so the dollar keeps falling

[wu_trax]

1.27 per euro today.
what will the consequences of this be?
i think if this goes on, especially at this speed, the result will be a total desaster for the world economy. a large part of the worldwide demand for goods will be gone sooner or later, because people in the us wont be able to effort all the goods they import right now. at the same time the supply of goods world wide will increase, because us-companies (or more likely chinese companies, because they fixed their exchange rates) are now able to produce goods at much lower prices.
so what we got is lots of supply and very little of demand. this means recession, doesnt it?

now the consequences for the us: obviously the falling dollar will cause inflation, and lots of it. the prices for all the imported goods and raw materials will rise (oil beeing the most important one). it also means the interest rates have to rise. who is willing to lend money to pay for bushs spending madness, if they get back less money and a low intrest rate?
and who should pay for the giant consumption of the private sector that also is paid by debt only? the people in the us wont be able to maintain their high standard of living, because they a) have run too deep into debt to get any more money and b) cant effort foreign goods any more.

so what we have is global recession for the rest of the world because of the lack of demand and a good competitive position for us-companies. unfortunatly these us-companies dont have a market to sell their goods to, because their domestic market is too deep into debt and the world market is in a global recession.

PS yes, im somewhat bored, but i hope it makes any sence.

[CrashTester]

It means I can now buy my Florida dream home for a lot less.

[Ragnarak]

It means i get less money from banner advertising revenue is what it means

Stupid dollar

[CrashTester]

I know what you mean dude, thats why I gave up on the interenet advertising thing and started an Al-Queda terror cell. I now get a regular income from wealthy arabs that are a 1000 times more than what I used to get. Sweet!!

[Evergreen]

They'll do what they did to save the stupid Euro all them years back.

the G14 nations will artifically boost the dollar by buying lots of it. (Yes people the Euro only survived this long and is in this position thanks to it).

This yoyo system will go on for quite a while until we realise that we can't support two currencies of this size in a globalized market and the Euro get's decommisioned.

[wu_trax]

Originally Posted by Evergreen

They'll do what they did to save the stupid Euro all them years back.

the G14 nations will artifically boost the dollar by buying lots of it. (Yes people the Euro only survived this long and is in this position thanks to it).

This yoyo system will go on for quite a while until we realise that we can't support two currencies of this size in a globalized market and the Euro get's decommisioned.

please what? that doesnt make any sence whatsoever. why should we abolish the euro? it more looks like the euro is going to replace the dollar as both, the major trading currency and the most important reserve currency.

[Dante Hicks]

Originally Posted by Evergreen

the G14 nations will artifically boost the dollar by buying lots of it.

Do you mean G14, the Leading European Football clubs?

[wu_trax]

Originally Posted by Dante Hicks

Do you mean G14, the Leading European Football clubs?

damn, i have been trolled .
but with all these groups and organizations, who can know them all?

[MrL_JaKiri]

He may not have been trolling; he may have meant G8.

[wu_trax]

Originally Posted by MrL_JaKiri

He may not have been trolling; he may have meant G8.

but the g8 isnt doing a shit. the BoJ supports the dollar, but thats about it.

[Weeks]

Core, we haven't had a wu_trax thread for a while

At the moment it's great for UK business though.

We can buy US crap el-cheapo (we don't export that much compared to mainland europe),
And get an increase in exports to the rest of the EU as the Pound is weak compared to the Euro.
Crap when i goto France and convert to euros though :\

[Evergreen]

I did mean the G8.

Anyway I'm not concerned about a currency that had to be saved for it's first two years of exsistence.

I know it's destined to fail and I'm pretty sure Germany and France are doing their best to cover up lots of shit that would weaken the euro atm.

The only reason the dollar is this week is cause they finally dropped their dirty laundry in front of the economic world. I'll just wait till the same happens to germany and france and given the poor track record the euro has already had until recently I'm sure it will fail (Like it was about to recently until it got saved because no-one wanted to see the whole of western europe mainland go into a depression that would of made the 1930's depression in america seem joyful)

[wu_trax]

Originally Posted by Weeks

Core, we haven't had a wu_trax thread for a while

At the moment it's great for UK business though.

