Posted on 11/17/2007 10:16:45 AM PST by shrinkermd
The euro's rise and dollar's slide are squeezing European exporters' profits or multiplying their losses, prompting layoffs and plant closings. Companies are not only curbing production of goods headed to U.S. buyers but also rethinking the way they do business.
The euro recently passed the record $1.47 mark, gaining 11.5% since the beginning of the year against the greenback. It closed Friday at $1.46; a dollar bought 0.68 euro.
Most emblematic of the problem has been the impact of the euro-dollar relationship on the aeronautics industry -- and particularly on France's Airbus, whose main rival is U.S.-based Boeing.
With a falling dollar making Boeing's products cheaper outside the U.S. and Airbus' more expensive, Louis Gallois, chief executive of Airbus' parent EADS, recently described the sinking U.S. currency as a "sword of Damocles" hanging over the company's future. He vowed to cut an additional 1 billion euros in operating costs by 2010 or 2011.
This would mean more layoffs at a company that is already purging 10,000 jobs, a decision made when one euro equaled $1.35.
Survival strategies
Less dramatic but no less crucial is the impact on other European companies that export sophisticated equipment, technology, cosmetics, cars and luxury goods. For firms that make a large portion of their sales in the United States or compete with firms that deal in dollars, survival depends on raising prices, cutting costs or hedging currencies.
The strong British pound, moribund Japanese yen and undervalued Chinese yuan also play roles in this tale of currency chaos, from a European exporter's perspective. Nearly every day, another company announces more lost earnings and job cuts and blames the currency commotion.
(Excerpt) Read more at latimes.com ...
The simple issue at hand is who controls the total quantity of $ credit can debt in the economy, and who benefits from increasing it.
Maybe you are some 2nd rate publicist for Greenspan, I dunno. But you seem awfully concerned to obscure, deny or ignore the fact that money is created by the treasury / federal reserve (with perhaps, and ignoring their golden slice of the action, largely irrelevant middle men in the transaction); that its effect has been inflationary; that certain folks/entities benefit at the expense of other folks /entities; and that it creates perverse incentives that distort the economy and lead to malinvestment.
Why are you avoiding my very simple question? Just admit your statement was wrong, and I'll answer the very simple questions that I'm sure you already know the answers to.
Because, operationally it is not wrong. The treasury prints treasuries (because its tax revenue falls short of its expenditures), it sells treasuries, and to the extent this affects economic growth and monetary targets, the federal reserve offsets the effect by increasing reserves through open market operations by purchasing treasuries to increase reserves (which through fractional reserve banking increases total cash and credit in the system). In short, when the government is short of funds it prints it.
If that's what you think, I can't help you.
Warfare, economic warfare.
Warfare, economic warfare.
Kids have the idea that money always comes in stacks of tens and twenties, and by the time they grow up they learn to deal with checks, banks, and wire transfers.
The total amount of US currency (dollar bills, coins, etc.) is less than $800 billion. All the bank accounts (checking, savings, CD, money market accounts) total close to $6,000 billion.
For every dollar that gets printed, seven or eight are what people say they got in the bank.
"Believe", "feel", "decide" maybe, but "think" may not be the operative word here...
After I posted that, I realized my word choice could have been better.
Yes, the Fed increases the money supply. Do you agree that “The real problem with the US$ as a reserve currency is that whenever the US government has been running a bit short it just prints some more”?
Now, on the one hand I have Toddsterpatriot, who says the government doesn't print money to help fund itself.
On the other hand I have Alan Greenspan who tells us that that is exactly what the government does.
Who to believe - Toddsterpatriot or the former Chairman of the Federal Reserve Board. It's tough. Expat tells me I cannot think. So expat tell me. Who is right on this point? Greenspan or Toddsterpatriot?
“There is a coming competition of currency devaluation that will result in another trade war. Europe and Asia have received a free ride since America has always been the consumer of last resort with a strong currency.”
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What the hell is China going to buy from us? THEYRE COMMUNIST SLAVES WITH NO MONEY To SPEND! If the Chinese economy busts, the government will just sweep in and take their money. THEYRE COMMUNISTS!
STUPID FREE-TRADERS! (not you)
Oh for chris efin sakes, save the patronizing lecture of fractional reserve banking for Toddsterpatriot or groanup. Most of us know that the Federal reserve creates very little of the money by actually printing federal reserve notes with quaint little pictures of former US presidents on them. Most of the created currency is in the form of computer bits credited by the Federal reserve to depository accounts as the result of open market operations.
So what is the efin point? At the end of all of your mumbo jumbo does the federal reserve create through its actions money, or doesn't it? If it doesn't who else creates money (other than the banking system through the multiplication effect from fractional reserve banking that only you are so arrogant enough as to assert no one else understands)?
When you consume someone else's production in exchange for currency that the federal reserve creates in the banking system, who is getting the free ride?
I used to think Toddsterpatriot was a shill for one of the big wall street banks. Now I think that he is just a second rate publicist for the Treasury secretary (I’m shocked to discover that the federal government is using the federal reserve notes it prints to make demands on goods and services in the economy. Shocked I tell you).
“That statement actually made me laugh [both at you and the state of our education system]. You must have attended public school.”
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You libertarians don’t make me laugh when you export American jobs so you can grease your corrupt little palms with slave labor.
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