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So.. while everyone's been talking shit on the US economy..
Posted: Sat Mar 14, 2015 12:50 pm
by OrangeDragon
How about that Euro..?
http://www.washingtonpost.com/blogs/won ... ollapsing/
What happened?
Robert Frost can help us here. Two monetary policies have diverged in, well, not a wood, and Europe has finally taken the path well traveled by. Specifically, to boost Europe's extraordinary weak economy, the European Central Bank is buying bonds with newly-printed money, aka quantitative easing, while the Federal Reserve is far enough along that it's getting ready to raise rates. That means interest rates are falling, sometimes into negative territory, in Europe, and, at least on the short end, rising in the U.S. Think about it like this. Would you rather buy a German 10-year bond that pays 0.25 percent or a U.S. 10-year bond that pays 2.1 percent?
Investors, especially big European ones, are answering that by moving their money out of euros and into dollars. And voilà, the euro has fallen from $1.39 last year to $1.06 today.
Re: So.. while everyone's been talking shit on the US econom
Posted: Sat Mar 14, 2015 1:31 pm
by Duncan
I think where the USA has it over every other country is that they can just print more dollars and send it by the planeload overseas to pay for their expenses and it does not effect the internal US economy. Which is what they have done in Afghanistan and Iraqi. Imagine what would happen if Australia tried to do that.
Re: So.. while everyone's been talking shit on the US econom
Posted: Sat Mar 14, 2015 2:35 pm
by General Mackevili
Hahaha! Yay!
Re: So.. while everyone's been talking shit on the US econom
Posted: Sat Mar 14, 2015 3:06 pm
by OrangeDragon
Duncan wrote:I think where the USA has it over every other country is that they can just print more dollars and send it by the planeload overseas to pay for their expenses and it does not effect the internal US economy. Which is what they have done in Afghanistan and Iraqi. Imagine what would happen if Australia tried to do that.
Sure, and as long as we're the petrol dollar we'll be the reserve currency, and all the "the sky is falling" in the world isn't going to change that. Also, all Europe is doing is what we did... 9 years ago. Our currency took the hit then as well, while the rest of the world talked shit on us for it... now they're doing it to catch up after our economy sprung back and theirs is still weak.
Key difference is that when we did it pretty much the whole world's economy was weakened so the effects weren't as pronounced... since the EU is doing it a bit late, many of their trading partners' economies have recovered and its going to have a stronger impact.
Re: So.. while everyone's been talking shit on the US econom
Posted: Sat Mar 14, 2015 3:24 pm
by General Chatter
The German must be loving it ....more US people will buy a Merc or such like and other goods from Europe...and those folk from the states who are not afraid to leave their country will find European travel a little cheaper...win win
Re: So.. while everyone's been talking shit on the US econom
Posted: Sat Mar 14, 2015 8:18 pm
by Duncan
Having a strong US dollar will only last for so long.,,, It will make it easier for US to buy products overseas rather than in the US ,,,It will make USA products too expensive for the rest of the world to buy and with all the excess cash available in the banks it will be loaned out for housing, to people that have lost their jobs , for previous mentioned reasons . Then it's back to where they were before the global meltdown we had a few years ago.
What goes up , must come down.
Has the USA $ gone up, or have all the other currencies gone down ?
Re: So.. while everyone's been talking shit on the US econom
Posted: Sun Mar 15, 2015 12:50 am
by MekongMouse
I have to say, I'm excited. Last time I was in Europe it was around $1.50 to the €.
Re: So.. while everyone's been talking shit on the US econom
Posted: Sun Mar 15, 2015 1:00 am
by OrangeDragon
Duncan wrote:Having a strong US dollar will only last for so long.,,, It will make it easier for US to buy products overseas rather than in the US ,,,It will make USA products too expensive for the rest of the world to buy and with all the excess cash available in the banks it will be loaned out for housing, to people that have lost their jobs , for previous mentioned reasons . Then it's back to where they were before the global meltdown we had a few years ago.
What goes up , must come down.
Has the USA $ gone up, or have all the other currencies gone down ?
A little of both... we were artificially low and are finally rebounding to get back on track with our rates, meanwhile the EU is taking the QE plunge... and doing so a littke late in the game.
Of note, this will probably do the reil some good against the euro as well. Likely a good time for some trips back home if you're from there.
Re: So.. while everyone's been talking shit on the US econom
Posted: Sun Mar 15, 2015 1:36 am
by Soi Dog
When interest rates rise, the amount of money required to make just the interest payments on that staggering US debt soars. There will be less and less money for other government services, which will have to be made up by....you guessed it....borrowing money!! Will the Chinese lend the money forever? No. They are already reducing their exposure to US government bonds.
Re: So.. while everyone's been talking shit on the US econom
Posted: Sun Mar 15, 2015 4:49 am
by OrangeDragon
And meanwhile our GDP will increase, and that increased debt will still mean nothing... as it means now. And the chinese are the largest foreign holder... but still only make up a fairly small percent of who buys our debt.
http://foreignpolicy.com/2015/01/25/why ... good-news/