We can buy US crap el-cheapo (we don't export that much compared to mainland europe),
And get an increase in exports to the rest of the EU as the Pound is weak compared to the Euro.
Crap when i goto France and convert to euros though :\

the pound also gained against the dollar though. (new 11-year-high today)
its not so much a euro-strength, but a dollar-weakness.
oh, and you do a lot buiness with the us. in fact you trade more with the usa than with us (thats germany, the eu alltogether is obviously more important than the usa)
so, your economy will be just as ****ed as rest of the world .

[ChubbyChecker]

Originally Posted by wu_trax

at the same time the supply of goods world wide will increase, because us-companies (or more likely chinese companies, because they fixed their exchange rates) are now able to produce goods at much lower prices.
so what we got is lots of supply and very little of demand. this means recession, doesnt it?

I hadn't thought of it in that exact way but yeah, makes sense.
Goes to show why the Asian countries having their currencies pegged on the dollar and refusing to appreciate is a bad thing.

[Weeks]

Neer we export more to the EU than US.

(thats germany, the eu alltogether is obviously more important than the usa)
more important? do you mean we export more shit to the whole EU than we do to USA?We trade alot, but it's more take than give.

[Evergreen]

I think it's just blind bragging with no comprehension to the laws of economics, export and importing.

He seems to forget the dollar is trading week under a year of massive dirty laundry getting ruffled over there, BSE, Enron, Halliburton and more...

Just wait until the real money makers in the world are fed up dredging through america to make money and turn onto an over confident France and Germany (Parmalat is just the tip of the iceberg in the EU imo).

[wu_trax]

Originally Posted by Evergreen

I did mean the G8.

Anyway I'm not concerned about a currency that had to be saved for it's first two years of exsistence.

I know it's destined to fail and I'm pretty sure Germany and France are doing their best to cover up lots of shit that would weaken the euro atm.

it doesnt look like the euro has any problems right now. in fact the euro-zone has a trade-surplus with the rest of the world so that there is no reason for the euro to drop as fast as the dollar does right now.
sure, the budget-deficits could become a problem, but right now there is capital floating into the eurozone, and that capital needs to be invested somewhere. no problem there either.

The only reason the dollar is this week is cause they finally dropped their dirty laundry in front of the economic world. I'll just wait till the same happens to germany and france and given the poor track record the euro has already had until recently I'm sure it will fail (Like it was about to recently until it got saved because no-one wanted to see the whole of western europe mainland go into a depression that would of made the 1930's depression in america seem joyful)

what are you talking about?

[wu_trax]

Originally Posted by Weeks

Neer we export more to the EU than US.

(thats germany, the eu alltogether is obviously more important than the usa)
more important? do you mean we export more shit to the whole EU than we do to USA?We trade alot, but it's more take than give.

i dont understand. yes, you do trade more with the eu than with the us and yes, you do import more than you export (but thats only a small gap, compared to the us)

[Evergreen]

That you have a short term memory and can't remember the early start to the Euro currency and how badly it struggled and how frequently countries like the UK and the USA had to buy surplus amounts of the Euro Currency to strengthen it.

It's nice to see that a kind deed goes a long way when it comes to the opinions of those we've helped.

Secondly I do think that Parmalat is the tip of the iceberg in the EU.

[wu_trax]

Originally Posted by Evergreen

I think it's just blind bragging with no comprehension to the laws of economics, export and importing.

He seems to forget the dollar is trading week under a year of massive dirty laundry getting ruffled over there, BSE, Enron, Halliburton and more...

Just wait until the real money makers in the world are fed up dredging through america to make money and turn onto an over confident France and Germany (Parmalat is just the tip of the iceberg in the EU imo).

the dollar's problem are the twin-deficits (budget and trade), not so much the stock market or the creative book keeping.
(and no, i dont think anyone will find anything like enron in germany or france)

[wu_trax]

Originally Posted by Evergreen

That you have a short term memory and can't remember the early start to the Euro currency and how badly it struggled and how frequently countries like the UK and the USA had to buy surplus amounts of the Euro Currency to strengthen it.

It's nice to see that a kind deed goes a long way when it comes to the opinions of those we've helped.

