debt to gdp ratio historical

Dollar down, but not forgotten – Why everyone loves to hate the dollar?

The big names in the field of investment and many leaders businesses have emerged in the last year, indicating that the dollar will fall citing a variety of reasons. Many managers of U.S. deficits and excessive government spending, partly to blame easy monetary policy of the Fed and others say the U.S. is no longer a good investment because many third world countries produce better yields.

That said, let's examine some facts of the correlation and the state of economic facts in general. First, all economies experience ups and downs whether communist, socialist or capitalist. Second, nothing is forever and nothing falls out. Humans third, creating economies and markets, and as people in general are followers. For example, when the tulips in Holland in the 17th century were the fashion, everybody bought tulips. In late 1990, when the Internet has become everyone bought valuable dot-com stocks. And in the 2000s when real estate is shown in "short" because they had finished, everyone had to buy a property.

Look at the countries' debt to GDP numbers and currencies in 20 years. In Japan, in 1991 public debt was about 70% of GDP is now more than 200%. In this period the yen trading at 130 yen per dollar (twice in 1993 and 2011) and also down 64 yen per dollar. Yen against the euro, shows a similar pattern, up and down on a wide range in the same period of time. Time of any government debt in Japan has increased significantly. In the last 10 years, the yen has gained significantly against the dollar and the euro as the debt continued to increase by 150% of GDP and 200% of GDP.

Historically, U.S. debt by a percentage of GDP exceeds 120% during the war and then took 30 years to drop about 30% of GDP. During this period, the dollar gained and lost several times the value against other major currencies. It was not until the 1980s when the dollar lost control of up to a rate of more than 150 in 1985 – Now at 76 for comparison. In the 1980's through early 1990 debt in the United States national has increased the highest level since the Second World War. During the first five years in the eighties, while the dollar was set records, the national debt has increased by over 50%. The dollar rose of all time in 1985 to around 76 in the early nineties, while the national debt continued to increase. Thus, the debt grew and the dollar rose, while debt has increased and the dollar falls. Maybe the dollar is falling because it's become nothing more than a tulip, a dot-com or a piece of real overvalued real estate – hit the end.

Thus, these big "names" running around telling everyone that the sky is falling and the U.S. dollar become useless because of the high national debt you wish to examine the story instead of some segments of the story. More than likely these are the same "experts" who said in 2006 that the U.S. housing market would recover in late 2007, early 2008 at the latest. I can not help are just people, followers. To follow the crowd. Since early 2002, the dollar fell to a rate of 120 at its current level of 76. In the same period debt country has increased by 55% of GDP and 100% of GDP. 90% of people will drive the market up or down, perhaps these "experts" are just hunters the market.

Currencies rise and fall with economic growth in this country. If you had seven billion dollars in cash, $ 1 billion in each of the G-7 currencies, where to put money to work? China, a country that is relatively new in economic reforms and growth was strong appreciation economic and the price of more than a decade? Japan, a country that has grown at least 20 years and only require a major disaster reconstruction? Europe, 27 countries, all with distinctive ideas associated with the best way to manage their own countries. Not to mention the debt and banking problems that require agreement of the 27 different states – Ever tried 27 people agree on one idea? And the United States, which has just gone through the worst recession in 70 years and everything in the country has lost value over the past 5 years. Kmart is like the old light blue Promotions, USA is for sale everywhere.

Me would allocate 60% of the $ 7 billion to the U.S., 35% in Japan and the remaining 5% in Canada and Australia. This reflection will ultimately prevail and the dollar will rise against most major currencies, the yen will remain strong or in a narrow range and the euro will be reduced just because it is a better place to invest money.

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