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What Will Happen to AAPL When the U.S. Dollar Collapses

post #1 of 14
Thread Starter 
At present 60% of Apple's market is the United States, and all of their hardware is manufactured over seas.

The recent past and current monetary policy of the United States is leading to the inevitable collapse of the U.S. dollar. Once this happens and the effects of inflation are felt in consumer prices all of Apple's manufacturing costs will go up and the retail price of their products will go with it. In the United States everything will cost more but wages won't keep place with the effects of inflation. When the $499.00 iPad costs $1099.99 how many people do you think will buy them.

Apple stock will most likely crash as their earnings per share will fall off of a cliff when this happens.
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post #2 of 14
The Euro will crash, too, so if all the currencies that matter crash together, no one will even notice.

Also, this is an if, not a when. Worry about it when the time comes.
post #3 of 14
Thread Starter 
Quote:
Originally Posted by Tallest Skil View Post

The Euro will crash, too, so if all the currencies that matter crash together, no one will even notice.

Also, this is an if, not a when. Worry about it when the time comes.

And why is the Euro going to crash?

As a whole the EU is a creditor while the U.S. is the worlds largest debtor nation.

The only difference between the U.S. and countries like Greece and Ireland is that the U.S. can still borrow and also print money.

At some point the rest of the world will publicly acknowledge that the U.S. cannot payoff its' debt and then drop the U.S. dollar as the world's reserve currency. This is known as decoupling, once this happens the rest of the world will see its standard of living increase while the U.S.'s will decrease. People in China will get richer and be able to consume their own production instead of exporting it to the United States and getting inflated dollars in return.

The time is already here. Commodity prices are skyrocketing. Look for oil to take out the $150.00 per barrel high in 12 to 18 months. Look for Gold to be close to $2000.00 per ounce by 2012. The end of American economic dominance is sure to occur within the first half of this decade.
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post #4 of 14
You logic is fundamentally flawed on several levels. First, the US dollar has been declining against other major currencies for several years now, so the trend is hardly current or based on anything the Fed has done recently. Second, Apple is a US-based exporter, and as a US-based exporter, their profit margins increase when the dollar is weak. This is particularly the case for Apple, which is seeing solid growth in their Asia and Europe markets.

So in a word, no.
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post #5 of 14
Thread Starter 
Quote:
Originally Posted by Dr Millmoss View Post

You logic is fundamentally flawed on several levels. First, the US dollar has been declining against other major currencies for several years now, so the trend is hardly current or based on anything the Fed has done recently. Second, Apple is a US-based exporter, and as a US-based exporter, their profit margins increase when the dollar is weak. This is particularly the case for Apple, which is seeing solid growth in their Asia and Europe markets.

So in a word, no.


So I guess that you consider 0% interest rates and increasing the monetary base by a factor of 300% inconsequential to value of our currency? It also has had no effect on us not having deflation proportional to the economic contraction the we experienced 2 years ago? Then there is quantitative easing which is the Feds attempt to control the long term side of the yield curve which has failed as indicated by the raise in interest rates.

Apple is U.S. based but it doesn't manufacture anything in the United States, It buys its components and has them assembled in Asia. Apple buys everything in U.S. dollars so once the dollar is trading in the 40's the cost of their components and labor will substantially rise. You are also ignoring the fact that their largest market is the U.S. consumer that is going to take a good old fashioned haircut very soon.

The currency crisis that is about to hit the U.S. will make the meltdown of 2008 look like a Sunday picnic. Any company that has too much exposure to the U.S. consumer will see the value of its shares tumble.

I am at a loss to where you are getting your point of view from.
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post #6 of 14
You are apparently making an entirely political point, which is why it deviates from reality.
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post #7 of 14
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Quote:
Originally Posted by Dr Millmoss View Post

You are apparently making an entirely political point, which is why it deviates from reality.

Could you elaborate on your statement as is it ambiguous.

Also lets not forget that the as of 2006 the publicly held part of the U.S. national debt. was 4.9 Trillion dollars and since then it has been amassed to a total of 9.3 trillion.

Do you think that we can just continue borrowing in perpetuity?
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post #8 of 14
I can see you are new around here. You might want to try the political forum -- that's where people bludgeon each other with manifestos, and the apocalypse is forecasted accurately on a daily basis.
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post #9 of 14
Thread Starter 
Quote:
Originally Posted by Dr Millmoss View Post

I can see you are new around here. You might want to try the political forum -- that's where people bludgeon each other with manifestos, and the apocalypse is forecasted accurately on a daily basis.

The basis for my statement is the current fundamentals of the U.S. economy relative to the currency and the effects that is will have on the market valuation of Apple's shares. There is nothing political about it.
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post #10 of 14
Quote:
Originally Posted by Gordon Gekko View Post

The basis for my statement is the current fundamentals of the U.S. economy relative to the currency and the effects that is will have on the market valuation of Apple's shares. There is nothing political about it.

If it happens, my generation will be in charge and we'll get blamed despite it being the fault of the previous three. If it happens, AAPL's stock price will be the least concern of anyone in the country.
post #11 of 14
Thread Starter 
Quote:
Originally Posted by Tallest Skil View Post

If it happens, my generation will be in charge and we'll get blamed despite it being the fault of the previous three. If it happens, AAPL's stock price will be the least concern of anyone in the country.

We blew up a stock market bubble under Clinton that started to deflate in April of 2000, the effects of it were not felt until Bush took office and instead of doing the right thing and let the economy purge itself of the malinvestments and restructure Bush had his first stimulus with the tax refund from the budget surplus that Clinton left him. When this did not work Greenspan began cutting interest rates until they hit 1 percent and he kept them there for 1 year. The result of this wreckless monetary policy came to light with the 2008 meltdown, and instead of doing the right thing and let everything fail there was the bailouts, zero percent interest rates (currently at 15 basis points) and the stimulus. In 2008 the monetary base was 800 Billion, after everything that they did it currently resides somewhere north of 2.4 Trillion with more quantitative easing on the way.

The days of U.S. World Economic dominance will soon be behind us as the rest of the world will no longer squander their savings to support our standard of living. The dollar is going to lose half of its' value within the next 4 years, this will put the index in the 40's. If the government does not do the right thing and level with the American public about the pain that is necessary for us to take to get us out of this mess then we will could be looking at a hyper inflationary depression. Note this is the worst case but it is a definate possibility.

As far as blame goes, I would start it with Greenspan and Bush for creating the initial problem and then look to Bernanke and Obama for making it 5 times worse. The next election cycle will determine our fate.
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post #12 of 14
No politics here. Nope.

Famous last words: "I know the future." Also, something about stopped watches comes to mind.
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post #13 of 14
Twice a day, baby!
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
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post #14 of 14
So sell AAPL and buy Lenovo, Acer, etc. Besides, who cares? The world ends in 2012 anyway. If you don't already have a billion euro you're already screwed.
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