1 posted on
12/17/2003 2:12:51 AM PST by
SUSSA
To: SUSSA
Can't figure out why everybody acts like the dollar is
so incredibly weak against the Euro. The Euro was launched at around 1.18. It's at 1.23 now. Jeez, it dipped down below one dollar a while back and it was no big deal supposedly. It's five cents more than its launch and the sky is falling? Hmmmm....
Chart below shows the Euro's history over the long term. You can see it was basically at the same level it is now when it was launched in the late 1990s. Then look at that dip. The Euro hasn't been surging so much as it has been getting back to where it started when it was officially launched.
Certainly no cause for alarm or it should've been very alarming when at the Euro's official launch that the dollar was so weak against it. I don't recall hearing too much about uproar about it back then...
To: SUSSA
They attribute the weak dollar/strong euro to "persisting worries about the health of the US economy." However, any first year economics student will tell you that the reason the dollar goes down vis a vis the euro is that the US is running a trade deficit, and the reason the US is running a trade deficit is that the US economy is strong relative to the European economy--not weak. When the US economy is strong, consumers spend more money and buy more imported goods, while the weaker European economy does not enable European consumers to reciprocate.
To: SUSSA
Euros will cheer this as good news, when it's anything but. The wealthy will get to take cheaper vacations while the overvalued currency chokes exports to death.
14 posted on
12/17/2003 5:21:30 AM PST by
thoughtomator
(The Federal judiciary is a terrorist organization)
To: SUSSA
If you add the federal budget deficit and the balance of trade deficit, you come up with a total annual deficit of a trillion dollars a year. Combine that with the United States in process of moving all of its high tech and manufactuing capabilities to asia, and you end up with a country which produces nothing and is spending like a drunken sailor.
The dollar will continue to fall until we get a balance of trade surplus, until we get a federal budget surplus, and until all the jobs and factories come back from asia.
Until then, until that happens, buy gold.
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