03-05-2003 20:59									#31
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quote: Originally posted by paiktis22 Eurozone: the place of choice for smart investors.

Maybe in Spain and Italy, but certainly not Germany or France right now.

	03-05-2003 21:07									#32
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Of course, there are others who feel that the United States is no longer able to interfere with Europe's advance. One person who subscribes to this view is Tatsuya Kubo, Manager of the Global Investment Management Department at SG Yamaichi Asset Management. He says, "A strong Europe is a threat to the United States and having been unable to prevent this, the US is trying to build up its authority in Asia. As far as I can see from America's policies on Asia, the US position is informed by the idea that if it can engineer a situation of economic crisis then it should be able to take over the reins of leadership politically as well." Mr. Kubo argues that the United States takes the same approach in its dealings with Japan. "The US is constantly calling for lower taxes and more government bond issues, and would be only too happy if Japan's budget deficit swelled to large enough proportions to cripple the Japanese economy."

The weak Japanese economy is the US' fault now?

Re currency swings, they happen. Nothing to worry about, unless the swings happen very quickly. Most companies with sales greater than about $100 million use currency derivatives anyway, to shield their businesses against these swings.

	03-05-2003 21:40									#33
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quote: Originally posted by DanS The weak Japanese economy is the US' fault now?

Come on, everything is US´ fault

	03-05-2003 21:43									#34
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I thought everything was Chirac's fault. Oh well (some of us) learn something new every day.

	03-05-2003 22:32									#35
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I have to second Fez on this one.

In this time of economic slowdown for many European economies including the 2 bigs of the Euro zone (France and Germany), things would be better off with a weak Euro, so that the competitivity of these economies doesn't tank further.

The ECB could take this opportunity to release some of the pressure put on the several member states who are having trouble with the stability pact, and could also use this opportunity to stop its fundamentalism against inflation.

But I don't hold my breath on this one : the ECB has shown its deep stubornness

	03-05-2003 22:34									#36
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And this is the last thing Spain needs too! A strong Euro. It is starting to bring up prices. The ECB better cut interest rates, and better do it now.

	03-05-2003 23:14									#37
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quote: Originally posted by el freako If the Dollar goes as undervalued relative to the Euro by as much as it was overvalued at it's peak, then we will see €1=$1.48

If that ever would be true, I would certainly spend my next holiday in the US.

	03-05-2003 23:49									#38
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Fears about terrorism and war have pushed the dollar down against all of the major currencies. Hopefully, now that Iraq is pretty much over we can get back to the business of making money.

	04-05-2003 00:03									#39
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A weak dollar doesn't really hurt the US, because the dollar remains the key currency. For the dollar to lose it's status the expectations for the US economy would have to fall while the expectations for the European economy would have to improve. A currency can not become a key currency just by its strength alone.

edit: also I don't think there are enough Euros for it to be a key currency, but I'm not sure about that.

	04-05-2003 00:17									#40
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quote: Originally posted by Azazel GP: 2:yes but it keeps people buying and selling currency, doesn't it?

It induces governments to waste money and to hurt their economies for Cheney-size silliness.

	04-05-2003 00:22									#41
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There is about the same number of Euros as there is Americans at the moment.. .and there will be more after the expansion to the east, but that expansion will most likely bring short-term to medium term economic instability and that will not bode well for us Euros I would think, but still this is a first time that such a large market that is comparable to US exists, and it is a first time that Euro is going strong for longer period of time in the new situation... well you never know maybe there will be a change in balance, probably not yet but maybe in the future..

UK and Sweden are not in the Eurozone yet... but if they come I think the number of people and size of the market will outstrip US...

Of course if UK joins Nafta than all the plans of Euro domination fall into water

	04-05-2003 00:29									#42
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quote: Originally posted by OneFootInTheGrave There is about the same number of Euros as there is Americans at the moment

I meant to say that there may not be enough Euro money the moment, but the population expansion of the EU will be a factor too.

It depends on the economies involved.

Too bad for the US if it happens. It would crush our economy, and the whole world would suffer.

edit: changed dollars to money

	04-05-2003 00:59									#43
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quote: Originally posted by OneFootInTheGrave There is about the same number of Euros as there is Americans at the moment.. .and there will be more after the expansion to the east, but that expansion will most likely bring short-term to medium term economic instability and that will not bode well for us Euros I would think, but still this is a first time that such a large market that is comparable to US exists, and it is a first time that Euro is going strong for longer period of time in the new situation... well you never know maybe there will be a change in balance, probably not yet but maybe in the future.. UK and Sweden are not in the Eurozone yet... but if they come I think the number of people and size of the market will outstrip US... Of course if UK joins Nafta than all the plans of Euro domination fall into water

Why? Why not have trade liberalization all across the board? Why all this mercantile silliness?

	04-05-2003 00:59									#44
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quote: Originally posted by Kidicious Too bad for the US if it happens. It would crush our economy, and the whole world would suffer.

How so?

