Greetings!

Many economists and investors have recently written articles about the U.S. dollar, some for and some against the U.S. dollar. So far this year, the U.S. dollar index is up around 4% against the other world currencies. The U.S. dollar index started out at about 76.5 at the beginning of 2008 and is now at 79.5.

In my opinion, what we're looking at with the U.S. dollar against the Euro, goes all the way back to the last part of 2000, when the dollar hit peak against the Euro at 1.19. That was its highest value. Then in the early summer months, really in July of 2008, the U.S. dollar had fallen all the way to .637. That is a 46.47% decrease in the U.S. dollar versus the Euro over a seven year time period. My big question is how much more will the dollar fall against the Euro? Europe has problems of its own. There's economic weakness that exists over in Europe right now. So, they're facing economic problems. Other countries like China appear to be slowing down.

Subsequently, a lot of people are talking about commodities and at the start of 2002; the commodities index hit a low of 91.06. Then earlier this year, like back in May, it hit a high of 237.8. So, that is a 261% increase in six and a half years. The Commodities Index has gone up 261% while the U.S. dollar has fallen against the Euro 46.5%. Therefore, again, my second question is how much more do we think commodities are going to go up? Some experts believe commodities will just continue to go up.

The Federal Reserve lowered interest rates 14 consecutive times from January 3rd, 2000 to June 25th, 2002. This action pumped a lot of new U.S. dollars into the system. As a result of their lowering interest rates 6-7 years ago, all the way down to a low of 1% on 06/25/2002, the dollar was devalued against the European currency by 46.51%. Then from June 30th, 2003 to June 29th, 2005, the Federal Reserve raised rates 17 times in a row to 5.25%! Then from September 18th, 2006 to April 30th, 2008 the Fed has lowered rates back down to where they are now at 2%. I think the fact that rates are higher than they were in mid 2002 is starting to kick in for the U.S. dollar as it hit a low of .637 against the Euro. Unless the government moves forward with any type of bailout or lowering rates further I would not get on the "US dollar is going kaput" band wagon because you may end up with egg on your face; of worse.

My prayer for you and myself is that Christ would create in us a clean heart!

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