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The Euro has been in free fall versus the dollar this year. What conclusions can be drawn? Here are mine:
The Euro became overvalued versus the dollar though now the opposite may be occurring
The dollar seem to go inversely to the price of oil. But it seems that the Europeans would benefit even more from a lower oil price, why haven't they?
Just that the US economy is performing better than the Europeans.
Europe costs more and people make less compared to the USA, eventually that affects the currency
The dollar was negatively impacted by the 911 attacks and the US response which included negatvie world opinion of US actions. We are now seeing things go back into a more normal pattern.
-The expected move by the Fed to increase interest rates, thus causing a demand for the Dollar.
-ECB expected actions that will weaken the Euro.
-Greece.
-The unreported one, which is sanctions work both directions; I hope Europeans think Ukraine was worth it.
The Euro has been in free fall versus the dollar this year. What conclusions can be drawn? Here are mine:
The Euro became overvalued versus the dollar though now the opposite may be occurring
The dollar seem to go inversely to the price of oil. But it seems that the Europeans would benefit even more from a lower oil price, why haven't they?
Just that the US economy is performing better than the Europeans.
Europe costs more and people make less compared to the USA, eventually that affects the currency
The dollar was negatively impacted by the 911 attacks and the US response which included negatvie world opinion of US actions. We are now seeing things go back into a more normal pattern.
Comments and conclusions?
Oil is priced in dollars so an it should move opposite of the dollar and your last two points are off base
The big message should be socialism, big government, lots of regulations and government control destroys the private sector and puts these countries on the road to poverty. Many far eastern countries, with a lot less govt. are doing much better. If we continue to follow the examples of Europe, the same will happen in the USA.
The Euro has been in free fall versus the dollar this year. What conclusions can be drawn
While super high population growth rates are either associated with the poorest nations of Africa or the wealthy Arab nations, in general some population growth is normally associated with a healthy economy. Spain is the only major country in Europe with a population growth similar to the USA, and it is driven by illegal immigration. Eastern europe has the highest negative population increases in the world.
Hungary now has the same population it did during the Hungarian Revolution of 1956. Ultimately that has to affect the European economy.
Annual Population Growth Rate %
-1.02 Moldova
-0.84 Bulgaria
-0.69 Estonia
-0.64 Ukraine
-0.63 Latvia
-0.46 Serbia
-0.30 Lithuania
-0.29 Romania
-0.25 Slovenia
-0.22 Hungary
-0.19 Belarus
-0.18 Germany
-0.13 Croatia
-0.12 Bosnia and Herzegovina
-0.12 Poland
-0.03 Russia
0.00 Greece
0.01 Austria
0.04 Belgium
0.04 Finland
0.06 Slovakia
0.09 Monaco
0.11 Portugal
0.16 Czech Republic
0.21 Macedonia
0.22 Denmark
0.25 Gibraltar
0.28 Italy
0.30 Albania
0.32 Malta
0.42 Netherlands
0.44 France
0.54 United Kingdom
0.64 Iceland
0.75 Switzerland
0.80 Sweden
0.83 Liechtenstein
0.85 Spain
1.12 Luxembourg
1.16 Norway
1.22 Ireland
Oil is priced in dollars so an it should move opposite of the dollar and your last two points are off base
Besides which a larger part of their price is taxes on fuels which is why they haven't seen the benefit the US consumer has. Also Europe has a whole imports a larger per centage of goods than US. When dollar drops consumers here can shift to domestic product as they become cheaper. Not so much Europe. Only Germany likely to make large gains in trade off there. Largest exporter within EU and to the world market. Some say it will likely end same as when Japan made move in 80's which caused huge drop in currency. Remember this is a move to decease labor cost while increasing inflation.
It is all because of current state of oil production by US and the future plan of self sustaining the demand and even exporting the surplus. USD is the denomination of oil, hence, high USD means the value of oil relative to the dollar falls.
US (being one of the largest oil importer) was importing 60% of its oil and it is now only about 30% (from different parts of the world). It is like saying, "oil is no longer a business to deal with for US". There is a domino effect to Europe.
The big message should be socialism, big government, lots of regulations and government control destroys the private sector and puts these countries on the road to poverty. Many far eastern countries, with a lot less govt. are doing much better. If we continue to follow the examples of Europe, the same will happen in the USA.
Show me a far east country (that isn't a tiny money laundering tax haven) that has less government than the US, and yet has a higher living standard than... pretty much any country in Europe.
The problem is that the Euro as implemented was a dumb idea, *if* you believe that its real purpose was the one that was stated. I tend to believe that the people who perpetrate these big changes know pretty precisely how it will turn out.
Its a reaction to EU stimulus starting which has not even really gotten to bank level yet. People have been going for sometime to dollar and other things to protect wealth. Whether it last is a guess as no one has been here before. A similar move by japan I the 80's had same reaction at first but not in long run. Note that other Central banks quickly and without notice dropped rates in reaction. You heard the phase trading on the news;well this is it pretty much. Even US stock reacted today betting it pushes back FED raising rates.
Currency moves if anything are random around the PPPs. Most of the time they are far away from a PPP equilibrium and show wild swings in both ways. To assign cause and effect to these moves is pure fantasy IMO.
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