	04-05-2003 01:05									#45
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quote: Originally posted by GP How so?

The value of the Dollar would collapse. There would be a massive shift in resources, and it would take a long time for the efficiency to recover. A global depression would either coincide or follow the collapse of the Dollar.

	04-05-2003 01:08									#46
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quote: Originally posted by Kidicious The value of the dollar would collapse. There would be a massive shift in resources, which would take a long time for the efficiency to recover, and a Global Depression would either coincide or follow the collapse of the Dollar.

I'm not agreeing or disagreeing yet. But could you tell me exactly how that would unfold?

	04-05-2003 01:15									#47
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quote: Originally posted by GP I'm not agreeing or disagreeing yet. But could you tell me exactly how that would unfold?

If the Euro were to gain key currency status the demand for it will increase, and the demand for the dollar will fall. Plus, when you enjoy key currency status you have significantly more control over your own economy and the world economy. A complete transformation would have to take place. The US would have to stop using monetary policy to stimulate the economy, and they would have to worry most about maintaining the value of the currency. The result would be high interest rates and inflation in the economy. Shall I go on?

	04-05-2003 01:17									#48
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The US would have to stop using monetary policy to stimulate the economy

Roo?

	04-05-2003 01:20									#49
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quote: Originally posted by DanS The US would have to stop using monetary policy to stimulate the economy Roo?

The US enjoys more foreign investment, because of its key currency status. If it were to lose its status it would need higher interest rates to attract this investment.

	04-05-2003 01:23									#50
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We enjoy foreign investment because capital flows to oopportunity. Most people beleive that in the modern world, capital moves extremely readily. Even if there were a step decrease in the value of the dollar, that would not change the incentive for future investment. Also, my impression is that foreign capital flows are often hedged on the currency issue. So they can just invest in the growth projects or invest in the currency independantly.

	04-05-2003 01:25									#51
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What does it mean to be a "key currency"?

	04-05-2003 01:27									#52
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GP,

You are neglecting the importance that risk, uncertainty and expectations will play. Also, the Euro would start getting more foreign investment, and that would cut into the US share.

	04-05-2003 01:30									#53
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You are neglecting the importance that risk, uncertainty and expectations will play.

What's that have to do with the US currency? Wouldn't it rather be based on the actual on-the-ground realities?

	04-05-2003 01:32									#54
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quote: Originally posted by Kidicious GP, You are neglecting the importance that risk, uncertainty and expectations will play. Also, the Euro would start getting more foreign investment, and that would cut into the US share.

Now I understand why you could only contribute a semantic argument in the Exxon Mobil thread. You are a bit light on this topic, no? You just mutter platitudes without really understanding.

I adressed the currency risk uncertainty with the hedging comment. Project uncertainty exists regardless. If you are trying to connect the two, you need to explain how this occurs.

	04-05-2003 01:33									#55
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quote: Originally posted by DanS You are neglecting the importance that risk, uncertainty and expectations will play. What's that have to do with the US currency? Wouldn't it rather be based on the actual on-the-ground realities?

Great minds think alike. We need a piling-on smilie.

	04-05-2003 01:33									#56
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quote: Originally posted by GP What does it mean to be a "key currency"?

International trades are usually denominated in the key currency. In order to deal in the key currency you have to keep or store of the key currency. This creates more demand for your currency. There are lots of benefits to it. One is that you get more trade opportunities.

	04-05-2003 01:37									#57
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quote: Originally posted by Kidicious International trades are usually denominated in the key currency. In order to deal in the key currency you have to keep or store of the key currency.

So what are the amounts of these offshore pots of money. And why assume that the rate of exchange will crater because of exchange?

And even if it did, wouldn't this be a step change? How would that affect normal operations going forward.

quote: This creates more demand for your currency. There are lots of benefits to it. One is that you get more trade opportunities.

What trade opportunities? How does this work?

	04-05-2003 01:50									#58
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quote: Originally posted by GP So what are the amounts of these offshore pots of money. And why assume that the rate of exchange will crater because of exchange?

The trade deficit is what creates these the dollars (also called Eurodollars. Nations that have a favoralble trade ballance end up with these dollars. Since we enjoy key currency status nations what to keep getting and using these dollars. If a nation takes over key currency status nations will want to trade more with them so that they can get their currency which they will need to make international transactions.

quote: Originally posted by GP And even if it did, wouldn't this be a step change? How would that affect normal operations going forward.

The US would have to change its whole economic strategy, and who knows how that would work out and how long it would take the US o recover.

quote: Originally posted by GP What trade opportunities? How does this work?

Demand for your currency determines demand for investment and exchange in your nation. The best way to get a currency is to export to that nation.

	04-05-2003 01:57									#59
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I think this Kidicious character is Roland trying to wind everyone up.

The key currency nonsense was highly amusing. For that I thank you.

	04-05-2003 01:58									#60
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Kid, you are really, really silly. Even as you examine your own comments, you must realize that you don't actually know how these things work. You certainly can't give insightful comments.