and not just the USD, although the worst of it will probably still be seen there, at least initially.

    In any case, this is something I mainly feel like a passive spectator on: I will continue on as I am now and hope for the best while continuing to watch the situation with the USD closely.

    On the flip, I don't think its going to reach the true meltdown point. Its more that correcting the current course requires the kind of sacrifices that is presently political suicide for any politician who dares to seriously even discuss it. Once the dollar and the economy has been dealt enough damage, then the public will be more willing to accept those types of sacrifices and elect the people who will make them (i.e.: when its do or die time).

    -Spyder
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  • Profile picture of the author ahlexis
    U.S Dollar is acceptable in most countries that's why. Don't let your self bother of this matter.
    While this is currently true, I suggest you not take a vacation in Mexico with only dollars in your pocket!

    Why?

    Because most hotels and banks will only change somewhere around $200 USD or so into the local currency, if that. And they don't really want to do even that much.

    The rationale being given is supposedly that there are too many narco-dollars floating around, so to stem the flow of drugs and drug money, the Mexican government has established a rule limiting the amount of dollars allowed to be deposited into any bank account by any individual or business. They are no longer accepting USD. And those US citizens that live in Mexico are also limited in the amount of dollars that they can bring to the bank, although the amount is much higher than $200. That's for those with residency in Mexico.

    Who would have thunk it that Mexico would no longer want US dollars?

    But the truth is, they just don't want to get stuck holding the bag of a currency that's becoming worth less and less every day.

    And this isn't even current news. This was instituted LAST YEAR!
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  • Profile picture of the author CDarklock
    Originally Posted by joemayerich View Post

    Do most people actually understand what gives the U.S. dollar value?
    Nothing, really. It's a fiat currency. It has value because we say it does.

    Why do you want your business to accept dollars?
    Because most of the things I buy are paid for in US dollars, and if the currency in my account is in some other currency, I get charged an extra fee for the currency conversion AND the exchange rate is invariably fudged by the financial institution to cheat me out of a little extra money... so the less often I convert funds, the better.
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  • Profile picture of the author scrofford
    Originally Posted by joemayerich View Post

    Do most people actually understand what gives the U.S. dollar value? Why do you want your business to accept dollars? Do you have a choice? Are people actually interested in knowing these things (if they don't already)? Most are out here trying to earn U.S. dollars with their businesses I presume. I'm curious simply because I have asked some people this question recently and they were unable to answer. Actually they looked at me like a deer caught in headlights, and one said the thought had never even crossed his mind.
    Well Paul I happen to live in the U.S. and so do a lot of other people...not all, but a lot, and wouldn't it make sense to accept the U.S. Dollar for now? I think the Australian Dollar would be better though. But again, I live in the U.S.

    By the way there's not much to the U.S. Dollar now days. It's just pretty printed paper. We have nothing backing it whatsoever. How's that for being the biggest scam in the world! LOL!
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  • Profile picture of the author imdomination
    I don't really worry about WHY the USD changes value because there really isn't anything I myself can do about it. I do worry about what it's worth though. I've basically taken a 40% pay cut since 2009 thanks to the strong AUD.
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    • Profile picture of the author Ben Armstrong
      Originally Posted by imdomination View Post

      I don't really worry about WHY the USD changes value because there really isn't anything I myself can do about it. I do worry about what it's worth though. I've basically taken a 40% pay cut since 2009 thanks to the strong AUD.
      I mentioned this in another thread and was told that I should just change my pricing to match.

      Great advice if you have your own products (which I eventually want to) but as an affiliate you just have to ride out the ups and downs and allow for them.
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  • Profile picture of the author ak1lz

    The falling of the US dollar.
    • 2011 - The dollar's value fell 11% against the euro, which was worth $1.47 by April 8.
    • 2010 - The EU debt crisis strengthened the dollar. By year end, the euro was only worth $1.32.
    • 2009 - The dollar fell 20% thanks to debt fears. By December, the euro was worth $1.43.
    • 2008 - The dollar strengthened 22% as businesses hoarded dollars during the credit crisis. By year end, the euro was worth $1.39.
    • 2002-2007 - The dollar fell 40% as the U.S. debt grew 60%. In 2002, a euro was worth $.87 vs $1.44 by December 2007. (Source: Federal Reserve Bank, Exchange Rates)





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    • Profile picture of the author paulie888
      Originally Posted by ak1lz View Post


      The falling of the US dollar.
      • 2011 - The dollar's value fell 11% against the euro, which was worth $1.47 by April 8.
      • 2010 - The EU debt crisis strengthened the dollar. By year end, the euro was only worth $1.32.
      • 2009 - The dollar fell 20% thanks to debt fears. By December, the euro was worth $1.43.
      • 2008 - The dollar strengthened 22% as businesses hoarded dollars during the credit crisis. By year end, the euro was worth $1.39.
      • 2002-2007 - The dollar fell 40% as the U.S. debt grew 60%. In 2002, a euro was worth $.87 vs $1.44 by December 2007. (Source: Federal Reserve Bank, Exchange Rates)





      For those who trade the foreign exchange market, like I do, one fact remains indisputable. The long-term charts show the USD trending lower against all major currencies, and this isn't going to change anytime soon.

      Sure, you'll see the USD fluctuate up and down, which often results due to technical triggers as well as fundamental news, but there's no mistaking the long-term trend for the USD, and I doubt that this is going to change anytime in the near future.
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  • Profile picture of the author crystalDMP
    as a newbie in this industry, i personally do not care at all about currencies. Anything will do, as long as there is something.
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  • Profile picture of the author hpad06
    there is no need to care weak US dollar, focus more on how to make money, that's the solution
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  • Profile picture of the author Ben Gordon
    I would love to accept Canadian dollars but unfortunately it will decrease my conversation rate. Since US dollars are the world's main currency most people prefer to pay for things using that and some get "scared" thinking it's a scam or you're trying to make more money off them when you put another currency.
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  • Profile picture of the author handy
    When the US dollar loses its status as the sole reserve currency, its value (for people who are not based in the US), will slide...
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  • Profile picture of the author joemayerich
    Can't we just bring back the colonial script?
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  • Profile picture of the author Ansar Pasha
    Banned
    I'm not going to butt in here, but I just wanted to throw this in since I don't live in the US:

    The American Dream By The Provocateur Network - YouTube

    I'm not a conspiracy nut (it's not as crazy as it sounds really, to me anyway ), but regardless, the US has really taken a hit over the last few years. I used to get more Australian dollars for my US earnings but since then, I've had to make some serious changes.
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  • Profile picture of the author Brian Cashins
    Nothing you or I could do about this situation. The Federal Reserve screwed the pooch when they decided to move from the gold standard and be the world bank. Glad I grab a lot of coins during the 90's internet bust, ROLF!
    A year ago, I decided to expand my business to different markets due to a strong pound and steady-for-now euro. Now, a few ventures accept these payments instead of USD and I'm happy for that.
    I suggest those in this business consider doing the same..
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    • Profile picture of the author myob
      Well, here we go again. Just like those who were in the right position in 2008 made fortunes with the huge rise in equity stocks. This has been an especially prosperous time for international companies, and they are now sitting on liquid cash reserves exceeding $1 trillion. When the current anti-business climate is lifted, this will be unleashed, and people who timidly tuck their money in gold will be left behind - again. IMHO, of course. Again.
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