Friday, October 12, 2007

Weak Dollar

Barry at The Big Picture looks at the number of dollars the Fed has put (printed) into the system and finds that the money supply has grown by 24% at an annualized rate.

Of course many of these newly printed dollars have found their way into the equity and commodity markets - the Dow and the S&P are near all-time highs. Oil and gold are also near or at all-time highs.

The consequences for the dollar, however, are extreme. Barry says a friend just came back from Italy and noted the following spending figures from Rome:

Dinner for two last night in Roma? $320 (U.S.)
Price of refueling an empty tank in my auto on Thursday? $175 (U.S.)
Hotel per night? $850 (U.S.)
Bellini? $24 (U.S.)
Dry Cleaning of shirt I poured Chianti on? $20 (U.S.)

The dollar is starting to look more and more like a Third World currency.

I can't get over that hotel bill. I mean, I know the dollar is really weak right now, but I deal with hotel bookings quite often. That is 5* delux all the way. 607 EUR? Damn, that is pricey!!!!

I wish I had that guys "problems". :)
Good point, pt. But I tried buying something off Amazon UK the other day and realized one pound costs more than two bucks.
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