Any end to terrible exchange rate?
Oct 13th, 2005, 07:45 AM
#42
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Definitions. Terrible - hard to bear. How about - unfavorable. I suggest that demograhic numbers may affect long term USA dollar values. The English population is rather stable, as is France and Germany. Infrastructure in these countries is getting paid for. Conversely USA population is growing at a rate of about 1% a year. 3,000,000! The present USA administration is not taxing its people to pay increased infrastructure costs. It is borrowing abroad! The interest being paid on these loans is a dollar devaluating factor. Printing press money! A prudent person should expect to buy British pounds at even higher prices.
Oct 15th, 2005, 12:00 AM
#43
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When I originally posted this question on 9/24 I was just looking for some general education on what causes the exchange rates to go up or down. To Patrick and janis - thanks a lot for making me feel like an idiot!!! To xyz123 and maadimom - I probably do tend to look at the price of many things in London and find them to be about the same in pounds as I find them at home in US dollars. For example: when I look at a pair of shoes priced at 40 pounds in a London department store I mentally compare a pair of shoes (same quality and style)that I could buy in a US department store for $40.00. Now, using flanneruk's figures of 1 pound = .56 - I realize that .56 cents isn't exactly half, but for ease of figuring - that's still pretty darn close to half. Now I still may be way off-base here but I do find that many hotel rates, food, etc. of like value costs the same in dollars and pounds. Perhaps I'm "rounding off" when I shouldn't but when I go to Barclays Bank, hand the teller $100.00 and get back $56.06.......that is roughly 1/2 in my book. But I'm not going to let it get me down. I'm booking a flight and hotel to go back to London during the first week of December. I can't wait! By the way, Does anyone know if all the tubes and tube stations have been restored after the bombings?
Oct 15th, 2005, 02:23 AM
#44
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oh please...all this t%t for tat...republicans this, democrats that. besides the fact that this sort of discussion is a complete bore, it also stops americans from seeing the bigger picture...which is quite dangerous IMO.
Oct 15th, 2005, 05:07 AM
#45
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There has been talk in Germany and Italy of ditching the Euro altogether and going back to their Marks and Lira. Those 2 countries got the short end of the deal when the Euro took over, and the poorer countries of the EU (Greece, Spain) got the better end. Looks like the Euro experiment will end in failure, just like the EU constitution did. UK was smart in staying away from the Euro. As to the value of the dollar, it rises, it falls. Just like always.
The fundamentals still favor the dollar and the pound sterling.
The fundamentals still favor the dollar and the pound sterling.
Oct 15th, 2005, 05:53 AM
#46
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I can't control exchange rates of cost of living. We travel where we get good value. We avoid the international hotel chains in favour of the small local ones or b&b's and we never eat in the touristy areas. But another side of the coin is that we have vacationed in the US twice during the past 9 months. The first was a cruise and we spent several extra days shopping in Florida. This is the first time that we shopped while in the US in a number of years....and we had to buy an extra suitcase to bring it back. Last month we were on the US west coast for the same reason-it has become more affordable for us. We are going to the Dominican Republic in Dec. because the exchange and cost of living is 'good' at the moment.
Oct 15th, 2005, 06:16 AM
#47
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In all due respect, I haven't seen anybody who thinks there is the slightest chance of the euro going under...and I don't see how you can see the poorer countries made out better. People in Ireland have told me that prices have steadily gone up because of the euro and the same is true in Spain so to say the poorer countries got the better end of the stick really doesn't make sense.
Most economists believe, from what I have read, that it is inevitable that sterling will be replaced by the euro adn of course all the former Soviet bloc nations which have entered the EU will be going on the euro in the not all that distant future.
What is your source of this?
Most economists believe, from what I have read, that it is inevitable that sterling will be replaced by the euro adn of course all the former Soviet bloc nations which have entered the EU will be going on the euro in the not all that distant future.
What is your source of this?
Oct 15th, 2005, 07:46 AM
#48
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"Most economists" aren't anytthing like stupid enough to believe that ANYTHING is inevitable.
And any economist who seriously believes Britain's joining the euro is inevitable can't possibly be taken seriously - because he or she is making a political forecast, and that's encroaching into a competely different area from the economist's expertise.
