The euro is at

[Hieronymus]

$1.193, thanks Junior.
Under this administration it has gone from approximately $.85.:wtf:

[tritsofme]

1. What is your solution?

And what would you like it to be at?

I think this hurts the Europeans more than it does us.

[AP]

3. It's a reflection of the fact that investors are beginning to see Europe

as a competitve, well-regulated economy with lots of good business opportunities, and with a stable bond and growing equities markets.

Had Bush had not given corporate America a free ride, America would have been able to compete. Europe was inevitably going to get stronger, but it probably would have taken longer, and it could have been done in a mutually beneficial, liberal way.

[tritsofme]

5. I see a lot more hope in the US economy right now

than I do in Europe. GDP growth in the Eurozone will be less than 1% next year as it was this year. The strong euro only perpetuates this.

They have a much larger problem with an aging population than we do, and it makes our SS troubles look like a walk in the park. They have a much lower birthrate throughout most of Europe, and they are generally more hostile to immagration than we are.

Europe has a few choices, cut social spending dramaticaly, increase the birthrate, or massive immagration, and probably a combination of all three. The expansion of ten more EU members in Eastern Europe is also a good sign as they have a bit of a younger populace, but those countries bring substantial burdens as well.

[buycitgo]

7. what are you, a comedian?

surely not anyone familiar with economics

here's the deal, briefly

we have an ever worsening balance of payments problem, which is running about 500 BILLION a year, and it's accelerating every month, to 5% of GDP, which is VERY BAD. So bad, in fact, that even Greenspan's hellbent for Bush Fed has acknowledged it (you could look it up).

predictions are that next year, we're going to need over a TRILLION bucks of inflow next year to stop the run on the dollar.

and what happened during this "boom?" well, guess what?

in September, inflow went from 50 billion in August, to FOUR billion!

know what that means? According to Financial Times columnist Daniel Bogler, it means that Asian banks are starting to get skittish about keeping their cash here, meaning a vicious cycle could be starting, meaning a run on the dollar similar to that on the banks back in 29. remember what happened after that?

moving right along, this affects the price of gold, which tends to jump when the standard monetary unit falters.....guess what the POG is today. what was it a year ago.......I could kick myself for not putting my stock money there then, but I've been afraid to do anything with anything since you know what stole the election.

factor in dumbo's hardheaded (election-oriented) protectionism, and even Greenspan sees a strong possibility of a hard crash in the dollar, rather than a gentle re-orientation to other monetary standards. Why? Back to the Asian banks, which hold over a Trillion in US debt, a significant proportion of the over FORTY PERCENT of foreign owned US tradeable debt, 26 percent of US corporate bonds, and 13 percent of US equities.

so what might happen as a result of these scary numbers, called by
Bogler the "scariest statistic of the month"? well, the Financial Times is no left wing, wet pants liberal rag, and they're anything but sanguine on this bleeding of US assets.

thoughts on what may happen if this outflow continues, especially if it escalates?

first thing, if you own a home, and it's on an ARM, get out of that right now, especially if you have lots of money tied up in it, cause the first thing that's going to happen is the threatened/dread very fast uptick in US interest rates.

Why? As foreign investors flee the dollar, a breaking point will hit, and Greenspan will be FORCED to raise interest rates, in order to stop the money going to Euros, or whatever unit yields the best return.....watch out if OPEC goes away from the dollar; if that happens, we're really screwed--the outflow process will be sped up that much more.

some people predict interest rates of 10-15% (who knows...remember 1980....I had a CD for 22%), and if that happens, that housing bubble you've been hearing about will make the Johnstown Flood look like a spilled coke can.

and nobody, of course, is talking about this.....certainly NOBODY at CNBC, Foxfool Cavuto, Lou Dobbs, Rukheyser. they're just cheerleading buffoons. Hope I/m wrong, but am wondering if gold is still a bargain at its current price.

have fun, though, enjoying this great new economy

[Imajika]

8. Yes, those are things that MIGHT happen..

...but then again, none of those scary scenarios may pan out at all.

