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Economic pundits will disagree with me, but I certainly believe that the US Dollar has been losing ground ever since. And if this meltdown continues we will soon be experiencing what people experienced during the Great Depression!

Here are my reasons:

1.) The world’s currency of choice now is not the US Dollar anymore, rather, the Euro. Did you notice that? Did you notice how many countries have already started junking their reserves to euro? If I may remember this right, I think the Philippines is also one of them, am I right? The latest I read was Indonesia is switching from the dollar to the euro ang get this, even Ecuador dumped $2.3 billion from its national reserves, converting to competing currencies – not the US dollar! I mean, when you read those news that they don’t like the US dollars, you begin to think! What’s going on? You want some more proof? Russia’s gas are priced in Euros not US dollars, but then again, they’re pissed at Bush, so maybe that’s political What about this, did I hear that Saudi Arabia is also demanding Euro payments for its oil contracts?

2.) Next, where’s the world’s financial center now? Everyone think it’s New York, but even New York might be losing ground to London where all the Middle Eastern monies are now being funneled. Partly 911 but I believe it has got a lot to do with the Sarbanes Oxley. Sarbox is an unbelievably expensive and restrictive for new businesses (especially if you’re a small one) which is why most businesses don’t do IPO’s in New York anymore! There are a lot of better bourses in Europe and in Asia that are not sanctioned by the expensive Sarbox.

3.) Exactly what you said, political stability or geopolitical antagonism towards America – I mean, there’s been a growing belief that the US dollar is no longer the prime investment as it used to be. It used to be that wealthy people or at least those people with monies look for America as a safe haven. But after 911 with all the money laundering rules, it’s unbelievably scary! Are we still viewed as a safe financial haven? I don’t think so.

4.) Trade deficit? I don’t think you can stop Americans with our voracious appetite to import, import and import and as you can see, we don’t produce here no more. Ok, that’s too much of a statement. We do produce but not as much as before, although our economy has now moved to service, right? So, we import like crazy. We are just too hooked on low priced products from China, Indonesia, India and all of Asia and even the Philippines!

5.) What about our housing troubles? This was started many many years ago during the housing boom. You see, during those times, there were just a lot of unscrupulous people trying to cash in and milk the sub-prime market (people with bad credit records) and loan them monies with extra fee. It’s that extra fee that they were after. Now, you have all of these sub-prime mortgage, bundled into one investment, sold to investors who are now not getting anything from their invested capital because everyone else in the sub-prime market has gone bankcrupt.

So, to answer your question? Yes, the US dollar has been losing its strentgh and I have not even discussed the speculation part.

Now, your other question – is the peso really getting strong?

Watch out for my next post. I am doing my own unscientific analysis.

Yeap, I do. It’s not only a good idea, it’s a much better idea than the current estafa cases that you file each time you issue a bounced check.

The idea is simple and it works very well around the world except the Philippines. As you create debt, pay and manage your debts, you get rated how good a customer you are. So, the higher your credit rating, that means, that you are a good payor. This way, we can eliminate yong mga estafador sa society and create an honest and trusting business environment.

Downside is that, we Pinoys, as I have said already are waaaaaaaaaaayyyyyy tooooo corruply innovative and creative.