U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 10-08-2010, 02:05 PM
 
Location: Atlanta, GA
1,200 posts, read 1,932,462 times
Reputation: 845

Advertisements

Euro Leaders In Disbelief: Don't You Fools Know We're Still Verging On A Crisis Here?

[LEFT] Eurogroup President Jean-Claude Juncker said this morning that $1.40 on the euro is just not realistic or in line with economic reality, and he's right.
The continent is still potentially on the verge of getting ripped apart, with persistent problems in Ireland and Greece.
And when you see German exports weakening sharply, it's not hard to see why they're so concerned.
still-verging-on-a-crisis-here-2010-10#ixzz11ndeMgdo
[/LEFT]


Euro is rallying because Japan and Brazil and US are beating their chests about quantitative easing, while EU imposed austerity. EU man doesn't seem happy with where Euro is though.

But with everyone going down, someone has to reap the benefits of a strong currency... Maybe they'll enjoy the cheaper oil..
Rate this post positively Reply With Quote Quick reply to this message

 
Old 10-09-2010, 02:40 AM
 
87,466 posts, read 84,913,413 times
Reputation: 63011
Quote:
Originally Posted by jimhcom View Post
Winning? How so? When you are running a trade deficit, a weaker dollar makes imports more expensive and therefore is inflationary. Inflation in consumables, at the same time as a recession is lowering incomes, is hardly winning for the people.
cheap labor has been either dropping prices or holding prices on lots of stuff making the trade deficit a moot point in reality. i can tell you in our own company if we had to manufacturer the parts we make in china here those items would sell for 20- 25% more.

with soaring commodity prices the last decade we would have been in a real pickle inflation wise if it wasnt for this cheap labor in the equation. even with the slight increases in pricing from the dollar dropping it was pale compared to the increases we saw in raw materials.

imports have been forcing prices lower then they should be not raising them ... the dollars movement is far overshadowed by labor costs.

in fact most large manufactures hedge movement in currancies with futures contracts ... thats why prices stayed fairly consistant for long periods of time when the dollars movement should have reflected more of a change.

Last edited by mathjak107; 10-09-2010 at 02:55 AM..
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-09-2010, 05:45 AM
 
87,466 posts, read 84,913,413 times
Reputation: 63011
just like kellogs locks in the prices of wheat and corn for the year most companies involved in import or export stabilize there prices as well with currancy contracts. but thats not to say long term trends wont raise prices but the labor costs hold those down even with effecting the trade deficit numbers

in this day and age in global markets, while trade deficit numbers make good political news i have found them much to do about nothing.

with the us accounting for only a fraction of what the world has to offer why shouldnt imports be higher then exports. lower prices on technology and world class products have been some of the benefits.


as an example of what companies do to hedge against currancy changes"

"Babes in Riskland.
Exports comprise much of Mattel Toys' $1.4 billion in yearly sales. "While all companies welcome growth an profitability, managing seasonal cash flows and currency risks is always a concern, even in toyland," said William Stavro, the Mattel assistant treasurer. According to Stavro, "The company starts out each year with a 50% forward cover of its annual currency exposure." This cover is then modified according to advice from an outside currency manager"

Last edited by mathjak107; 10-09-2010 at 05:57 AM..
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-09-2010, 09:49 AM
 
48,508 posts, read 89,102,623 times
Reputation: 18195
Bascailly the real problem in europe is very hard to address because so mnay are dependent on governamnt for them to really take the steps needed. This isn't the first time they have faced crisis from governamnt taking so close to 100% of GDP.If you watched the Euro conference it was like a idfunstional family meeting with little agreement.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-11-2010, 06:37 AM
 
Location: San Diego California
6,797 posts, read 6,668,368 times
Reputation: 5180
http://pragcap.com/dollar-dives

Interesting article.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-12-2010, 01:12 AM
 
Location: Brisbane
4,044 posts, read 6,042,012 times
Reputation: 3275
Quote:
Originally Posted by AnesthesiaMD View Post
We (the US) are winning.
EUR/USD is now at 1.39, an 8 month high
The Japanese yen is at a 15 year high against the USD
And the Aussie dollar is almost at parity with the USD. The friggin AUSSIE DOLLAR????
Well Australias government debt is 3% of GDP, the unemployment rate is 5% and a term deposit with any of the major banks hear will get you a return of 5.5-7%.