The bottom line at the moment is that the US economy is beginning to grow fairly rapidly, while most European economies are flat and stagnant.

Infact, both Germany and France are looking to cut taxes, slash social spending and loosen regulation on business in an attempt to get their economies to actually grow at a reasonably healthy clip and a least put some meaningful dent in their near permanent 10% unemployment rates.

Do I personally hate the fact that Bush seems to have abandoned the strong dollar policy? Yes. But for me, it has a lot more to do with the fact that I travel quite often and my buying power overseas is crumbling.

Do I see big risk in the intentional weakening of the dollar? Yes, there are a lot of potential downsides. But, at least in the short term, a lot of American business's are much better off with a weaker dollar.

Personally, I rather suspect most of the fears you've mentioned will just not become reality in any significant way. I lean towards believing that as the American economy accelerates, interest rates will indeed increase at a moderate rate and the American dollar will pick up in value again against the Euro and others.

And by the way, from what I've seen, I'd much prefer to do business in the American economy than I would virtually anywhere in Europe. Just look at Germany and France - both of those economies are reletively unhealthy, and I find it a somewhat sad indictment of most EU nations that they can do little more than sit around wait for the US economy to grow rather than taking serious steps to do what it takes to improve their own economies independent of what America is doing.

I'd far prefer the US Government work to expand the American economy, maintain the strong dollar policies of the past and keep US deficits at a minimum - which is what Clinton achieved. Saying that, I am not so terribly worried about a short term declining dollar, so long as that does not result in the primary reason for any US economic recovery. It may be that in the short term a declining dollar has helped kickstart the American economy. If after another couple years the dollar has not improved to at least some degree, then perhaps I'd be more worried.

Imajika

[AP]

10. US economy is growing because we're taking billions of dollars from the...

...future and giving it to the biggest companies and richest individuals today.

People who understand economics, including central bankers around the world, know that this is a recipe for disaster.

[MoonRiver]

11. And the way Jr. keeps charging on our national credit card,

ruin may be much sooner than even the most pessimist of economists predict. We have a wildly out of control administration in terms of fiscal responsibility.

[RainDog]

23. you must have gotten talking points from David Brooks

because this is a paraphrase of an editorial of his in last week's NYTimes.

what gets me is that the right in this country have been saying how weak Europe is, how it is falling apart because of it's social spending, for at least the last twenty years.

and yet, they still manage to provide health care for their citizens, a social safety net, educational opportunities for those who work hard no matter their income, and much, much better food to boot.

seems like crying wolf to me.

Bush is alienating the entire world. as we have already seen, fewer and fewer are willing to commit real troops to the march of folly which was and is Bush's illegal and deception-based invasion of Iraq.

bush's economic gurus have stated they want to starve the U.S. govt. as he makes sure that we have a greater disparity in the distribution of wealth with his socialism for the rich and feudalism for the middle class, fewer and fewer people will have money to propel our consumption economy.

after a point, the rich simply horde, based upon past actions.

As Bush alienates the rest of the democratic world, they can fight back, as is now developing, via trade wars.

other countries can vote with their conversion of dollars to euros.

so go ahead and ignore the economic crisis that Bush is pushing upon this nation.

my advice for anyone with any savings/disposable income would be to get out of debt, stop taking on debt, save as much as possible rather than spend and open an account in a European country so that your savings can actually earn some interest.

not as big as the stock market, but as Krugman notes, lots of insiders are selling off to optimistic bubble buyers.

since Bush treats those of us who are not wealthy like second class citizens, I see no reason to support his misuse of us by giving any more dollars for him to spend on war.

not only that, but those he favors already have their offshore accounts, so they don't give a fuck about any of us, either, or won't until they're faced with general strikes because of their abuses of the rest of us.