From a straightforward economic point of view, Britain's decision to stay out of the euro has been the best possible decision: best for Britain (because on every single criterion that matters our economy has outperformed the eurozone since the euro was introduced), and best for Europe (because our free economy is the only job-creating machine in Europe, and we're the only place most ambitious Frenchpeople, Lithuanians or Poles can find jobs).
But whether it's good or bad for Britain, our "independent" currency (for no currency is truly independent) is our concern. Whether we choose to combine it with Europe's is our decision. There is no historical inevitability about it.
But every time some European supremacist has tried to force us into abandoning our independence, history has shown we were right to resist. Whether it was Philip, backed by the Papacy, trying to force the Inquisition onto us, Napoleon, Hitler or Stalin and his heirs. Our refusal to accept the "inevitable" has - in every case - been for the benefit of Europe as a whole.
And the euro's no different, though less emotional. The inflexibilities the euro has imposed on the eurozone economies are THE single major set of reasons Italy's in recession and Germany's growth is close to zero. The euro has, in reality,been an abject failure, the eurozone's citizens understand that perfectly, but the eurozone politicians won't admit (or possibly even understand) it.
I certainly woulodn't bet on the euro being used in all its current countries ten years hence (though I'd certainly bet on our remainng outside it). And no sensible observer should either.
And any economist who seriously believes Britain's joining the euro is inevitable can't possibly be taken seriously - because he or she is making a political forecast, and that's encroaching into a competely different area from the economist's expertise.
From a straightforward economic point of view, Britain's decision to stay out of the euro has been the best possible decision: best for Britain (because on every single criterion that matters our economy has outperformed the eurozone since the euro was introduced), and best for Europe (because our free economy is the only job-creating machine in Europe, and we're the only place most ambitious Frenchpeople, Lithuanians or Poles can find jobs).
But whether it's good or bad for Britain, our "independent" currency (for no currency is truly independent) is our concern. Whether we choose to combine it with Europe's is our decision. There is no historical inevitability about it.
But every time some European supremacist has tried to force us into abandoning our independence, history has shown we were right to resist. Whether it was Philip, backed by the Papacy, trying to force the Inquisition onto us, Napoleon, Hitler or Stalin and his heirs. Our refusal to accept the "inevitable" has - in every case - been for the benefit of Europe as a whole.
And the euro's no different, though less emotional. The inflexibilities the euro has imposed on the eurozone economies are THE single major set of reasons Italy's in recession and Germany's growth is close to zero. The euro has, in reality,been an abject failure, the eurozone's citizens understand that perfectly, but the eurozone politicians won't admit (or possibly even understand) it.
I certainly woulodn't bet on the euro being used in all its current countries ten years hence (though I'd certainly bet on our remainng outside it). And no sensible observer should either.
Oct 15th, 2005, 10:05 AM
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xyz123:
A simple google search 'germany out of euro' yields many hits. This is but one. I can't seem make i a hotlink, but just paste into your browser.....
http://news.bbc.co.uk/2/hi/business/4599681.stm
A simple google search 'germany out of euro' yields many hits. This is but one. I can't seem make i a hotlink, but just paste into your browser.....
http://news.bbc.co.uk/2/hi/business/4599681.stm
Oct 15th, 2005, 10:35 AM
#51
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<b>G...R...</b>
Interesting reading, but it's somewhat dated.
The article was published on 1JUN and much of this "rumoured" action was suppose to happen over mid-summer. It's almost NOV now.
IMHO, the Euro is not going away and none of the major members are leaving the currency. They all knew that once they were commited to it, it would become almost impossible to leave without creating a major economic disaster.
As far as UK joining? I doubt very much it will happen in the near future, but maybe in decade or 2 it could happen.
Interesting reading, but it's somewhat dated.
The article was published on 1JUN and much of this "rumoured" action was suppose to happen over mid-summer. It's almost NOV now.
IMHO, the Euro is not going away and none of the major members are leaving the currency. They all knew that once they were commited to it, it would become almost impossible to leave without creating a major economic disaster.
As far as UK joining? I doubt very much it will happen in the near future, but maybe in decade or 2 it could happen.
Oct 15th, 2005, 10:40 AM
#52
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Hi flanneruk...
I want to make it clear, I was not expressing my opinion in my posting; I certainly am not smart enough to know whether or not it's to Britain's advantage to join the euro nor quite frankly is it any of my business.
