Posted on 07/10/2007 1:53:36 PM PDT by WesternCulture
Dollar falls to record euro low
The euro has benefited from higher interest rates The dollar has fallen to a record low against the euro and yet another 26-year slump against the pound. With investors fearful that the ongoing downturn in the US housing market will start to slow the economy, the euro rose as high as $1.3741 on Tuesday.
The pound touched as high as $2.0274, as it continued its recent gains.
The dollar's latest fall came after the key Standard & Poor's credit rating agency said it may downgrade $12.1bn (£6bn) in sub prime mortgage debt.
Interest rate boosts
Sub prime mortgages are increased-risk loans given to borrowers with a poor credit rating or those on low incomes.
It is evident the [US] market remains concerned about the sub-prime mortgage fallout on the financial sector
Economist Melinda Smith
Q&A: Strong pound
House repossessions in the sector have reached record highs this year.
Both the euro and the sterling have also benefited from recent interest rates rises by the European Central Bank (ECB) and the Bank of England.
While the ECB has kept eurozone rates on hold at 4% this month, they have doubled in 18 months, and more rises are expected by the end of the year.
The Bank of England last week increased rates to 5.75%, and most analysts expect a further rise before the end of the year, as both it and the ECB move to slow inflation.
US interest rates were kept on hold at 5.25% following the Federal Reserve's most recent rate-setting meeting last month.
It was the eighth time in succession that the Fed had left rates unchanged.
"It is evident the [US] market remains concerned about the sub-prime mortgage fallout on the financial sector and the housing market," said ABN Amro economist Melinda Smith.
LOL.... OK let them count on the EU to lead the world economy (extreme sarcasm).
My personal conclusion is this:
Europe is a continent that, in terms of economical capacity, is powerful beyond belief.
However, we Europeans don’t make proper use of our might.
It’s a downright shame that large European countries like Germany and France have fallen prey to the shameful 6 hour work day fantasy while nations like the US, The Scandinavian countries and the Asians work 10-12 hours a day and feel proud of doing so like the true patriots that we are.
I know what I’m talking about, I’ve worked for Volvo here in Gothenburg, Sweden.
I believe in my country and I believe in Capitalism.
That plus we have faced an ENORMOUS amount of counterfeit money coming to our shores since the 1980’s.
Though it also has around 200 million more people....
Also, a cheap dollar helps exports, and the United States is still the largest exporting nation (though its economy is more reliant on domestic trade).
Today, many European companies that traditionally have been dependent on the US market are beginning to loose patience.
There seems to be more money in selling BMW’s to Russia so to say.
Even though economic growth has been weak in many European countries during the last 15 years, it doesn’t mean Europe is not the largest economy on earth.
This is why Airbus, the European employment program, wants to open a plant in the US!
If considered a single economy, the EU is the largest, beating the United States--by around 200 billion American dollars--only a little considering their economies are around 13 trillion dollars.
If NAFTA is considered a single economy (it isn't; it isn't even all that close to the EU in being a single economy. But the EU isn't fully a single economy yet--in the areas of services, for one) then NAFTA is a larger economy than the EU by about 1.5 trillion dollars.
It isn't bad for you to have a little Euro-pride though, as you are a European. Just be aware that Americans are bound to have a bit of American-pride, too.
“The EU has a larger GDP (exchange rate, not PPP) than the United States.
Though it also has around 200 million more people....”
- We’re also beginning to produce decent GDP growth figures. The underlying cause to this is that the dismantling of Socialism has begun in Europe.
Sarkozy (new President of France) and Merkel (new Chancellor of Germany) are bringing about great changes in these large European countries.
Let’s repair Western Civilization.
A new renaissance!
Greetings from Europe to the United States of America, our foremost allies!
NYC hotels have continued to raise their rates this year as more and more europeans, especially British, have been coming here for major shopping sprees in Manhattan and hotels like the Waldorf-Astoria are booked solid week after week. The exchange rate is unbelievable for them right now.
They can come here and basically get the same luxury goods for 1/3 to 1/2 the price of what they pay in London stores.
The Brits love florida beaches as well too. Miami is loaded with european shoppers and beach goers.
At least as of the end of 2006, Germany was the world's leading exporter, followed by the U.S. (and then Red China):
Germany once again the world's leading exporter
Thu, 08.02.2007
German exports reached a record level in 2006, the fourth year in a row this has happened, showing an increase of 13.7 percent over 2005.
The Federal Office of Statistics reported on February 7 that German exports were worth a record 893.6 billion euros in 2006, 13.7 percent more than in 2005. This put Germany in the lead among the world's exporting nations, followed by the United States and China in second and third places.
The export sector is a major driving force for growth. The German economy expanded by 2.5 percent in 2006, the strongest increase registered since 2000, with exports accounting for 0.7 percent of the overall growth figure.
Export growth continued to be strong right up to the end of 2006, showing 10.3 percent for the month of December.
The trade balance in 2006 showed a surplus of 161.9 billion euros, as opposed to 158.2 billion euros in 2005.
Imports in 2006 rose even more strongly than exports, i.e. by 16.5 percent, to a volume of 731.7 billion euros.
Three-quarters to EU countries
The largest share of exported goods, valued at 556.1 billion euros, went to other EU countries. That was 11.5 percent more than in the previous year. The growth in exports to non-EU countries was particularly strong, 17.3 percent, taking that total to 337.6 billion euros.
Economists are expecting to see further growth in the export sector in 2007, but not as strong, somewhere around 7 percent.
Europe/The EU is a very advanced economy, but in some areas it’s lagging behind the US. Especially in the case of distribution efficiency and scale economy.
In a rich European country like Denmark, wages are considerably higher than in the US, but simultaneously, daily expenses are on a completely different level.
Many of us would be thrilled to have Europe be Europe rather than Europe Lite. And we very much hope that the dismantling of socialism has begun in earnest. I believe that it is too early to tell in the case of Sarkozy. One cannot go only by what he says. However, in the case of Merket, you are flat out wrong.
Please provide the data back-up to the US printing money. If so, why haven't we seen large core inflation?
The US’s GDP is considerably higher than any european country’s.
Also, written into the US Constitution, the commerce clause protects the free flow of all trade/goods/services between the states. Europe still, after 50 years of trying, cannot seem to manage this. Until it can accomplish this, it is hard to think of Europe as a single economic entity.
No kidding! A friend of mine is a flight attendant who got a $55 round-trip ticket from Newark/Copenhagen/Newark one time. She was so traumatized by the price of breakfast the first morning, she was disinclined to leave her hotel room. She told me the price of a tea and some baked good. It was absurd. In her words, breakfast was more than 2/3rd the price of her plane ticket.
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