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  • Janos
    replied
    Originally posted by Listy View Post
    Wikipedia said the change over was in '99.
    Not exactly. As of this posting, Wikipedia says "The euro was introduced to world financial markets as an accounting currency in 1999 and launched as physical coins and banknotes in 2002. It replaced the former European Currency Unit (ECU) at a ratio of 1:1." The bills and coins were not in circulation until 2002, but the exchange rates were fixed to make transition easier.

    Check out the Euro website at http://ec.europa.eu/economy_finance/...rrency_en.htm: "Euro banknotes and coins have been in circulation since 1 January 2002 and are now a part of daily life for 315 million Europeans living in the euro area." . Prices were not in Euros until a date sometime in 2002. During that year, where I was in Germany, you could pay in either DM or Euro.

    Of course, as the website will show you, some countries are still converting over: Cyrpus and Malta will change over on 1 Jan 08.
    Last edited by Janos; 10 Oct 07, 07:00.

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  • General Staff
    replied
    Originally posted by Miss.Saigon View Post
    Again, it is not a political question for me. It is a question of the facts. The Democrats are trying to spend more than George is trying to spend. That is reality.
    Nor me. Just hard economic facts. And if we're talking about spending, I think you'll find that the Dems historically have done more on the domestic (often social program) front, so if you take out George's foreign adventure funds, you'll probably find the Dems coming in with a significantly lower spend.

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  • Listy
    replied
    Originally posted by Janos View Post
    I took it to mean Euro, and it hasn't been 8 years. The change was in 2002, IIRC, altho' it was gradual.
    Wikipedia said the change over was in '99.

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  • Salinator
    replied
    In my business when I started more than than 20 years ago, about 80 percent of the products were produced in America, the bulk of the remaining from Europe and maybe 1 percent from China at the most. Over time, American production went to China due to rising costs in the US and with NAFTA, Mexico has taken also taken a foothold. The Chinese were quick to copy American products with cheap knock-offs and killed off the American companies that gave them their very start. With the Chinese Yuan pegged to match the dollar, there is little chance that the American companies will ever make a comeback. Oddly enough, until about ten years ago, these cheap Chinese products were intended mainly for export because they had a very small domestic market for these items. The Chinese market has grown due to their own growth in prosperity and are are now demanding better products than their own cheap stuff and has turned to Europe because American products are no longer around.

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  • Miss Saigon
    replied
    As for current government spending, there are a lot of companents to it. But we can ignore those. It is safe to say that more recently the Republican "government" (Congress controls the budget) had strayed from its conservative roots and started to spend more freely. Having said that though, I question to whom you seek to go to for redress of this increased spending? The new Democratic Congress requested a budget that was $30 billion more than the president. If you truly do believe that government spending is out of control you will not find relief from this from the Democrats.

    In some areas I too believe that spending is out of control and that is the fault of the Republicans who could have done differently, However, the Democrats on this issue will not do any better, and have only shown they will be much worse. Assuming the next president will be a Democrat, it will be that much easier for them to submit bigger budgets with cooperation from the White House.

    So, if you are looking to criticise George you should put him in context with your other choices. Again, it is not a political question for me. It is a question of the facts. The Democrats are trying to spend more than George is trying to spend. That is reality.

    If you want to continue to criticize George on spending might I suggest a look at what he is spending the money on rather than how much.

    But be careful about arguing about the cost of the war. Before you take that approach you should read what Greenspan said about that recently on NPR.

    But there are plenty of things in the Budget to go after, because while the Republicans might want to spend less overall, there are some clear differences between what the democrats want to spend money on and what the Republicans want to. And it is here that you can find plenty of grist for the mill no matter what your political belief system.

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  • General Staff
    replied
    Originally posted by Half Pint View Post
    Thank you George for the Huge Foreign Debt that YOU have accumulated.
    Yes. And let's just all wait until the Olympics are over and the Chinese show how tired they are at subsidizing foreign adventure. Buy Yuan and wait till it finally floats free of the $...