[Imajika]

9. What?

"It's a reflection of the fact that investors are beginning to see Europe as a competitve, well-regulated economy with lots of good business opportunities, and with a stable bond and growing equities markets."

It is?

What investors think Europe is a competitive, well regulated economy with LOTS of business opportunities?

Europes economies, at the moment, are just not performing well at all. Both the German and French economies, the powerhouses of Europe, are doing quite badly. Both are seeing marginal growth if any at all. Both have deficits in flat violation of the EU cap. Both have chronic unemployment rates at a near permanent 10% level.

There are a lot of reasons for currency fluxuations, and the downward trend of the dollar - but I certainly don't believe it is a reflection of investors beginning to see Europe as an economy with "lots of business opportunities".

Imajika

[AP]

12. The European economies are dependant on American economy. That's

why they're forming an EU ... to end the dependancy. That the EU economies didn't suffer so much after 2000 is a testament to their new ability to withstand the crappiness of the US economy.

The investors who have been pulling out their money from the US think Europe is a better market. Didn't I read last month that direct US investment from overseas last month decreased from 50 bil to 5 bil. And what else happened last month? The euro when up to a record high. Hmm. Maybe people are buying Euros so they can make investments in Europe?

Incidentally, the UK has record low unemployment and record high wages. That's the sort of thing that's going to stir economic development.

Let's see what happens in the next year or two.

[tritsofme]

14. Incidentally, the UK is not part of the eurozone.

I still say the coming pension crisis in Europe will be its doom.

[AP]

17. It's not using the Euro, but the pound-euro rate is fixed,

(right?) and the British economy is very tightly linked to the European economy. I used it as an example only because I know for a fact the British economy is doing well. I know about those other problems in France and Germany (defecits and unemployment) but I suspect that everything will be moving in the same direction as the UK.

[tritsofme]

19. No, the pound is completely independant from the euro,

If you didnt know that, than your obviously not following things very closely.

Britain is an exception in Europe, and their economy is in much better shape than those on the continent, where unemployment is teetering around 10% and their economies are barely staying out of recession.

France and Germany are in breach of EU budget rules as their deficits have exceeded 3% of GDP for three years in a row, and it will be that way for a few years.

[AP]

24. I guess not. But that's why I asked.

But I do think it's pretty obvious that thanks to the anticompetitive Republican economic policies in the US, and the European pro-competitve economic policies, that Europe, and Britain along with it, will be making some pretty big economic gains beginning very soon, and that weaknesses today are exactly the reaon there is an EU -- ie, the EU no longer wants decisions made in DC to determine what kind of economy they're going to have.

[Hieronymus]

6. You must be ecstatic about Argentina.

:wtf:
Their money is worth next to nothing.

[nadinbrzezinski]

2. But most of the sheeple only care

bout Jacko and murder and other stories... that will not affect them
personally

For a refresher, the Pound was replaced by the Dollar and now we
seem to be witnessing the Euro replacing the USD, THANKS Junior

[billbuckhead]

4. The Dollar is like a car with bad resale value.

90% of what is made in America sucks. We had to bring foreigners in to teach us how to build cars.

[Deja Q]

13. Which is cool since most of that isn't even made in America

Sweatshots, foreign outsourcing...

The US is digging its own grave...

[oasis]

15. Americans are re-financing their homes and going into credit card debt.

That's what is fueling the economy right now.

[TexasMexican]

16. Makes me wish...

I had converted all my dollars to Euros for a while.

[Adjoran]

18. Some of the statements on this thread

betray, contrary to assertions otherwise, an ignorance of international economics and monetary policy.

The Euro debuted at 89¢, instead of the targeted $1.10. Since that time, the European central banks have poured hundreds of billions into buying the Euro to raise its value. The fall of the dollar corresponds to this policy.

Normally, the US Treasury, along with our dependable Japanese allies, would have bought the dollar to prop it up. We didn't, for two reasons.

