Euro 'to hit 1.10 U.S. cents'

CNN ^ | July 1, 2002

[TaxPayer2000]

LONDON, England (CNN) -- As the euro heads towards parity with the U.S. dollar, one currency watcher expects the euro to hit $1.05 by the end of the year.

"Its only a matter of time before parity but it won't stop there. It may be at 1.05 (U.S. cents) by the end of the year and then 1.10 a year from now," Steve Barrow, currency economist at the Bear Stearns, told CNN.

[Dog Gone]

There's no reason why it couldn't go to $1.17 or more. It's an easy way to boost our exports, and nobody really feels like vacationing in Europe now, anyway.

[Jimmy Valentine]

The Euro is a debased currency. The EU member nations will drag each other down with their socialist over regulated and over taxed economies.

If you want to play with currencies, try the Swiss Franc. Backed by gold.

Regards,

[Notforprophet]

That wouldn't be Jewish Holocaust gold, would it?

[Dog Gone]

Currency trading is too specialized for me, but I'm quite aware that the Federal Reserve is quite good at playing with money. Greenspan wants a weak dollar right now, and he'll get it.

Japan is opposed to that, and they're buying dollars in order to keep the yen from rising. But Alan can print them faster than the Japanese can buy them, so they're going to lose that game.

[dts32041]

You are correct our exports will go up.

However if you be in the bungling federal government (look at their accounting methods), your funding will go down.

[Brilliant]

It is only going to hurt the Europeans. They ought to figure that they won't be able to sell their goods here.

[On the Road to Serfdom]

But Alan can print them faster than the Japanese can buy them

So true (LOL)

[On the Road to Serfdom]

OOPS- obviously my last post was meant to be to Dog Gone

[Snowyman]

Backed by gold

So is the Euro, At $290 us/ oz. it's backed 15% with gold. The higher the gold price, the higher the percentage. And the US dollar is backed by?

[max_rpf]

BS -- In their socialist dreams. I was watching the ECB today talk about how Europe will benefit from the rising EUR and US accounting failures. Whatever.

- Stronger EUR hurts EUR exports (a growth sector in Europe).

- Europe will find that it is not immune from the 'creative accounting' scandals bred by the 90s. After all, everyone was incentivized by the competition for capital -- the problem is that when one person cheats other will follow or die.

- The ECB is also concerned about the deficit spending that 'countries need to reign in'. They have no idea how they are going to work fiscal and monetary policy in the system. If the EU goes into a recession just what are they going to do? How do you finance the generous social benefit programs when you are restrained by a third party? Raise taxes -- sounds like a difficult system even without the internal politics.

- Everyone knows that the minute things stabilize here everyone will come back. Half of these currency forcasts are predicting a permanent change in the global investing communities confidence in US long term prospects -- This after the largest tax cut in world history -- Funny if you think about it.

[dts32041]

No problem I figured that out.

[McGavin999]

I really don't think most of the world realizes just how much they depend on the US economy. This flight from the US markets is almost funny. So many of them don't realize that our economy is NOT the market. As to consumer confidence, I don't really think it will slow down for very long.

The ones who should be sweating are the Saudis!

[DeaconBenjamin]

Yes, but what if the Japanese get irritated, pick up their ball (i.e., cash out their US investments) and go home?

[Dog Gone]

And do what with that money? Their economy continues to shrink. Their interest rates are at approximately zero percent.

There's nothing to invest in at home that won't be worth less tomorrow.

[Guillermo]

What good is gold anyway, other than the perceptions people have about it?

It has no use, really, other than for show.

[Dog Gone]

That argument proves too much. What good is paper money, then?

[DeaconBenjamin]

So long as the dollar is dropping, keeping it in yen (hidden in mattresses if you will) is more profitable. More likely, they will use the money to fund their expanding economic investment in the PRC.

[Snowyman]

, other than the perceptions people have about it?

It seems you may have answered your own question. Ask a Saudi how he would prefer to be paid for his oil and if you insist on believing that his reply would be American dollars then ask why he , in many of his oil contracts, has the option of being paid in gold rather than dollars.

[theKing]

Well, to anwser your questions Gold and Paper Money are both mediums of exchange; meaning, they are used to buy stuff because people believe that they are valuable.

Now Gold, because there is a set quantity of the stuff that cannot be influenced by political processes, tends to be seen by smoe people as being better than Paper Money, which; of course, can be influenced by political processes sometimes to tragic effect.