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  • Miss Saigon
    replied
    Originally posted by Half Pint View Post
    Nice book answer. What is the leading export county? All imports to the US are costing more due to the weak dollar. Why has the dollar fallen each and every year since 01 IF the POTUS has nothing to do with it? How about his deficit spending? Doesn't that play just a small part in the decline of the US$ against most major currencies?
    Well Yes. I suppose you might call it a text book answer as I asked my Economics professor and paraphrased what he said.

    As for the trade deficit and falling dollar, these things are indicative of each other. As more foreigners exercising their freedom to buy what products they want, choose to buy less from the United States then the demand for dollars will fall. Meaning the value of the dollar falls as people need less of them to buy American goods and services or fewer third party transactions are denominated in dollars.

    It was not my intention to make a political statement, just a statement of economic principles. The stuff about economics in the books happens to be there because it is correct.

    As for George, it was not my intention to defend him. If anything all I was saying is to look elsewhere for your criticisms.

    As far as the spending goes, I will say a few things. Deficits don't necessarily make for gloom and doom. Look at the Reagan years. As long as the pie is growing so can debt. Think of it like getting a big pay raise. People who do so routinely take on more debt, bigger house, nicer car, etc. It doesn't mean they will default. On the contrary, it is an expression of prosperity, much as our trade deficit says a lot about American prosperity and the willingness of the world to "lend" us money because of it.

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  • The Doctor
    replied
    Originally posted by Half Pint View Post
    Nice book answer. What is the leading export county?
    Assuming you meant "country" and not "county"...Germany is the leader...The USA is second.

    Total Value of Exports...

    1 Germany $ 1,133,000,000,000
    2 United States $ 1,024,000,000,000
    3 China $ 974,000,000,000
    5 Hong Kong $ 611,600,000,000
    6 Japan $ 590,300,000,000

    We have a large trade deficit because we can afford to buy more stuff than anyone else in the world...Not because we have a weak export economy.
    Last edited by The Doctor; 09 Oct 07, 16:24.

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  • Half Pint John
    replied
    Originally posted by Miss.Saigon View Post
    Short run buying patterns are always more inelastic. Over time price increases will causes substitution effects. People will choose to vacation in the USA rather than Europe, among other things. But more importantly, China pegs their currency to the dollar so as not to disrupt trade with their biggest market.

    For countries that are purely export driven economies, like most in the third world, then having a weak currency is very important to them. This used to be true in Europe too, where they were constantly devaluing to keep exports high. As this became more and more untenable and with the European free trade zone this became no longer a matter of policy. In fact, just the opposite. The Euro was founded on an agreement to maintain a strong currency (Because the Germans want it this way and wouldn't agree to the Euro without it, and no Germany no Euro). The US has no such policy. The Euros will sacrifice output (employment levels) for the strong money policy, the US does not. The Fed doesn't have a strong money policy and has not had one in my life time. The dollar is allowed to float feely.

    Mature, diverse, well developed economies like the US don't usually peg to any other currency nor try to manage exchange rates in any significant way. The US has both significant exporting and importing sectors.

    The economy needs liquidity, in the absense of inflation pressures if you strengthen the dollar you will reduce liquidity and probably create unemployment. The week dollar is more likely to create unemployment in places like China and Europe than in the US unless they react, because the US is still the world's largest economy and everyone else needs to sell here, Euro zone notwithstanding.

    However, expect China to continue to devalue unless pressure from outside is brought to stop them. And even so, they sell more to the US so Euro protectionist reponses won't necessarily change their policy.
    Nice book answer. What is the leading export county? All imports to the US are costing more due to the weak dollar. Why has the dollar fallen each and every year since 01 IF the POTUS has nothing to do with it? How about his deficit spending? Doesn't that play just a small part in the decline of the US$ against most major currencies?

