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 ...
Excellent!
From previous discussions, I know that you know how fractional reserve lending works - i.e. that the banking system creates money out of thin air and then lends it out to "earn" interest.
And each individual bank lends out less than their deposits, so who is leaching and how?
By creating credit and then charging interest on it, they are extracting wealth from society in the exact same way that a counterfeiter would.
A bank takes in deposits of $1,000,000 and pays interest. They must hold some as a reserve and can lend out the rest. You'll have to show me how that is like counterfeiting.
You can hold $US, CAD, CHF, Euros, gold and silver there. There is no fractional reserve lending.
Wow, there is a place where I can deposit my money and earn no interest? How much do they charge?
Or if you buy anything from overseas... ( ummmm, that would include every TV set on the market - and just about everything else.
It's true, I'm too smart to pay someone to hold my money.
Do you think earning 3% on a savings account while inflation is over 10% is a good deal?
Better than paying 1% while inflation is over 10%.
It's a great deal for the bank, they get to pyramid loans off your deposit -
Pyramid? You mean lending out a portion of my deposit?
How much gasoline/corn/healthcare/etc does your savings account buy now vs. 2 years ago?
How is paying goldmoney.com to hold my money going to make my gasoline/corn/healthcare more affordable?
You can do that today. Still don't see how that reduces inflation. And how long will you hold your breath for a gold backed currency?
Do you work at a bank?
They sell gold backed dollars? Gold backed Euros? Gold backed Yen?
No. Do you?
I’ll have to admit I didn’t think the financials would fall this far this fast. While I think they are still not at the bottom, there will be a counter trend rally I’m thinking about trading.
Where you do see the bottom for WFC, BAC, C
Not sure.
I'd like to talk more about your recommendation to pay goldmoney.com to hold your $US, CAD, CHF, Euros, gold and silver. How much did you pay them in the last 12 months?
Can you still use fiat money to buy gold?
Houses are being priced in gold terms in Vietnam.
You're taking your economic cues from Vietnam? Wow!
I think you should pay goldmoney.com to hold all your PMs and currency. That's less money to be lent out and more demand for my cash. The interest I earn should rise.
Are you replying just to have the last word? You’re not saying anything of substance. The banking sector is melting down because fractional reserve lending is a failed system - you’re rearranging deck chairs on the titanic.
Your recommendation of 100% reserves was something of substance?
People are pulling cash out of interest paying accounts and putting it into accounts where they are charged interest for the privilege? Link?
Then check any hard asset stock.
What do my hard asset stocks have to do with the return of 100% reserve banking?
Are you going to go down with the ship?
If you mean am I going to continue to hold funds in interest bearing accounts, the answer is yes.
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