Euro vs Dollar

[Saint Marcus]

Seems the world is losing faith in the USA when it comes to stocks and bonds, and is flocking en masse to Europe. And Europe isn't exactly doing too well itself either. What is the reason for all this.

For those who don't believe it is happening, should look at the recent Euro/Dollar currency rates.

[Lemmy]

EU isn't the main target for the terrorists

[ZoboZeWarrior]

European beers are far better :

[RGBVideo]

"EU is just boosting because US$ sucks people who think €uro is better
know nothing about economics; US is far better in the long range
Europeans know nothing about economics blah blah blah..."

Waiting for rant.

[ZoboZeWarrior]

Yes but US don't know anything about good beers ...

[Roland]

"What is the reason for all this."

The US needs to attract roughly 450 billion $ in net investment per year to fund the current account deficit. They attract 600 billion, $ rises. They attract 300 billion $, dollar drops. They see net outflows, the dollar is dead.

[Saras]

Originally posted by ZoboZeWarrior
European beers are far better :

That is probably the best piece of FX research I've ever seen

[Roland]

It's also probably the only one that makes remotely sense.

[Solly]

Originally posted by Lemmy
EU isn't the main target for the terrorists

Britain might be.

[Traianvs]

oh c'mon who's interested in britain
it's paradise for immigrants together with belgium

[The Viceroy]

Considering the Euro is still not equal to 1 dollar, I think its a little early to start arranging the Dollars funeral. Counties don't suddenly in 1 week fall from grace (not without a major catastrophy anyway) .. it happens over decades, the Euro may take over eventually .. but I believe in 20-30 years time, we will be looking at monetry union between N.America and Europe anyway .. at least, some form of exchange rate mechanism, which holds the values between 2 points.

I think its one of those temperary glitches, The US has had some bad news recently, what with 11.09, and Enron/WorldCom, and also a general feeling that it is becoming more isolationist again (although I don't think that is the case in reality).

Anyway, €-$ should stand at parity at the moment, anything either way is simply markets being markets. lets see in 5-10 years time.

[Solly]

I know. All the terrorists have to do is sneak into some lorry and they'll be here.

[Roland]

"Considering the Euro is still not equal to 1 dollar"

How is the parity level relevant, apart from a little psychology ?

[The Viceroy]

It was its original setting .. it was left to float (currency free) on the markets where it devalued to about 90cents .. since the currency is now a real thing, it has regained its value . Makes sence to use the dollar as a benchmark .. also stops all the Euro nations squabling over which currency should be the base mark.

[Roland]

It started out at 1.18 or so. And there is no need for a "base mark".