Posted on 11/22/2007 2:26:04 PM PST by Kid Shelleen
The weak dollar is threatening the survival of European planemaker Airbus, chief executive Tom Enders told workers in Hamburg on Thursday. And the firm once again warned that its cost saving plan would have to cut deeper to counter the impact of the weakening US currency.
Airbus is owned by European aerospace and defence group EADS.
"The dollar's rapid decline is life-threatening for Airbus," Mr Enders said in the speech to employees.
(Excerpt) Read more at news.bbc.co.uk ...
It depends on who you are and what you are buying. For those outside the US looking to purchase US made goods, it is great. For people in the US, non-US made goods are higher, which is bad. It also drives up the price of oil as most oil exporting countries use US dollars and if US dollars buy less, they want more of them.
"BOEING!!!!"
LOL! How stupid do they think that everyone in the world is?
What international manufacturer does not hedge the currency markets that it sells in?
Of course it does.
Airbus is no different than any other Socialist fiasco, i.e, it isn’t Bush’s fault.
I figured out that much but since we import most of our crap from china and they peg their currency to the dollar our import cost should not go up so much, meanwhile our exports are more affordable to other countries;right? So why are countries “decoupling” from the dollar?
Wow, they sound like Democrats.
As to the question, a weak dollar is good for US companies and bad for foreign companies. It is good for US workers and bad for foreign workers. It is, however, bad for US consumers who buy foreign goods and good for foreign consumers who buy US goods. If the dollar keeps getting weaker and weaker (i.e. goes from 1.45 dollars per euro to 14.50 dollars per euro), then it can be bad for the US economy. But if it stays fixed at a weaker exchange rate for a good long time without getting any weaker, foreign economies will end up taking major financial hits. In the run long, the currencies of somewhat open economies may weaken periodically, but tend to move back towards a historical average. This includes partially-open economies like Malaysia, Indonesia and Thailand, all of which went through a major devaluation during the Asian currency crisis.
Anyways, if the Europeans want more Euro’s floating around, they need only buy more goods and services outside the EU. But they don’t. They treat the EU as dear. Thus the Euro is dear. Thus it is scarce compared to the dollar.
The EU, bairly elected, and basically a elite socialist, shove down the Europeans thoat entity, is in a pickle.
I feel the EU will climb, then collapse into worthlessness, that will make the sub-prime look like a paperboy missing his receipts for a week.
My 2 cents. Your performance may vary. Past performance is no guarantee of future performance.
European central banks are keeping their interest rates above ours to fight inflation. This makes their government bonds more attractive than US treasuries. The coming European recession (thanks to their overvalued currency) will cause their central banks to cut interest rates fast and hard, leading to a euro dive that moronic FX speculators will then see as an indicator of the end of the European economy. A lot of the current angst over the dollar's decline is just overheated rhetoric inflated by anti-Americanism.
It like astronauts’ underwear. Depends.
A stable currency is the most desirable (and hard to define.) Ideally, we would have a Baby Bear dollar, not too strong and not too weak. Again hard to identify or achieve.
While a “weak” dollar helps exports, it raises the price of commodities we import, like oil. So you may need more money to fill up your tank, but at least you have a job to drive to.
You’re a pretty smart guy for a glorified nailer!
Happy Thanksgiving to you, man!
Thanks; You have my vote for president :)
Happy Victory Over Indian Savages Day!( i might be confused )
A weak dollar is bad. It is just like infaltion but simply not as noticible,
Long runs are easy to plan for, but if that scenario is the case, then that is the way of it.
Like our heavy industries.
You nailed it.
Mostly good for the US, bad for the EU. When the dollar declines, US goods become cheaper overseas, and that means we can sell planes easier overseas, and still make a profit. Also, if the dollar is going down, then that means that EU goods become more expensive in the US, and that helps US manufacturers sell their goods in the US, while the EU has more difficulty making a profit on goods that it sells in the US.
On the other hand, a weak dollar means that imports will cost more, and that will increase the US cost of living, so in that respect a weak dollar is bad. However, protectionist policies have the same effect, so you don’t really gain anything by trying to manipulate imports. Better to simply let the market decide what the terms of exchange should be, as we’ve been doing for the most part.
It’s interesting though that they claim the weak dollar means the death of Airbus. My suspicion is that they are simply using the weak dollar as a scapegoat for the problems they would have in any event.
They are decoupling from the dollar because they’ve been manipulating the exchange rate by acquiring dollars. By acquiring dollars, they’ve kept the dollar artificially high, with the thought that a high dollar would help their own exports. But the downside of that is that we can print dollars faster than they can acquire them. Eventually, they find they can’t keep it up, and at that point, they panic, and realize they’ve got to liquidate their dollar holdings in order to avoid getting caught holding the bag.
It does hurt us in savings and those on fixed incomes etc. While being better for those buying us made goods however what is still made in the US and made for export these days?
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