However, you guys have not been able to completely resist EU pushing. Why is Britain suddenly using metric weights and measures? (grams and liters)...oh I know thankfully the pubs still serve drinks in pints and mind you, I would be in favor if the US went on the metric system but isn't that something Brussels imposed on Great Britain? And I know you've been able to hold onto miles and yards and feet and inches, but for how long?
My friends tell me that many Brits are opposed to the euro because they wouldn't know what to do if the Queen wasn't on the currency.. I don't know if they're pulling my leg or what (although they can certainly put the queen's portrait on the back of the euro coins)....
Oh well....
I want to make it clear, I was not expressing my opinion in my posting; I certainly am not smart enough to know whether or not it's to Britain's advantage to join the euro nor quite frankly is it any of my business.
However, you guys have not been able to completely resist EU pushing. Why is Britain suddenly using metric weights and measures? (grams and liters)...oh I know thankfully the pubs still serve drinks in pints and mind you, I would be in favor if the US went on the metric system but isn't that something Brussels imposed on Great Britain? And I know you've been able to hold onto miles and yards and feet and inches, but for how long?
My friends tell me that many Brits are opposed to the euro because they wouldn't know what to do if the Queen wasn't on the currency.. I don't know if they're pulling my leg or what (although they can certainly put the queen's portrait on the back of the euro coins)....
Oh well....
Oct 15th, 2005, 11:00 AM
#53
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My statement was 'there has been talk of getting out......'
There certainly has been talk, alot of it after the embarrassing spectacle of France voting NO on the constitution. Followed by Netherlands.
I also think talk of 'inevitabiltiy' of total EU integration is a bit premature. A single european entity revolving around the Franco-German axis simply scares the bejesus out of the rest of the Europeans. Deja-vu anybody?...
There certainly has been talk, alot of it after the embarrassing spectacle of France voting NO on the constitution. Followed by Netherlands.
I also think talk of 'inevitabiltiy' of total EU integration is a bit premature. A single european entity revolving around the Franco-German axis simply scares the bejesus out of the rest of the Europeans. Deja-vu anybody?...
Oct 15th, 2005, 11:26 AM
#54
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>http://news.bbc.co.uk/2/hi/business/4599681.stm
This is pure nonsense, can you blame the Stern for wanting to sell a few more copies?
. Funny though, that the BBC published it... German tabloids work a lot like british ones.
This is pure nonsense, can you blame the Stern for wanting to sell a few more copies?
. Funny though, that the BBC published it... German tabloids work a lot like british ones.
Oct 15th, 2005, 11:30 AM
#55
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There's always lots of talk about anything remotely controversial. There's still lots of talk about who killed JFK, whether American astronauts really landed on the moon, whether Princess Diana was killed on purpose, yadda yadda.
I would hardly call the euro a total failure. Some of the companies I've worked with believe the euro has helped them. And Germany's economic problems have at LEAST as much as trying to prop up its poorer East German brother as with the euro.
And for all the talk about the UK's fabulous economy (along with its fabulously overpriced housing market), Austria and Switzerland both have lower unemployment rates.
I would hardly call the euro a total failure. Some of the companies I've worked with believe the euro has helped them. And Germany's economic problems have at LEAST as much as trying to prop up its poorer East German brother as with the euro.
And for all the talk about the UK's fabulous economy (along with its fabulously overpriced housing market), Austria and Switzerland both have lower unemployment rates.
Oct 15th, 2005, 12:01 PM
#56
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Switzerland has a low unemployment rate precisley because it is NOT part of the EU, and does not use the Euro.
And Austria; there's an example of an EU country standing in the way of further integration. They took a beating for standing against Turkey at the EU shindig a couple weeks ago. Austria is probably the most right wing of the EU.
The most vibrant economy in Europe is Ireland, another EU-skeptic country, but fully part of the EU.
And Austria; there's an example of an EU country standing in the way of further integration. They took a beating for standing against Turkey at the EU shindig a couple weeks ago. Austria is probably the most right wing of the EU.
The most vibrant economy in Europe is Ireland, another EU-skeptic country, but fully part of the EU.
Oct 15th, 2005, 01:07 PM
#57
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flanneruk, Ireland has been at least as successful as Britain in economic growth and job creation and they adopted the Euro. Most important is they adopted a number of employment prectices and policies favorable to investment which France and Germany still refuse to do. Maybe Merkel will be able to make the necessary changes in Germany. Thomas Friedman had an excellent article in the New York Times of June 25 titled "The End of the Rainbow" summarizing the changes that occurred in Ireland.
xyz123, prices in Ireland have gone up because people have more money, a natural result of economic success not because they adopted the Euro.
