Europeans to use EU flag as a flag icon...

[DinoDoc]

Originally posted by Roland
I don't believe you and I won't look it up.

Where would you put it then? I'd like to see if you have the better claim to being correct.

[Roland]

Those are developments that take a lot of time. Pinning it down to a year has only symbolic value. If I had to say a year, 1789. The US revolution wasn't really national, so it is when the larger part of the french estates of the realm declared and constituted itself as the NATIONAL assembly claiming sovereignty.

[moomin]

Originally posted by Sagacious Dolphin

If the policies harmonized upon are lousy, they most certainly won't lead to more stable - or efficient - environments. Quite the contrary.

So ditch Europe because we might harmonise to the wrong level.

Nope. I claim that the EU already has harmonized at the wrong level. Mere potential has nothing to do with it, unfortunately.

That is only likely if people don't get involved and just ***** about it. If you give proactive support rather than remain a naysayer you will get the type of European Union that you want/feel more comfortable with.

If you don't help design it, don't complain if it comes out differently to how you wanted it.

It's perfectly acceptable wanting to dismantle something you feel is beyond repair, if your belief is that reforms aren't likely to give satisfactory results. As far as the EU is concerned, I think cut your losses is the best policy European states can pursue.

And while I agree that anyone showing indifference to the whole question has only himself to blame, being opposed to the notion entirely is certainly as valid a stance as trying to paint over the cracks.

[moomin]

Originally posted by Sagacious Dolphin


If you don't have foreign exchange transactions you can not have foreign exchange losses and thus foreign exchange risk is removed.

I think the conclusion definitely follows from the assertion. How can it not?

In this particular case it does not follow, since the EU has yet to accomplish the sell of the Euro as a currency to our most important trade partner, the US. Only intra-community currency risk is reduced, which I certainly don't think is worth the strains the Euro carries with it.

And those strains will show, never fear. The EU does not have the mechanisms in place that makes the dollar work reasonably well for a country as disparate as the US.

[Spiffor]

Moomin :
When did the US harmonize their money ? Half 19th century I think... When did the dollar become the most widely used money ? After WW2, replacing the pound. If you say "Euro sucks because it's not internationally worshipped after 3 years of existence and 1 year of fiducial presence", than you have definitely a short sight.

[Dauphin]

Originally posted by moominparatrooper
since the EU has yet to accomplish the sell of the Euro as a currency to our most important trade partner, the US. Only intra-community currency risk is reduced, which I certainly don't think is worth the strains the Euro carries with it.

European countries largest trade partner is not the US, it is the rest of Europe. Intoducing the Euro has removed FX risk from all intra-Euroland trade - over 50% of EU members' international trade.

The US acceptance is of no consequence here.

[moomin]

Originally posted by Sagacious Dolphin
European countries largest trade partner is not the US, it is the rest of Europe.

That's quite correct.

Intoducing the Euro has removed FX risk from all intra-Euroland trade - over 50% of EU members' international trade.

Only in theory, alas. For most high-end trade (the kind that all the EU politicos tell us is going to secure the jobs and social services of tomorrow, you know) even intra-EU trade relies heavily on components and services purchased elsewhere - and that's invariably priced in USDs. So are all commodities and all raw materials that are needed in the European industry - consider the price fluctuations at you local gas stop every time the dollar goes up and down.

I'm not saying that the Euro doesn't increase price transparency and decrease currency risk - I'm just saying that it doesn't do so nearly to the extent that its proponents would have us believe.

And I think that those positive effects come at a very high price.

[Ecthy]

You can always emigrate to the US once the EU has become one, moomin

[Provost Harrison]

Yeah, get shut of him. We don't want the malcontent around once we have unity

[moomin]

Originally posted by Spiffor
Moomin :
When did the US harmonize their money ? Half 19th century I think...

The history of the USD is far from clean-cut. Take a peek at the development of dollar at:

http://www.ustreas.gov/adc/newcur6.pdf

Fascinating stuff.

When did the dollar become the most widely used money ? After WW2, replacing the pound. If you say "Euro sucks because it's not internationally worshipped after 3 years of existence and 1 year of fiducial presence", than you have definitely a short sight.