First, the last several recoveries have been led by the export sector, and a weaker dollar makes exports cheaper to the buyers. This provides additional stimulus to the economy going into an election year.

Second, Bush wished to make the Europeans pay for their actions, to discourage them from future similiar tactics, and in part to punish them for not supporting him on Iraq. European exports are less competitive with ours with a lower dollar, meaning we gain market share at their expense.

With the strength of our economy, the dollar is expected to come back on its own. If it doesn't, intervention is always an option since we haven't done it already.

To suggest we emulate British policy because they are "doing well" is preposterous. Their 3rd quarter growth was 2.5%; ours was 8.2%. The continent only grew about 1.5%. Why on earth would we copy that?

There is no sane economist predicting double-digit interest rates in the forseeable future. We have strong growth and low inflation. The only such predictions I've seen are from people trying to sell gold coins at a high premium.

Presidents get far too much credit for good economies, and too much blame for bad ones. They really have relatively little effect at all, and what they do have doesn't show up until they've left office anyway. The economy is beyond direct control by "stimulus" by the government, at least in the short term. It runs in cycles, which vary in length and have little to do with political manipulations.

We cannot win by putting fanciful interpretations on the data.

[tritsofme]

20. Thank you, you said it much better than I can.

nt

[leftofcentre]

22. Something needs to be done... quick.

Someone needs to do SOMETHING!

As at this time right now the EURO is 1.2002 (1.1896 three hours ago), the Pound is 1.7223 (1.7091 three hours ago), the yen is flat. This is a WORRY!! All time lows in fact... it's becoming a norm.

Im terribly afraid that if the EURO gets to around a dollar and a quarter that OPEC could seriousely DROP the dollar, and completely switch to the EURO, if that happens we will end up like Argentina, the prices of goods will be three times what they are now and god knows what else could happen! And I have noticed that since this 1.3% 1 hour fall in the dollar has reversed Stockfutures from a 22 point gain to a 16 point loss. Just goes to show what the fall in the dollar will do to the stock market.

The EU may not mind seeing this happen, I have my suspcions as to why the ECB hasn't dropped short term interet rates. Despite NO growth and a rising Euro as well as low inflation... you would assume they could provide a quick by making say a half percentage cut? Maybe it's because they want to have their currency made the new standard.

Also, I'm very worried that when the $hit hits the fan, people may not blame his adminstration, it's his fault! Look at "reflation" and the fed printing money like its going out of fashion. Not to mention the budget deficit, I don't blame foreign investors for going sour on us. It's all very scary.

Who knows when it could happen, it might be tomorrow? Or maybe the dollar will rebound to 1.17 and the crash will happen a couple weeks later, maybe it will be another three months but things are looking fishy.

[Commie Pinko Dirtbag]

26. Where can I look at the rates in real time? Thanks in advance. (nt)

[Capt_Nemo]

21. IIRC the Euro started near $1.10 went up to $1.16 and

then declined to $0.89
this took several months. As for central banks propping up the Euro
you're looking at the wrong direction. You should be looking at
countries outside Europe that are changing their foreign exchange
reserves for reasons linked to geopolitics...

The problem with US economy is that the country is indebted up to
its neck and its industrial base is declining. It's an economy
living at the mercy of its creditors and foreign investors.

[virtualobserver]

25. Are you really saying that irresponsible policies driven by the white hous

do not negatively affect the economy.

Does any "sane economist" believe that there is an infinite demand for U.S treasuries at low interest rates as we create this enormous deficit?

[sendero]

30. If was interested...

... until you said >>> Their 3rd quarter growth was 2.5%; ours was 8.2%. The continent only grew about 1.5%. Why on earth would we copy that?


If you don't understand why that is a meaningless metric, why are you posting about economics at all?

[Art_from_Ark]

31. Exchange rates and competitiveness

Do you remember when the Japanese yen was being artificially manipulated to make American products "competitive" in Japan? The first time was 1971, when Nixon had the yen float. It very quickly went from a peg of 360 yen per dollar to about 260/dollar. I don't know how effective it was in getting Japanese to buy more American products, but it was probably very minimal, considering the strong Japanese desire to "buy domestic" at the time, and the fact that they still didn't have a lot of disposable income then.

