Currency woes for american sellers.

Nail. Head.

 

FUCKING HELL. Spent 20 mins writing a long reply about my thoughs on the EURO and hit some key combo by mistake that shut the browser window. LOVELY! Ill summarize it all in a few lines...

Yeah, I get what you are both saying, but spreading the risk over a bunch of economies should even things out quite well. If one country would get into trouble, I think the Euro would still stand quite firm.

There are inflation rules in place and there are other ways to control inflation other than the base interest rate. Of course, handing off more power to the European Central Bank isnt all positive. I seem to remember just the other year when Germany wasnt it that didnt meet the inflation goals, but the European Central Bank did nothing about it.

I myself voted NO to the Euro a few years back. I am all for a common European currency but if I want the Euro and the way it works...thats a whole nother question.

TBH I care less and less about which currency is in use. I use my VISA to pay 90% of the time, and in another few years I hope to never have to use coins/notes. Actual bills are all paid by online banking so Ive never had to touch a cheque in all my life (well...actually I had to accept some cheques from an american employer 5+ years ago).

Meh...still mad about loosing my original post ;P

Shiggsy

 

Yep, Bingo! Hence the reason Britain has fought so hard to retain Sterling currency and fight off any suggestion of joining the Eurozone.

London is also a great hub and moving point between markets and simply becoming yet another Eurozone stock market would potentially weaken it's position in the financial sector.

....or something like that ;-)

 

I havent been keeping up lately, but I went to go look for a book that my macroeconomics professor at university wrote on this very subject ~2 years ago.


The common currency and the free movement of capital will result in the nominal interest rates leveling out in the Eurozone.
A full equalization will however most likely never occur. Smaller lenders are referred to the local credit market where competition is limited.
Even though the nominal interest rates will level out, the real interest rates can vary a great deal between the Eurozone countries and regions. This is due to the differences in inflation. Countries with high inflation will get a low real interest rate and vice-versa.

Even though the nominal exchange rates between the Eurozone countries have been fixed, the real exchange rates are not fixed.

 

The bottom line is that if you have keep any USD, convert it all to gold, asap.

 

Well, this is where the European dream starts to get complicated (and this goes rapidly OT). There is an unspoken goal behind much of the EU philosophy & that is a desire for some sort of federal European entity - akin to a United States of Europe. Monetary union, leading to economic union, leading to political union. It's unspoken, since voters aren't likely to go for it, at least not in too big a step at a time. The argument given as to why monetary union (aka a single currency) is a good idea is principally that it makes trading within the Eurozone less complicated & would lead to greater overall currency/economic stability. There are several major issues, though - the most notable one is that member countries lose what is traditionally one of their main tools for controlling their economies, namely interest rates. That control goes to the European Central Bank. The argument you then get into, is whether you are better off as a country to be outside the EMU & retain all your economic sovereignty, or inside where you can theoretically exert more influence on EU economic policies.

And conversely, if the Euro rises, all member economies benefit. That's where the stability aspect comes in.

I'll be honest, I'm not sure Europe is ready for this kind of unification, but I think I broadly like the idea of European countries being able to work more closely together in economic, social & with some hesitation, political terms.

 

What he talks about here is not the base rate. The "Real" interest rate takes into account other things such as inflation.

http://www.erylmcnallymep.org.uk/euro.htm see point 8 and 9

 

The question is: do you think I should by US dollars ?
I mean, it's only a crisis, if it comes back to its previous rate, miam miam, gonna make a lot of money

 

@cyberguile


you mean cash USD ? forget it unless you plan to spend it in the US.

you won`t get the actual exchange rate when you buy USD at your bank and you will get a even worse exchange rate if you sell it.

 

Why can't it be like Star Trek where there is no need for currency?

 

you mean Star Trek Communism ? ;D

 

I'm in the US and I will still buy from Japan. I bought a demo from Yakumo a couple weeks back and I'll probably keep buying from him, so long as he continues to have stuff I want.

Honestly, I find that there is seldom much in the UK and Europe that I actually want to buy, considering that I'm unwilling to purchase anything PAL.

The dollar vs. the yen isn't all that bad. It isn't great for us like it used to be, but it isn't awful either, both currencies are sort of in the poops, unlike the Euro/Pound.

 

well my advice (standing in professional shoes) would be to see a (legally) competent financial advisor in relation to specific investments concerning the US Dollar.

If all goes to hell, hey, you can at least have a shot at suing him!

 

I'm similar to Bert, although I earn USD and live in JPY. Luckily, the yen is the only currency in the free world that sucks just about as bad as the dollar. So, I'm safe for now. However, Assembler's original post is misleading. Selling and buying within the US should have no effect (other than lower sales from a shitty economy). Sales to Europe should increase. If you're setting your prices in dollars, you're still making the same money, but you should get way more (overseas) bites. A weak dollar isn't a bad thing if you're living in dollars. The JPY was weak against the dollar to the tune of 124 JPY/1 USD before the dollar bottomed out. Japan was actually somewhat cheap for a while.

It can gain. I worked with a guy that stuck his money in absolutely nothing but gold his whole life. He's in his 60's now and got fired... he doesn't really give a shit it seems as he's making out like a bandit.

nobody has a crystal ball. People are paid hundreds of thousands a year (even millions) to deal with this stuff and they make million dollar errors all the time. I have a friend that makes investments based on trends. When the yen was 122/1 USD we made a bet. I said it would hit 118 before it hit 125. All the trends said it was going up (stronger dollar) before it was going down. Of course, it bottomed out. I won 5,000 yen from him, but lost about 5% of my monthly salary and the amount of my checking account that was in USD.

And would probably need to multiply his savings by 1,000 (or even 10,000) to do that.

 

I buy in yen and sell in USD and most of my customers convert from the Euro. No complaints here.