Money

[andrewducker]

You know how the US economy is doing alright at the moment? How the stock market is way up?

Not if you calculate it in Euros it isn't.

According to the Dow Jones graph here the January starting price was 9020 and the current price is 10502, which is a 16% increase.

According to the exchange rate graphs here, last January a Dollar was worth 0.94 Euros and at the end it was worth 0.81 Euros. Which means you'd need 16% more dollars to buy a Euro at the end of the year.

Meaning that the US has pushed down it's currency and made it much harder to buy imports for a net gain of.... nothing

Of course it's actually worse than that, what with today's Dollar/Euro price being 0.79 and falling.

Still, the newspapers say that the US economy is doing well, so who am I to argue?

Comments

[bfo.livejournal.com]

It does make me wonder if it's worth me buying my dollars now for the trip i'll probably be making in September last year 300 dollars cost just under 200 pounds now it's about 168.

[yonmei.livejournal.com]

They might have fallen even further in September... ;-)

Why not buy some dollars now? I was looking up the exchange rate and thinking that since I'm definitely going to the US at some point in the next two years, it would be worthwhile buying a hundred dollars for £55 or so. The dollar might fall even further, or it might have risen again, but £55 for a hundred dollars looks pretty good right now. (I usually get most of my cash in the US from cash machines using my First Direct card, which I find better than carrying large amounts of dollars about with me, but I like to have enough cash to hand for emergencies on arrival.)

[nickys.livejournal.com]

> Still, the newspapers say that the US economy is doing well,

Well, that's not surprising since the last country to express a lack of faith in the Almightly Dollar and a desire to move to using the Euro as standard got hit with a massive invasion...

[andrewducker]

Well that is the other possibility - OPEC decides to move off the dollar to the euro. At which point the dollar will drop precipitously.

Whether they dare brave the US military is another matter...

[chipuni.livejournal.com]

Does there exist a site that shows the stock market in Euros... or, more specifically, is there a way to buy the DJIA in a Euro-based stock market? I'd love to see the chart.

[heron61.livejournal.com]

Given that the Saudis are the major force in OPEC, they can pretty much do what they want, since they are close allies of Bush. I'd honestly like to see that happen, it would kill off Bush's chances of re-election, likely help shift the US to the left, and help end US support for one of the most dangerous regimes in the world (given that the Saudi royal family and the folks that they support are backing violent Muslim extremist all over the world).

[derumi.livejournal.com]

A weak dollar is good for us. We'll be able to export more, we'll get more tourists (hopefully, non-bomb-wearing ones), and maybe that'll bring more jobs. If OPEC switches to a strong Euro, this might help give the automotive industry and their consumers more of a kick in the rear to work towards affordable low consumption or alternate fuel vehicles.

It'll hurt tourism and exports in Europe, maybe.

[kpollock.livejournal.com]

As I understand it, they have been concerned about their import/export balance for some time - i.e. they think they import too much.

I can therefore quite see this dollar devaluing as a deliberate policy (the fed certainly seem to be manipulating interest rates deliberately) to make US goods cheaper in the world market and thus encourage exports. There does seem to be some evidence that US goods are now cheap enough for that to be happening to some extent.

I wouldn't put that as a net gain of nothing.

Another point may be that if they are feeling a bit isolationist right now (as seems to be the case) getting yourself more self-sufficient could well be seen as a very good thing. Of course an isolations US is a much more worrying thing than an economically tepid one.