27-06-2002 16:03									#1
	Euro vs Dollar Support Apolyton, buy GURPS/ Alpha Centauri

Seems the world is losing faith in the USA when it comes to stocks and bonds, and is flocking en masse to Europe. And Europe isn't exactly doing too well itself either. What is the reason for all this.

For those who don't believe it is happening, should look at the recent Euro/Dollar currency rates.

	27-06-2002 16:05									#2
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EU isn't the main target for the terrorists

	27-06-2002 16:07									#3
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European beers are far better :

	27-06-2002 16:12									#4
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"EU is just boosting because US$ sucks people who think €uro is better
know nothing about economics; US is far better in the long range
Europeans know nothing about economics blah blah blah..."

Waiting for rant.

	27-06-2002 16:14									#5
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Yes but US don't know anything about good beers ...

	27-06-2002 16:15									#6
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"What is the reason for all this."

The US needs to attract roughly 450 billion $ in net investment per year to fund the current account deficit. They attract 600 billion, $ rises. They attract 300 billion $, dollar drops. They see net outflows, the dollar is dead.

	27-06-2002 16:16									#7
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quote: Originally posted by ZoboZeWarrior European beers are far better :

That is probably the best piece of FX research I've ever seen

	27-06-2002 16:27									#8
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It's also probably the only one that makes remotely sense.

	27-06-2002 17:39									#9
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quote: Originally posted by Lemmy EU isn't the main target for the terrorists

Britain might be.

	27-06-2002 17:54									#10
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oh c'mon who's interested in britain
it's paradise for immigrants together with belgium

	27-06-2002 18:10									#11
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Considering the Euro is still not equal to 1 dollar, I think its a little early to start arranging the Dollars funeral. Counties don't suddenly in 1 week fall from grace (not without a major catastrophy anyway) .. it happens over decades, the Euro may take over eventually .. but I believe in 20-30 years time, we will be looking at monetry union between N.America and Europe anyway .. at least, some form of exchange rate mechanism, which holds the values between 2 points.

I think its one of those temperary glitches, The US has had some bad news recently, what with 11.09, and Enron/WorldCom, and also a general feeling that it is becoming more isolationist again (although I don't think that is the case in reality).

Anyway, €-$ should stand at parity at the moment, anything either way is simply markets being markets. lets see in 5-10 years time.

	27-06-2002 18:11									#12
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I know. All the terrorists have to do is sneak into some lorry and they'll be here.

	27-06-2002 18:31									#13
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"Considering the Euro is still not equal to 1 dollar"

How is the parity level relevant, apart from a little psychology ?

	27-06-2002 18:53									#14
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It was its original setting .. it was left to float (currency free) on the markets where it devalued to about 90cents .. since the currency is now a real thing, it has regained its value . Makes sence to use the dollar as a benchmark .. also stops all the Euro nations squabling over which currency should be the base mark.

	27-06-2002 18:54									#15
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It started out at 1.18 or so. And there is no need for a "base mark".

	27-06-2002 18:58									#16
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Just out of curiosity what is the current rate?

	27-06-2002 19:04									#17
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0.985

	27-06-2002 19:04									#18
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Really? Hmm... right now I am just praying for some sort of weakness in the pound so that the rest of my vacation will get a bit cheaper.

	27-06-2002 19:07									#19
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I didn't mean its original value was parity, it was set up to match the dollar .. it was set up at above 1 as they knew full well it would fall in value during the period where it was not a real currency.

I agree that parity is a psychological thing, especially to the markets... but it does have ramifications regards to trade, which in turn directly affect profits/share prices in the long run .. I personally do not consider 1/1 a strong Euro or a weak dollar ..

What I was trying to say originally was, that you cannot assume the dollar is dead, just because it has lost some value against the euro .. not is it an indication of any strength in the European economy that will lead to it becoming the no.1 economy .. if in 5-10 years were no longer sitting at 1/1 , we will see which economy was strongest, and that would be a much more valid test than a weeks change on the markets.

	27-06-2002 19:09									#20
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Or should I just buy a lot of pounds while the dollar has some semblance of strength left?

	27-06-2002 19:10									#21
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Rate isn't interesting. Change of it is.

	27-06-2002 19:11									#22
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"I didn't mean its original value was parity, it was set up to match the dollar .. it was set up at above 1 as they knew full well it would fall in value during the period where it was not a real currency."

No. It started at that rate as it was the 1:1 successor of the ECU. The ECU was created by a reference to the $ in the 1970s, but has been all over the place below and above 1 $.

"What I was trying to say originally was, that you cannot assume the dollar is dead, just because it has lost some value against the euro .."

I said when the US sees net outflows the $ is dead. Meaning it will drop very sharply.

"if in 5-10 years were no longer sitting at 1/1 , we will see which economy was strongest"

Exchange rate and economic strength are only very losely related.

	27-06-2002 19:16									#23
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Roland, does that mean that since the 70s Europe has caught up with the US and had a 1.18 tiems as strong *insert whatever is decisive for exchange rate here* in comparison with the US of the 70s nowadays?

	27-06-2002 19:26									#24
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No, I'm not even sure it started out 1:1. It was based on a basket of european currencies using the $ as a starting point for calculating.

The $ has fallen vs a synthetic euro using the DM as a benchmark from 2:1 to 1:1 since the early 70s. Because it was overvalued back then, and US inflation was higher.

	27-06-2002 20:29									#25
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So should we invade them now?

	27-06-2002 20:46									#26
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No, we should wait for 1 euro = 1.40 $.

	27-06-2002 20:52									#27
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What would be the preconditions for such a development?

	27-06-2002 22:18									#28
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Wasnt the euro made to match the $$$$ ???? I mean, it wasnt as much of a competitive thing as it was to single the whole euro currency so trade and travel between european nations could be made easy.


Please dont feed the trolls.

	27-06-2002 22:28									#29
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2 years ago if someone said that the euro would compete with the dollar he would have been laughed off.

now the euro is doing just that.

now all i want is more euros please.

	27-06-2002 23:38									#30
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1. It's so funny to hear this kind of national pride wrt exchange rates. Especially from people who claim they are sick of hearing it.

2. Looks like our companies and assets will be cheap, now. Feel free to buy more Chryslers and than brag about it...