Posted on 12/26/2004 5:13:15 AM PST by demlosers
BERLIN, Dec 25 (Reuters) - German Finance Minister Hans Eichel was quoted on Saturday saying the U.S. government would one day realise that the rapid rise of the euro is also endangering the U.S. economy -- and then be ready to act.
In an interview with Hessicher Rundfunk radio, Eichel said "and then America will also be ready to take actions" once the U.S. government realises the euro's appreciation is hurting their own economy as well as others.
Eichel added in the interview to be broadcast later on Saturday that he expects the U.S. government to take energetic steps against its high budget deficits that are a main cause of the euro's rise against the dollar.
Government leaders in Germany and throughout the euro zone have complained the dollar's weakness against the euro threatens to slow growth in the 12-nation region where recovery is already losing steam.
The dollar has fallen more than 10 percent versus the euro in recent months with markets convinced its slide is an inevitable result of record U.S. budget and trade deficits, and that the U.S. government and exporters are not unhappy about it.
U.S. officials have shown no appetite for central bank intervention that some Europeans have called for to halt the euro's rise.
Title "dlr" = Dollar
Duh LoL!
Well, i am frequently at odds with our beloved
Finanzminister Hans Eichel, but this time ...
Q:People who cannot travel because their currency doesnt
buy anything outside their own country?
A:Citizens of the United States of America, who would have guessed.
I am confident that said citizens wont let that happen
in the long run.
Why would an American want to travel to Europe? Any reasonably sized amusement park can give you a taste of Europe without the danger or insults.
I would suggest that Herr Eichel could make better use of his time by complaining to China that the price of the Yen does not reflect reality and must be allowed to float on its own.
It might be better to complain to the Japanese rather than the Chinese. Japan has the Yen, the Chinese have the Yuan. The US has the distinction of being a so-called capitalist nation with no capital. Floating the Chinese Yuan would be the worst possible solution as the dollar would go into free fall against the Yuan or Yen. With the billions of reserve dollars both countries hold in US dollars, there would be an instant collapse to our currency.
Q: What is worse than having people who cannot afford prices in a foreign country?
A: Having people who cannot afford prices in their own countries.
I don't know it is in Germany but I have heard it directly from a Spaniard and a Dutch that the over-valued European markets have not only made Europe too expensive for Americans and the rest of the World, it has also made Europe too expensive for the Europeans themselves.
We went to Spain last summer and a Spanish friend was telling me that prices in Spain sky-rocketed when the Euro replaced the Peseta. She called the Euro an "engaño".......a hoodwinking.........perpetrated upon Spain by European Union politicians.
The high cost of living in Spain since the Euro replaced the Peseta is also affecting the number of children that young Spanish married couples believe they can afford.
Last week, I met a visiting woman from the Netherlands. I asked her opinion about the Euro, told her about my conversation with the Spaniard and asked what the effect of the Euro was in the Netherlands.
She replied that it had the same effect that I had described for Spain. She said that, before the Euro, the dollar was worth about 2 Dutch Guilders. However, once the Euro took over, everything that was previously priced at 1 Guilder in the Netherlands was then priced at 1 Euro. As a result, the cost of living in the Netherlands doubled.
She said it is now so bad that the Dutch tend to stay home rather than even go a restaurant or to a pub as they are now so expensive.
Oil prices are still pegged to the dollar. The prices of goods outside of Europe are still priced in relation to the U.S. market.
The European over-valuation of their currency and their economy is a European economic bubble that is seriously impactting European society but has very little effect on us.
Next summer, we will still travel outside the U.S. We just won't be travelling to Europe.
Most of these sort of currency positions have nothing to do with long term developments - they are speculations based on rates and short to midterm shorts in currency policy.
It is an example, however, of how ignorant we have all become of basic economics - and how short our memories are.
This Eurocrat is worrying about Germany's economic woes, not the U.S..
Agree ebtireley, ecept, the low dollar may be around for another year. I do not believe that the decline of the dollar was at all unintentional. We have not propped it up like we used to.
It is also a payback to socialist "Old Europe" for being openly anti-american for quite some time and , by the way has nothing to do with Iraq.(Oh well, maybe a little)
Our Government is going to let the Europeans suffer through more Bankruptcies and hard times. Then the real payback begins. After losing some of the marketshare, we will again support the dollar , and that will hit them with unprecedented inflation and stagnation.
Concur. Europe wouldn't be to bad if it weren't so overrun with Europeans!
My German friends are saying the same thing......
I agree. I think America has many of the most beautiful scenery and exciting places to visit on earth.
Sedona Arizona, the Florida Keys, the Grand Canyon, Yosemite, Monument Valley, the California coastal highway, South Beach FL, Vegas, New York City...just to name a few.
I can never seem get enough of traveling America.
I do doubt, however, that they will go all the way back up to the 6.5 it was at under Clinton. The dollar was way overvalues under Clinton - it needed to come down a bit.
It would be extremely irresponsible walk rates up any faster, and to suggest it is and extremely dumb thing for this minister to even suggest. It shows one just how incompetent the current German government truly is.
The dollar will be fine. I expect that there will be a series of small Yaun "unpeggings' this year, not enough to really balance out world trade, but it will be some help. I suspect that a lot of the money that is going into the Euro is doing so because they do not know the timing of this un pegging: Will the Yen go first or will it be the Yuan? That sort of thing. The Euro is a good place to park money in the short term (another quarter.) I think that there was also some OPEC euro switch going on (and perhaps Russia too.) I also think that some people had some real weird positions on the dollar earlier this year and that is still affecting the dollar. When you hear this "twin deficits" crap out of the big players on Wall St. you know that they must have some sort of position in For-Ex trades that they are trying to shape in the market (and perhaps a dig by wall Street liberal at Bush, as well.) Otherwise, it would be a really stupid statement to make as we have had deficits for 30 some years.
There are only two way to deal with these deficits. On one hand, protectionis, and on the other hand tax, regulatory and entitlement reforms, along with some tough tactics on trade.
I agree though that it does put the EU in its place. Lots of people (including many on FR) run around thinking that the two economies are peers. They are not. The Euros just do not want to admit it. If Bush can actually push through his reforms (a big if, I grant you) then the EU will actually be in worst shape.
The fact of the matter is that we need to invest more and consume less, and the rest of the world needs to consume more and save less. Globalism will only work if all major economies have large internal markets and every one has access to each other markets.
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