Today the 1 US$ = S$1.389
Did you go to the NATAS travel fair last week? Tours to US are becoming popular - at $1.389 some Singaporeans plan to go there for a shopping spree. I hope Singaporean tourists don't go round saying, "Cheap, cheap, cheap" like they do when they go to Johor. Otherwise, we will be called "birds" by the Americans.
The US dollar is sinking...fast. If you remember your history, the decline of the Roman Empire started when the Romans debased their currency. It wasn't defeat at war that brought about its demise but a deterioration of its economy. The Romans after amassing large amounts of resources from conquered lands decided to enjoy life. But when the money ran out, they decided to just make more of it.
While America doesn't go about building an empire by conquering foreign lands, it has been consuming far more than it produces resulting in a huge deficit. Foreign govts would return the US$ by buying US treasuries turning US into the biggest debtor nation in the world. This sort of kept the US$ from plummeting. However, foreign govts are now wary of keeping too much US$ assets as the US economy weakens and the US$ falls. Are we seeing a vicious cycle here?
There was even a presidential candidate Congressman Ron Paul whose platform was to strengthen the US dollar and dismantle the Federal Reserve. Several years ago he sounded more like a conspiracy theorist then a senator but the recent fall in the dollar and array of problems facing the US economy did lend some credibility to his "theories". Will we see the day when the US$1 goes for S$1?....I don't think it is too far fetched.