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  • Miss Saigon
    replied
    One last point for those who want to beat George Bush up over exchange rates, he has very little impact on the value of the currency. The value of the currency is primarily influence by the central bank of the United States, the Federal Reserve. The "Fed" is an independent body which has a board of governors with each member appointed for 14 years with staggered terms. These economists are not answerable to the president in a way that is similar to Judges. It routinely ignores the desires of the exeutive branch in pursuit of its goals mandated under law. That mandate is the use "monetary policy" to create high levels of employment and low levels of inflation. Unfortunately these goals are often contradictory. In fact many central banks around the world do not have dual goals like this because of the contradition. The Bundesbank in Germany was charged only with controlling inflation (they remembered the devastating destruction of private savings because of inflation and never wanted a repeat), thus the perenially strong DM. The European Central bank continues this tradition (however I am not sure what it is legally enjoined to do by statute).

    Congress with the consent of the president can influence the value of the currency using "fiscal policy" but this is not often a strategy of the congress anymore, although their spending patterns can influence the value of the currency. Although these effects are slower acting.

    The most direct governmental influence on the value of the dollar is in the hands of the Fed. If government acts to change the value of the dollar it will not be George Bush who does it.

    In the absense of Federal reserve activity the value of the dollar is based on the same thing as that of any other commidity. Consumer behavior around the world.
    Last edited by Miss Saigon; 09 Oct 07, 12:00.

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  • Miss Saigon
    replied
    Originally posted by Half Pint View Post
    Then why does the American trade inbalance continue to grow?

    HP
    Short run buying patterns are always more inelastic. Over time price increases will causes substitution effects. People will choose to vacation in the USA rather than Europe, among other things. But more importantly, China pegs their currency to the dollar so as not to disrupt trade with their biggest market.

    For countries that are purely export driven economies, like most in the third world, then having a weak currency is very important to them. This used to be true in Europe too, where they were constantly devaluing to keep exports high. As this became more and more untenable and with the European free trade zone this became no longer a matter of policy. In fact, just the opposite. The Euro was founded on an agreement to maintain a strong currency (Because the Germans want it this way and wouldn't agree to the Euro without it, and no Germany no Euro). The US has no such policy. The Euros will sacrifice output (employment levels) for the strong money policy, the US does not. The Fed doesn't have a strong money policy and has not had one in my life time. The dollar is allowed to float feely.

    Mature, diverse, well developed economies like the US don't usually peg to any other currency nor try to manage exchange rates in any significant way. The US has both significant exporting and importing sectors.

    The economy needs liquidity, in the absense of inflation pressures if you strengthen the dollar you will reduce liquidity and probably create unemployment. The week dollar is more likely to create unemployment in places like China and Europe than in the US unless they react, because the US is still the world's largest economy and everyone else needs to sell here, Euro zone notwithstanding.

    However, expect China to continue to devalue unless pressure from outside is brought to stop them. And even so, they sell more to the US so Euro protectionist reponses won't necessarily change their policy.
    Last edited by Miss Saigon; 09 Oct 07, 11:07.

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  • Redwolf
    replied
    The low dollar sucks. I use quite a bit of imported good and my European vacation won't be happy either.

    Plus, all my European friends ask me to send them care packages all the time now

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  • Overseer
    replied
    Originally posted by Half Pint View Post
    Then why does the American trade inbalance continue to grow?

    HP
    Because it's not exactly true. Well, it is true as a generalization, but not for our economy - we're not really a production country any more. We're primarily service oriented. And what things we do actually produce are generally hurt by increased costs (since we give our workers health care, good wages, etc).

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  • Janos
    replied
    Originally posted by Listy View Post
    Ummm the DM hasn't been used as legal tender for 8 years...
    I took it to mean Euro, and it hasn't been 8 years. The change was in 2002, IIRC, altho' it was gradual.

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  • 150935
    replied
    Originally posted by leatchy View Post
    Aus $ at US .90. That's the best for years. Hope it stays this way as I am heading to Europe next year and the AUS $ is now only crap as a opposed to criminal against the Pound and Euro.

    Thanks China and the Aust mining industry. Of course Australia's mineral/commodities boom works well for the rest of the world. Eventually we will buy up the world's supply of blue tiles so that we can line the hole that is left when the ore runs out and we build the world's biggest swimming pool.
    problem is finding the water lol and we need to fix that hole in the ozone layer as well so that might help

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