While thumbing thru Kiplinger's magazine in the ophthamologist's office on Thursday, I came across a reference to this website which compares the cost of living and salaries in most US regions:
http://kiplinger.salary.com/CostOfLi...coll_start.asp
There are two components to the cost of vacations. The first is the cost of living in the area you are visiting compared to your home. The cost of living in San Francisco is 55.7% more than Worcester, MA. according to the website. That doesn't seem a bother to the inhabitants of SF but it sure makes an inhabitant of Worcester think twice about visiting. A resident and visitor will have different spending patterns so a visitor can moderate the difference by judicious choices but probably can't eliminate a discrepany of that magnitude.
The second component comes into play when the currencies are different. Now the long term holder of the foreign currency must make adjustments for the future worth of the currency against his own. The opinions of all the participants in the currency markets determine the exchange rate. In effect, currency is priced much the same as a stock. The buyer, the seller, the holder all have an opinion of the future worth of a stock (or the currency) and THE PRICE IS SET FOR A MOMENT. There are constant changes in conditions and perceptions so the price is in constant flux but there are trends based upon the biggest influences: deficits, energy prices/ availability, economic activity, balance of trade, interest rates.
UBS predicts $1.20 per Euro is close to the highest level and their estimate for Dec 06 is the Euro will be at $1.40. I don't know if they have projections for the GBP but they do expect weakness against the Japanese yen.
xyz123, prices in Ireland have gone up because people have more money, a natural result of economic success not because they adopted the Euro.
While thumbing thru Kiplinger's magazine in the ophthamologist's office on Thursday, I came across a reference to this website which compares the cost of living and salaries in most US regions:
http://kiplinger.salary.com/CostOfLi...coll_start.asp
There are two components to the cost of vacations. The first is the cost of living in the area you are visiting compared to your home. The cost of living in San Francisco is 55.7% more than Worcester, MA. according to the website. That doesn't seem a bother to the inhabitants of SF but it sure makes an inhabitant of Worcester think twice about visiting. A resident and visitor will have different spending patterns so a visitor can moderate the difference by judicious choices but probably can't eliminate a discrepany of that magnitude.
The second component comes into play when the currencies are different. Now the long term holder of the foreign currency must make adjustments for the future worth of the currency against his own. The opinions of all the participants in the currency markets determine the exchange rate. In effect, currency is priced much the same as a stock. The buyer, the seller, the holder all have an opinion of the future worth of a stock (or the currency) and THE PRICE IS SET FOR A MOMENT. There are constant changes in conditions and perceptions so the price is in constant flux but there are trends based upon the biggest influences: deficits, energy prices/ availability, economic activity, balance of trade, interest rates.
UBS predicts $1.20 per Euro is close to the highest level and their estimate for Dec 06 is the Euro will be at $1.40. I don't know if they have projections for the GBP but they do expect weakness against the Japanese yen.
Oct 16th, 2005, 02:25 PM
#58
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"Switzerland has a low unemployment rate precisley because it is NOT part of the EU, and does not use the Euro."
That's a very interesting comment, but I was pretty sure that Switzerland had a low employment rate before the EU formed and even before there was such a thing as a Euro. No?
That's a very interesting comment, but I was pretty sure that Switzerland had a low employment rate before the EU formed and even before there was such a thing as a Euro. No?
Oct 17th, 2005, 03:08 AM
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Switzerland is not an EU member, neither is Norway.
Switzerland has kept a decent economy and a low unemployment rate because they are not bound by the rules of the EU as it relates to hiring/firing and other issues related to employment.
Not using the Euro keeps the Swiss's money at a value determined by Swiss policy, not determined by Brussels.
Also, it should be understood that the EU commission is not an elected body, they are accountable to nobody.
Switzerland has kept a decent economy and a low unemployment rate because they are not bound by the rules of the EU as it relates to hiring/firing and other issues related to employment.
Not using the Euro keeps the Swiss's money at a value determined by Swiss policy, not determined by Brussels.
Also, it should be understood that the EU commission is not an elected body, they are accountable to nobody.
