With inflation fears low for those living in the Philippines and US public debt near record highs, I wouldn’t expect the dollar to rise a lot in the near future.  I don’t think the dollar will necessarily fall much either though.  I can live with stable.   The Philippines also has high public debt.   Both countries are hovering around 60% debt to gross domestic product.

Inflation in the Philippines is under 4% for 2010.  Inflation in the USA is under 2% for the last two years.  I know this because I have

stormy times for the us dollar

Stormy Times For The US Dollar?

not received a cost of living adjustment for the last two years.   I’ve never wanted inflation before but a little would be good now.  Yes, its selfish.   Inflation in the Philippines is low but the dollar falling greatly reduced my spending ability.

The central bank of the Philippines believes inflation will fall a bit in 2011 to around 3.5 percent and around the same for 2012. Trying to predict inflation rates though, it is a tricky business.  Armed conflict in the erupt in key oil producing countries and change things a lot.   Storms could hurt food supplies.   So many things could happen to change the outlook.

With the economies of the USA and much of Europe still in dire condition, I think inflation will remain low.   As the US recovers, it will have to take steps to reduce the rate of bonds it is buying.  It has been buying its own bonds to flood the market with dollars.  It is doing this in an effort to keep banks lending and businesses expanding.   The Federal Reserve Bank has already hinted that it will need to reverse that trend by the end of 2011.

The dollar might have gone much lower in 2010 had the Euro not gone into a massive plunge.    The Yen is also in trouble.   The dollar is not strong but many other currencies are doing worse.  Australians are happy with their currency but that is unlikely to last.

The dollar has been hovering around 44.5 peso for 1 US dollar for the last few months.  I’m not confident it will stay there but I remain hopeful.  Some day it will likely be bouncing around P55 again and we’ll all be so happy.   Then it will go down again.   Though I don’t expect to see P55 any time soon.

The USA is recovering from one of the worst financial downturns it has ever seen.    That recovery will be long.  I just hope it doesn’t outlast me.   I’d like to see boom times return.   I think we’ll see that in early 2012.   When it does, there will be inflationary pressures on the dollar.  However with all this debt, the USA will be in a great position to buy back dept and put upward pressure on the dollar.

I keep reading expat stories on the “end of America.”  Oh geesh, yeah, right.  The Russians predicted the USA would have a civil war in 2009 and break up into six countries in 2010.   The USA will be just fine.

To read other articles click this link:  dollar to philippine peso.

What do you think?  Will the US dollar fall,  rise or stay stable over 2011 against the Philippine Peso?  What do you think the exchange rate between the peso and the dollar will be.  If you’re brave, give us your guess.  I’m not that brave.   But I will go out on a limb and say stable for 2011 but with some downward pressure.  Only time will tell if the dollar to Philippine peso rate will hold its downward trend.

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