Secondly I do think that Parmalat is the tip of the iceberg in the EU.

that happened because the us sucked up capital from around the world (stock bouble etc.) it was a more of a dollar-strength than a euro-weakness.
the us needs to attract foreign capital, 1 billion every day, just to keep the exchange rates stable. the euro-zone doesnt need that.

[Evergreen]

Originally Posted by wu_trax

(and no, i dont think anyone will find anything like enron in germany or france)

Watch this space.

When the money makers stop shitting on the USA (could be a few months as the USA was well ripe).

I'll be saying "I told you so."

Especially when the other countries in the EU start getting peeved at the way France and Germany are 'using' them with regards to following laws.

[Evergreen]

Originally Posted by Toccata & Fugue

Agreed, but its not even really much of a problem for the dollar, if it falls in value imports will go up and balance the trade deficit.

The budget deficit is completely their own fault though and will probably mean inflation if it is to be sorted out, typical Republicans always promising fiscal austerity whilst plunging the nation into debt.

Which is what should be being discussed.

Not some petty bragging thread about the euro being strong against it.

Next time Wu-trax don't make a thread so biased or let Toccata & Fugue actually make it.

[JammyJim]

i hope it keeps falling tbh.

means i can buy more stuff when i fly over in the summer

(!!)

[wu_trax]

Originally Posted by Toccata & Fugue

Agreed, but its not even really much of a problem for the dollar, if it falls in value imports will go up and balance the trade deficit.

in theory, yes. but practically? no, the trade deficit of the us is structual.
in 1993 the dollar did cost 1.33 DM (thats about 1.44$ per euro). that didnt change anything about the trade deficit. you cant produce everything on your own from one day to the other. in the meantime there will be inflation.
(and i already did mention china. if the dollar drops the new jobs will be created in china, not the us. china will export more goods, not the us.)

The budget deficit is completely their own fault though and will probably mean inflation if it is to be sorted out, typical Republicans always promising fiscal austerity whilst plunging the nation into debt.

well, there was hardly anything else bush could have done. the private sector is already deep into debt in the us and somewhere the money for economical growth had to come from.

[Dead_Meat]

The fact that it's weak is great, as it means the £'s I'm transferring over ot buy stuff liek cars etc here are worth an enormous amount, and if all goes well, by the time we move back, the rate will have fallen and we'll be quids in all round.

Hurrah !

[pablissimo]

DM for Chancellor.

[evil one]

Soon I will own the US and make everybody worship me :gollum:.

[JonnyBGood]

Christ but economics really is utterly boring.




PS wu has become more nationalist than the psycho americans :(

[Evergreen]

Jonny's rite you know.

[midge5]

Originally Posted by JonnyBGood

Christ but economics really is utterly boring.

A few months ago I would have disagreed, after starting uni though, my microeconomics lecturer is killing me. God he is the most boring teacher ever. I have ended up ignoring him and just reading some book through the class. He also seems to overcomplicate everything from how I remember doing it at A level heh :/

[lokken]

Originally Posted by Evergreen

Just wait until the real money makers in the world are fed up dredging through america to make money and turn onto an over confident France and Germany (Parmalat is just the tip of the iceberg in the EU imo).

Happy to confirm that the European economy is more cartelised than most duder.

[pablissimo]

I keep wanting to call you 'Midge Ure' and since there's apparently no law against it I'm going to subsequently do just that.

And I liked economics at school, I just hate it now because I'd run out of things to hate after Bob Monkhouse died.

[JonnyBGood]

Originally Posted by midge5

A few months ago I would have disagreed, after starting uni though, my microeconomics lecturer is killing me. God he is the most boring teacher ever. I have ended up ignoring him and just reading some book through the class. He also seems to overcomplicate everything from how I remember doing it at A level heh :/

I speak from experience as well. My economics lectures are coming close to supplanting sociology as things that cause my brain to leak out my ears.

