[J. Abizeid]

Originally Posted by Abou-Eddie

Bush became president for his first term on 20 January 2001, the USD/Euro exchange rate on that date was 0.92. He was re-elected and started his second term on 20 January 2005 and the Euro was at 1.26 on that date. I fail to see how the dollar did not collapse under his watch (even after the latest rally which took it from 1.60 to 1.25) when at the start of his first presidency it was 0.92.

As you noted, the dollar’s value declined continuously for the first seven and a half year of the Bush administration (from 0.92 to 1.60). The decline was caused by the lack of confidence in the US ability to pay off the debt that Bush kept on accumulating irresponsibly. He took over a balanced budget with a surplus from Clinton and turned it into a record high deficit.
The dollar was supposed to collapse completely during the summer jut like Lehman Brothers did but that was not in the best interest of all the foreign investors such as China. Europe and the Gulf States; so they set up a dollar rescue system that has been active since August until they salvage as much as they can from their investments. The $700 billions bailout was part of that deal. Today, the dollar is on a temporary life support. Its artificial value is a cancerous growth that will eventually kill it. The fundamentals of the US economy have not changed. Actually, it got worse since last August. It turned into a black hole sucking into it the rest of the world economies. The world is finally reacting.
With today’s reality, it is in the best interest of the US to devalue the dollar by printing a lot more of it and start paying Bush’s debt. That will also help its exports. The world is no longer willing to pay the US bills. That’s the message that Bush will get tomorrow from the world leaders in the economic summit.

http://news.yahoo.com/s/nm/20081113/bs_nm/us_financial_summit
French President Nicolas Sarkozy</SPAN> sounded an aggressive note on Thursday as he prepared to head for the summit.
"I am leaving for Washington to explain that the dollar, which after the Second World War was the only currency in the world, can no longer claim to be the only currency in the world," he said. "What was true in 1945 cannot be true today."

http://www.marketwatch.com/news/story/Federal-deficit-balloons-bailout-costs/story.aspx?guid=%7BC4ADDF27%2D217C%2D4DA2%2D953C%2 D2442C3FA7D76%7D
WASHINGTON (MarketWatch) - The U.S. federal government deficit soared in October to a record $237.2 billion, as the government invested more than $136 billion in various bank bailout programs, the Treasury reported Thursday.

http://www.marketwatch.com/news/stor...&dist=hplatest
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