don t sweat the dollar l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
“Don’t Sweat the Dollar” PowerPoint Presentation
Download Presentation
“Don’t Sweat the Dollar”

Loading in 2 Seconds...

play fullscreen
1 / 10

“Don’t Sweat the Dollar” - PowerPoint PPT Presentation


  • 133 Views
  • Uploaded on

“Don’t Sweat the Dollar”. Presented by Amy Klein Fortune Magazine, August 12, 2002 Written by Rob Norton. Investor Worries. Terrorist threats Looming warfare Corporate scandals Recent decline of the dollar against foreign currencies . It’s Too Soon to Worry.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about '“Don’t Sweat the Dollar”' - dieter


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
don t sweat the dollar

“Don’t Sweat the Dollar”

Presented by

Amy Klein

Fortune Magazine, August 12, 2002

Written by Rob Norton

investor worries
Investor Worries
  • Terrorist threats
  • Looming warfare
  • Corporate scandals
  • Recent decline of the dollar against foreign currencies
it s too soon to worry
It’s Too Soon to Worry
  • Dollar not low by historical standards
  • Long-term time horizon
  • Rates still well above the ‘90s
  • Exchange remains competitive with foreign

currencies

recent exchange rates
Recent Exchange Rates

Euro

  • Launched Jan. 1, 1999, at $1.17
  • 1½ yrs lost 25% against the dollar
  • 2000 only $.83; now $1.00

Japanese Yen

  • Dollar is slightly above 10-year average
dollar previously overvalued
Dollar Previously Overvalued
  • Continued climb through 2001 economy slump
  • Forecasted months ago to fall 20%
  • Argument: $ can sink another 10% without being undervalued
why are investors afraid
Why Are Investors Afraid?
  • Decreasing purchasing power
  • Increasing import prices fueling inflation
  • Depressed value of foreign investment
  • Compromise to U.S. economic recovery
why shouldn t they fear
Why Shouldn’t They Fear?
  • Import prices have barely budged
  • Dollar must fall considerably before inflation increases
  • 25% decline to threaten foreign investment

and recovery

advantages of a lower exchange rate
Advantages of a Lower Exchange Rate
  • Competitive U.S. goods – benefits smokestack America
  • Lower dollar value beneficial for manufacturers
  • A strong dollar detrimental to U.S. exports
  • Falling dollar helping manufacturers to recover
solutions to the problem
Solutions to the “Problem”
  • Treasury can buy dollars and sell foreign currencies

Problem: effects only momentary

  • Federal Reserve can increase interest rates

Problem: impair overall economic recovery

what should we do
What Should We Do?
  • Hold out for economic recovery
  • Current slump only temporary
  • Is innovation, productivity, economic growth higher anywhere else?