The 2000 drop in the dollar was the dot com crash I think. In 2008 the same sort of massive drop happened until the RBA stepped in.
The RBA has massive ability to influence the value of the AUD. Well to the negative anyway. To have positive influence in a big way it requires the actions of other nations devaluing thier currencies, then throughh the lack of money printing and high interest rates the RBA can strengthen the AUD. But negatively, all the RBA has to do is print faster than the US or Euro, just like China is doing to keep the low peg with the USD.
I wonder why Japan isn't doing this to flood the market with Yen. The high Yen is hurting their exports and domestic industry so last time they tried to sell 5 trillion Yen onto the FX market but it did SFA. Why not just simply print more Yen? Anyone know?
Good question on the Yen With regard to Kill the Dollar, on the other thread. If the USA is running a ten percent fiscal deficit - and this is what is strangling growth and exports, then something like a 20 percent devaluation would put the USA fiscal deficit into the black - temporarily - but that may be all they're looking for, with the rest hinging on their faith that the markets will rise and growth will resume.
I'm not an expert, but believe they have been. Their government debts have been funded internally due to domestic savings which many expect to change now due to their ageing population. The expectation is that they're going to start printing more, although you wouldn't know it by looking at the USD/JPY.
Best way to see this would be looking at The Bretton Woods system and the Gold standard. USD used to have much higher purchasing power as it was tied to Gold. Now that same USD cannot buy the same amount of Gold.
Thank you. Perhaps I should have qualified the question. Since WW2, has the world reserve currency, the US$, been devalued in the external currency markets? I vaguely recall that there was a financial event in the 1950's that lead the USA into a technical bankruptcy.
Further to previous devaluations: This was very interesting and the charts are fascinating for questions of the value of non dollar assets. A scenario
I wrote something similar to that scenario a while back on here but can't find it. What is essentially happening in that scenario is not the devaluation of a currency but the "manipulated" appreciation of the price of gold back to a classical gold standard system.
I'm still not convinced there will be a return to a gold standard, but I'm becoming more convinced there will be a devaluation.
Until we have a monetary system though that is backed by something that is real and tangible, we will continue to go from crisis to crisis for an eternity. Fiat has been an abomination and must be destroyed.
