Keep shorting... I wouldn't be surprised to see the euro cost $2.50 in a few years. And that's good for us, and really bad for European Nazis.
Gold is up.
Morning quote was $452.00 yesterday.
Times Online
2November 26, 2004
Q&A: The falling dollar
Why is the exchange rate of the dollar so important?Unless you have a pre-Christmas shopping trip to New York planned, you might think that how many dollars you can get for your pound or euro is insignificant to you personally. But in today's global village, where businesses in Britain, Germany, America and the Far East are often inter-related, the currency policy of the world's biggest economy is hugely influential.If a British business wants to sell its goods to the United States, while its costs are often in pounds or euros, its sale price will be in dollars, and therefore its prices now are going to be 30 per cent more expensive than they were three or four years ago, when the euro was at dollar parity - making them very uncompetitive. Probably the most notable example of how this might affect a business is Jaguar, which has closed down its historic factory in Coventry simply because demand for its luxury cars in the United States has evaporated.The US accounts for 43 per cent of all overseas direct investment by British companies, more than the entire EU, which accounts for 35 per cent.
The industrial group Tomkins this week blamed the weaker dollar for wiping £220 million from its reported sales and £22.8 million from its pre-exceptional operating profits in the first nine months of the year.The drugs sector is especially vulnerable to a falling dollar. Robin Gilbert, of Numis Securities, said: "Short term, the weaker dollar is a drain on the pharmaceutical sector. The US is responsible for more than 50 per cent of drug company profits." Also key in the most recent run on the dollar has been the growth as an industrial power of China, with its growing demand for raw materials (whose prices are often set in dollars) and increasing industrial output for export, helped by very low labour costs.By keeping the dollar low, American exports have had a better chance of being competitive against cheaper Chinese goods on the international market.What is the Washington Government's position in this?A week ago, US Treasury Secretary John Snow was in Europe, visitng finance ministers and reinforcing the message that Washington's policy was not to intervene in the currency markets. "It's our policy because it's our policy," he said.In the past four years, under President George W Bush, the American Government has built up massive trade and borrowing deficits. To trade its way out of the former, the American Government is trying to help US exporters by keeping the dollar articificially low, thus making their goods less expensive, relative to European rivals, in China and other expanding markets. So the Americans sell more goods and create more jobs, and as they tend to import less of the pricy European goods (as a result of the dollar policy), their trade deficit is reduced, but at the expense mainly of European businesses and jobs. Germany has been particularly hard hit.
There is then the economic arguments over currency intervention - and the President is surrounded by hawkish non-interventionists.
Are there other influences?
Yes, oil. Many analysts believe that it was the lack of refinery capacity in the United States, rather than the lack of crude supplies, that caused oil prices to rocket spectacularly this year.
But with the dollar's buying power diminishing at the same time, oil exporters have also been forced to demand more dollars for their products.
This increased cost in something so fundamental to so many European manufacturing businesses, who are seeing their costs rise just as their export sales are hit, is putting European traders under pressure. This was the worrying thrust of the CBI's monthly industrial report published yesterday.
How high can the pound go?
Most currency forecasters agree that the pound was set to go higher against the dollar after breaking through a series of key resistance levels, perhaps rising to $2, maybe before the end of the year.
Could this be Soros' "nuclear option?"
Ain't nobody gonna benefit from this worldwide
Dollar goes down and price of Chinese goods etc go up who they hell will have the $$$$ to buy them
Can you say Chinese Depression
The weak dollar is not a good thing if you are debtor nation either. They boys and girls in Congress are running up massive debt keeping up the status quo of 95% incumbency. Well over a third of the debt is being financed by foreigners. The money they make on their investments is in dollars, if the dollars they make represents less value to them then in order to finance the debt that Americans are unwillingly to finance, interest rates will have to rise. Rising interest rates for our public debt will have a chilling effect. Rising interest rates will also have a stifling effect on the housing market which has been the brightest part of our economy the last few years.
The records lows in the dollar do not necessarily have an immeditate effect. And obviously unforseen world events could cause currencies to do a variety of things. But if the dollar keeping trending the way it has, every American will feel its effect in some way.
Reuters anti American rant.
A super strong Euro is great for America.
Don't worry, the trade deficit and the national debt are good for the economy, just like outsourcing and illegal immigration, just like no borders and free trade just like the WTO Bi%ch slapping US with fines. Don't worry.
Tell the Iraqis they have got to defend their country because we are not going to do it AND they need to start paying for our troops to be there.
Get the trade back into balance and get out of the WTO.
Stop Illegal Millions from invading US by controling the borders FIRST.
TELL THE IRANIANS IF THEY WANT NUKES
WE WILL GLADLY GIVE THEM SOME RIGHT ON TARGET.