Then it's fortunate I'm not saying that, isn't it? What I'm saying is that the often-toted line that the Euro eliminates currency risk isn't true ieven n Euroland.

[Dauphin]

Originally posted by moominparatrooper
Only in theory, alas. For most high-end trade (the kind that all the EU politicos tell us is going to secure the jobs and social services of tomorrow, you know) even intra-EU trade relies heavily on components and services purchased elsewhere - and that's invariably priced in USDs.

That is irrelevant - the source of primary components is a sunk cost. A French company purchasing from Italy cares not if the raw goods were originally from the US, or China, valued in Yen or Dongs. The only thing that matters is the cost and risk of the intra-European transaction - if the transaction were in Euros there would be no risk, if it was in Francs and Lira there would be a risk.

Hence it is the value and not the nature of intra-Europe transaction that is relevant. Your argument holds no weight.

[moomin]

Originally posted by Sagacious Dolphin
That is irrelevant - the source of primary components is a sunk cost.

In some cases. However, I'd go so far as to say that most goods today is being contracted and sold before it's even been produced, and these contracts regularly have standard currency adjustment clauses anyway.

Hence it is the value and not the nature of intra-Europe transaction that is relevant. Your argument holds no weight.

I'm sure companies like Nokia, Ericsson, Siemens, Alcatel and their 3G customers will be delighted to hear that.

[Dauphin]

In some cases. However, I'd go so far as to say that most goods today is being contracted and sold before it's even been produced, and these contracts regularly have standard currency adjustment clauses anyway.

Not between countries trading in the same currency. If they did, domestic transactions would also do the same thing to reduce their exposure. Purchases are usually agreed in a particular currency and thats it, no changes on account of currency fluctuation are usually made unless you have really strong purchasing/supplier power. You're grasping at straws here.

I'm sure companies like Nokia, Ericsson, Siemens, Alcatel and their 3G customers will be delighted to hear that

What is that supposed to mean?

[moomin]

Originally posted by Sagacious Dolphin

In some cases. However, I'd go so far as to say that most goods today is being contracted and sold before it's even been produced, and these contracts regularly have standard currency adjustment clauses anyway.

Not between countries trading in the same currency. If they did, domestic transactions would also do the same thing to reduce their exposure.

Well... duh. They do, you know.

Purchases are usually agreed in a particular currency and thats it, no changes on account of currency fluctuation are usually made unless you have really strong purchasing/supplier power.

In certain indistries. In others, long-term contracts that don't hold all kinds of adjustment clauses - including, of course, currency clauses - are almost unheard-of.

You're grasping at straws here.

I really don't think so. I'd be interested to tell us why you believe that. I'm referring to quite ordinary business practices.

I'm sure companies like Nokia, Ericsson, Siemens, Alcatel and their 3G customers will be delighted to hear that

What is that supposed to mean?

It means nobody sells teleco systems due for delivery 2005 for a fixed price. The reason you never hear the exact amount given as deals are presented isn't that they don't want to brag - beacuse they do! - but that any number presented at this point is a ballpark figure anyway, due to be adjusted by any of a huge number of circumstances that are all regulated in the deal. There's nothing mysterious or fishy about all this, and it's normal business practice even with certain long-term service contracts these days.

[Dauphin]

Well... duh. They do, you know

Give an example then.

In certain indistries. In others, long-term contracts that don't hold all kinds of adjustment clauses - including, of course, currency clauses - are almost unheard-of

If you agree a contract at a given price in a given currency you will not change that price due to currency fluctuation. If you are the person gaining why would you agree to change the contract price?

I really don't think so. I'd be interested to tell us why you believe that. I'm referring to quite ordinary business practices

Not ordinary.

It means nobody sells teleco systems due for delivery 2005 for a fixed price. The reason you never hear the exact amount given as deals are presented isn't that they don't want to brag - beacuse they do! - but that any number presented at this point is a ballpark figure anyway, due to be adjusted by any of a huge number of circumstances that are all regulated in the deal. There's nothing mysterious or fishy about all this, and it's normal business practice even with certain long-term service contracts these days

The relevance of contract pricing to FX exposure is?