The aussie has gone up so much in the last few years that if any aussie invested US$10,000 on the dow jones index evenly across all 30 stocks when it hit its low of around 7500, sold now and coverted their money back to Australian Dollars they would actually have LOST around $1000.

Its hard to see any real benefits from a strong currency, other than I might finally get to go on that cheap holiday to the USA I have always wanted.

Last edited by danielsa1775; 10-12-2010 at 01:47 AM..
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-12-2010, 03:43 AM
 
Location: NJ/NY
15,795 posts, read 12,238,803 times
Reputation: 11379
Quote:
Originally Posted by danielsa1775 View Post
Well Australias government debt is 3% of GDP, the unemployment rate is 5% and a term deposit with any of the major banks hear will get you a return of 5.5-7%.

The aussie has gone up so much in the last few years that if any aussie invested US$10,000 on the dow jones index evenly across all 30 stocks when it hit its low of around 7500, sold now and coverted their money back to Australian Dollars they would actually have LOST around $1000.

Its hard to see any real benefits from a strong currency, other than I might finally get to go on that cheap holiday to the USA I have always wanted.
Real benefits? For whom? Maybe not for businesses, but for the general population, a strong currency goes hand in hand with a good economy. You said it yourself, 5% unemployment. People can save money and not feel like saving is a losing proposition. Plus, you are in a position where you can inflate a little without too much worries. the best place to be is in the middle. Too strong has it's problems, but I would rather be too strong than too weak.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-12-2010, 03:53 AM
 
87,466 posts, read 84,913,413 times
Reputation: 63011
id find a new set of data numbers to even worry about..... trade deficit numbers except politicaly seem to be the least of what impacts us as i mentioned earlier. certainly nothing i add into my own equations of soothsaying whats next for us. with the us accounting for only 25-30% or so of all the goods and services offered world wide there is alot more to offer to us then we can offer back.
thats all those numbers are really telling us.

there are other factors as well : think about the fact that the only reason a dollar is accepted say in tokyo is because the person who takes it knows someone will take it from them ,and someone will take it from that person. ultimately the guy at the end is taking that dollar because he will buy something eventually from america. you cant spend a dollar in tokyo, it must be traded for local currancy so the only person that dollar has value to is the person at the end of the food chain who will spend that dollar eventually on something american.

it could be spent on our bonds, our stocks, real estate etc ,these dont show up in the trade deficit numbers. or it could be spent on goods and services here but eventually dollars have to work there way back here... and so the dollar cycles based on so many things including the above,...

ever find a foreign coin in your pocket.. pretty much there is nothing you can usually do with it as it cant be spent here and no one will take it from you,..

but if you found someone going to that country or someone who knows someone buying something from that country they would then have a reason to take it from you... ulitmately at the end of the food chain the people at the bottom want those dollars to spend here or convert to local currancy but they can only do that if someoone at the end will eventually spend them here. .


simplified greatly but you get the point.

Last edited by mathjak107; 10-12-2010 at 04:23 AM..
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-12-2010, 11:45 PM
 
10,854 posts, read 8,543,212 times
Reputation: 3121
Quote:
Originally Posted by danielsa1775 View Post
Well Australias government debt is 3% of GDP, the unemployment rate is 5% and a term deposit with any of the major banks hear will get you a return of 5.5-7%.

The aussie has gone up so much in the last few years that if any aussie invested US$10,000 on the dow jones index evenly across all 30 stocks when it hit its low of around 7500, sold now and coverted their money back to Australian Dollars they would actually have LOST around $1000.

Its hard to see any real benefits from a strong currency, other than I might finally get to go on that cheap holiday to the USA I have always wanted.
A strong currency makes products a country's imports cheaper, however it's exports become more expensive to other nations. Countries with strong currencies also get more value for their companies money when they invest in other countries with weaker currencies. If a currency is strengthening it could attract foreign investment if other economic factors are strong. You not only get the potential return on an investment you also get benefit of extra profits from currency appreciation if the currency continues to increase in value compared to other currencies.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-13-2010, 03:27 AM
 
87,466 posts, read 84,913,413 times
Reputation: 63011
theoretically thats how its supposed to work but in reality it plays out differently...between currancy hedging by manufacturers and the fact that the more of some thing we buy the cheaper it gets like flat screen tv's the more the equation is out of kilter.
think about all those billions china puts back into dollars by buying our treasuries. that money that just came back to dollars isnt reflected in those trade deficit numbers either.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics

All times are GMT -6. The time now is 08:31 AM.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top