But a lot changed from then until the Reagan era. The oil crises provided an excellent opening for the Japanese to sell their fuel-efficient cars in the American market at much lower prices than American makers (who really weren't interested in fuel efficiency anyway). At around the same time, the Japanese electronics industry was really starting to take off, and soon the US was amassing a huge trade deficit vis-a-vis Japan. Enter Ronald Reagan and his desire to "make American products competitive in Japan, and Japanese products less competitive in the US". In 1985, Reagan pressured the currency markets and the Japanese government to "re-value" the yen, causing its value to rise from about 200/dollar to about 160/dollar in a very short time. However, this only exacerbated the trade deficit, as it made desirable Japanese products more expensive in dollar terms, but provided little incentive for Japanese consumers to "buy American", because 1) there were few American goods on the Japanese shelves anyway, and 2) middlemen took larger profits, rather than passing the savings on to the consumer.

Enter George Bu$h Sr. and his efforts to "open" Japanese markets. Bu$h came to Japan with auto company executives in tow to try to force Japan to import more American cars. Talk about bringing coals to Newcastle! American car makers were trying to compete with 11-- count 'em, 11-- domestic Japanese makers! If that wasn't bad enough, the American car companies had little in the way of after-service systems, the steering wheels were on the wrong side, the manuals were in English, and the cars were just too damn big for the Japanese road. Efforts to "open" other Japanese markets met with similar "success". The problem was, there wasn't a whole lot of American stuff that the average Japanese consumer felt they absolutely needed.

Then in 1994, something strange was happening to the yen-- it began rising at an accelerated pace against th edollar, at one time reaching the lofty height of 78/dollar. What a fantastic opportunity to sell American products in Japan, eh? And Americans did make some inroads, but they were wiped out, and then some, by the higher prices of high-quality Japanese products that Americans desired, and, in many cases, had no direct American competition.

[Spazito]

27. Here is another worrisome article....

It is entitled: Soros 'speculating against dollar'
Pound surges to five-year high against US currency. Buffett also said to be betting against greenback

<snip>

One hedge fund manager, who asked not to be named, said: "I have heard that both Soros and Buffett are shorting the dollar. There's a growing belief on Wall Street that the dollar is looking like a one-way bet downwards."

A spokesman for Mr Soros, who famously "broke" the Bank of England when the pound crashed out of the exchange rate mechanism a decade ago, said he never commented on speculation. Mr Buffett was unavailable for comment.

The surge in the pound to $1.7155, its strongest level since October 1998, was boosted after Merrill Lynch forecast the dollar would plunge a further 8 per cent by the end of next year.

more

http://news.independent.co.uk/business/news/story.jsp?story=467972

[kodi]

28. this sux, i import from europe and cant compete at that exchange rate

the rate in may-june was almost as bad, with the euro hovering around $1.18.

the US is moving rapidly towards a third world economic status vis-a-vis its currency.

[IndependentThinking]

29. Give it a break...

The Euro would have went up no matter who the Pres is or was. Doesn't matter. The Euro is the best thing that has happened to Europe in decades. Socialized currency at its best.

[AP]

32. Currency isn't a philosophy. It's a number. It's a value.

Which is why it's crazy that some countries would chose a less efficient and rational economy, because they feel nostalgia for the pictures on and the name of money.

I would call the dollar "fuckers" or "genital warts" if calling it that meant that I'd be able to have more of it.

[Art_from_Ark]

33. Yes and no

Certainly the euro would have fluctuated no matter who was president. However, speaking as one who is seeing this from a foreign country, the irresponsible fiscal and other policies of the current administration have exacerbated the situation.

[Kellanved]

34. 1.20$ now

:wtf: indeed.