[wu_trax]

Originally Posted by Toccata & Fugue

1. Structural trade deficit doesn't even mean anything, that's just a phrase the Government uses to excuse itself. The trade deficit was very predictable and could have have been sorted out. Clearly the Euro is different from the DM by a long way and the global situation was a lot different in 1993. As for China you may be right but there are many good and services produced by America which aren't produced by china.

the DM in 1993 was just one example. the dollar has constantly lost value ever since the gold standard was given up. (only with a peak during the late 90s).
as for china: like what? lets say an us-company realizes that it could now make lots of money by competing with a european company. it now has the options to either produce in the us (with us wages) or produce in china (with relativly lower wages, compared to the us) and without any exchange-rate risks, since the chinese currency is fixed to the dollar. pretty easy choice, isnt it?

2. Economic growth should not be the only objective of an econonomy especially in the wake of an idiotically high boom, Bush had plenty of options available.

with the lots of jobs lost during his term bush had no other choice but to do something to increase the economical growth, if he ever wants to have a chance to get reelected. there is no other way for him, he can only run deeper and deeper into debt and hope for a strong economical recovery.

[pablissimo]

He was never going to be able to promote stable and sustainable economic growth, and I don't think 'Well, I tried folks' will go down with the electorate any better than a recession would.

[wu_trax]

Originally Posted by Toccata & Fugue

That's a it misleading since the dollar was the standard after the Bretton Woods up until Nixon.

yes, but it lost value ever since. thats some kind of trend, isnt it?

As for China, they aren't really known for their vast store of IP or financial services, neither is it a high holiday destination. There are many important areas where China can't really compete.

yes, but they are catching up on these sectors aswell. im talking about manufacturing jobs anyway. thats were the trade gap comes from and i dont see a way for the us to close that gap on the short term, no matter what happens to the exchange rates.

As for Bush I think its clear that the tax cut had nothing to do with jobs. Besides in busines terminology jobs is just newspeak for profits.

but his deficit spending has. its not all gone for iraq and fighting evil.

[wu_trax]

Originally Posted by JonnyBGood

PS wu has become more nationalist than the psycho americans

yes, maybe i have
sorry, ill change that.

[wu_trax]

we were talking about the trade deficit, werent we?
so if the us wants to balance its trade deficit they have to either export more or import less. less imports would mean a lower standard of living. these goods have to come from somewhere.
the obvoius choice would be to try to export more. now thats difficult because every good that could be produced in the us could be produced for 10%(or whatever, just a random figure) of its costs in china. because of that companies will rather try to produce their goods in china than in the us. this means the us cant increase its exports.
that was my point (i think, im not quite sure anymore what im talking about). ofc an already developed economy like the us cant keep expanding at the same spped as that of a developing country like china.

[Evergreen]

Or in the case of the steel tarriff's they'll produce in canada.... and import the steel already manufactured into components that don't fall under the steel tarriff's.

Another great idea from G.W.Bush.

[wu_trax]

Originally Posted by Evergreen

Or in the case of the steel tarriff's they'll produce in canada.... and import the steel already manufactured into components that don't fall under the steel tarriff's.

Another great idea from G.W.Bush.

yes, that was somewhat stupid. bush risked 10,000s of jobs in steel-processing companies to safe a few 1000 jobs in steel production.

[Evergreen]

Originally Posted by wu_trax

yes, that was somewhat stupid. bush risked 10,000s of jobs in steel-processing companies to safe a few 1000 jobs in steel production.

To be honest seeing as he's intrested in employing people who will conduct draft interviews I do think he is perhaps trying to preserve parts of industries that he'll need to sustain a war effort should he commit anymore unilateral actions.

Personally he does seem rather obsessed with making america self sufficient on a working war engine scale.

[wu_trax]

Originally Posted by Toccata & Fugue

In terms of the trade deficit the US can compete easily with China on its own products. It doesn't need to compete for the European or Asian market, it just needs to get its own people to stop buying so much from abroad. Clearly it can't bat China for prices but if China satyas pegged it will suffer economically worse than the US, meanwhile imports will become more and more expensive so peoepl will buy American, you should be aware of this.

well, no, it can't. thats the problem. the trade deficit is still increasing while china has a surplus.
if the people in the us suddenly buy amaerican only the standard of living will drop (these products are either not as good as those made elsewhere or they are more expensive. if this would not be true they would already buy those american goods)
and why would china suffer? they have nothing to gain and everything to lose if they now let their currency float freely.

[wu_trax]

Originally Posted by Evergreen

To be honest seeing as he's intrested in employing people who will conduct draft interviews I do think he is perhaps trying to preserve parts of industries that he'll need to sustain a war effort should he commit anymore unilateral actions.

Personally he does seem rather obsessed with making america self sufficient on a working war engine scale.

i dont think so. i think this was mostly about getting some more votes in the next elections.
their weapons industry is already pretty much self sufficient. after all, there is no bigger market for weapons than the us-market.

[Evergreen]

You need steel, amongst other items to continue the production of arms and vessel's for war.

You suddenly find your industry dependent on imported steel and then while it may be good economically it leaves you prone should you take unilateral action that finds you embargoed from trading with those nations you have become to depend on.

Hence while I've been erringly worried about the EU subsidies taking away some of the independance that some nations like the UK possess agriculturally it does lean itself towards greater passiveness and that actions contrary to it suggests that one is warmongering.

[wu_trax]

Originally Posted by Toccata & Fugue

The Chinese surplus is not directly linked to the US deficit AFAIK although clearly the US deficit has gone towards some Chinese products.

yes it is. most of it comes from the us. there is a small surplus with the eu, but given that the trade between the EU and china isnt that much (yet) its not that important. other asian countries like south korea or japan acutally export more goods to china than they import from it.

The standard of living is going to drop, accept it. If you buy stuff you can't afford, then you have to pay for it.

yes. seriously i forgot what i argue for or against here . the standard of living will drop in the us sooner or later. and that will cause global, economical chaos. (which i think was the point of this thread.)

China probably can't sustain as weak a currency as the US since although its exports will be high, it won't meet demand and domestic prices will rise.

up to now china needs the us-market , just like the us needs cheap chinese labor. where else should they sell their stuff? sure there is 1.2 billion chinese but most of them dont have much money so thats not such a good market. the demand for good in europe is pretty poor so no chance there either. other asian countries either build thingsw on their own or are too poor to buy the goods. there is no alternative to the us-market for them, at least not yet.

[Intrepid00]

What does it mean? It means the US dollar will maybe fall a little bit more or level out soon while we can export our goods cheaper to the stupid euros that think they are getting a bargin. When in fact we will be raising or GDP (Which is already rising thx to some part to the weaker dollar) and the dollar will go back up and then the Euro will drop. It will be endless cycle of ups and downs till the US gets bored and finally makes the UK a state and several other smaller Euro countries through mass invasion after France leads the defense.

[IncubusGod]

Is it just me or do alot of people,mainly the British and Americans,have some sort of loathing towards the Euro...

Its just a currency ffs. Not 'liking' it because it had to be bouyed up when it started,because its strong on the market...is just stupid. It's a functioning monetary unit that will not be abolished no matter what psuedo-economics you spout.
Deal with it.
Sort out your own economic problems instead of trying to point out/make up/insuate problems in other parts of the world economy,desperatly hoping that such actions might have a detremental effect on said economies and that the dollar will rise without you having to lift a fat cheese covered finger at home.

America is in the wrong hands. Deal with it.


(edited for spelling)

[MrL_JaKiri]

Originally Posted by IncubusGod

Is it just me or do alot of people,mainly the British and Americans,have some sort of loathing towards the Euro...

Its just a currency ffs. Not 'liking' it because it had to be bouyed up when it started,because its strong on the market...is just stupid. It's a functioning monetary unit that will not be abolished no matter what psuedo-economics you spout.
Deal with it.
Sort out your own economic problems instead of trying to point out/make up/insuate problems in other parts of the world economy,desperatly hoping that such actions might have a detremental effect on said economies and that the dollar will rise without you having to lift a fat cheese covered finger at home.

America is in the wrong hands. Deal with it.


(edited for spelling)

I'd remove the 'British' from the start of that tyrade, because the rest of it hardly applies.

[Bunga]

I think it fits the Brits quite well. You should sort out your economic problems (lo NHS), you do seem to hate the Euro, and you keep pointing the finger at France and Germany. Also, some of you have fat cheese covered fingers.