Relative Strength of the Euro

My company imports several Amercian built yachts to Europe and I must admit we had a significant increase in sale from our clients thanks to a cheaper dollar vs. the Euro!

Anyway, American built boats have always been more expensive then Italian built, and now, thanks to the cheper dollar, they are almost at a same price/size ratio (for untis under 100ft!).

Problem now is that we are getting significant increase in sales price from the US shipyards once every 1-2 months due to the increase in cost of materials & fuel!

So, as boats get cheaper for the Euro/Dollar, they get more expensive for the cost of materials!

Not to make light of this conversation, which is a good topic with very serious considerations, but...

I want my dollar back! (the value, that is)

Thanks to FDR and RMN we are off the Gold Standard. The USD is worthless. The CEO of the 2% investment program I'm in is buying gold and stashing it.

Dollar is weakening

The American economy is riding on the fact that, due to previous strengths of the dollar, the dollar has been used as a stabilizing currency.
All around the world, you see enormous dollar deposits in private and national accounts.
It will not continue to be that way.
This huge amount of dollars; there are more dollars outside, than there are inside the USA,. – Is the buffer the USA governments have been using to legitimate the huge foreign deficit. The outside dollars working as security.
With the recent history of the weakening dollar (last 10 years), the strong Euro is gaining in confidence.
The changes are seen in private people changing currency for their cash deposits in their Swiss accounts, and countries changing ever larger parts of their “buffer cache”. The Chinese government is one of the later examples: Changing their dollar for euro.
As this trend takes on, the process will accelerate. The dollar will crumple.
The USA, with the enormous dept, that it has accumulated internationally, does not have the strength to resist.
Some cancellation for the USA may be found in the fact that much of the debt will be counted in dollar.
Never the less, when the currency is exchanged; dollar for euro, the USA must stand by the dollar and ends up buying them back. – Devaluation.
Its a spiral.
The USA has no chance of paying of the debt, The gold "reserve" will cover what?, 10%?
The dollar is going down!

Agreed. We are now a debtor nation. The Republicans turned a $300Billion surplus into a $500Billion deficit. We're going down and we'll take the world economy with us.

It will hurt

If/when the US economy goes down into the basement, so to speak...
It will hurt all over the world, mostly I think in the economies that are totally dependent on the US dollar, like those nations that has adopted the dollar as currency, or has locked their own currency to the dollar. It will hurt more in the US, than in Europe and Asia.
It will be a slow pain.
It will certainly be a transition for the US citizen, the day he will have to balance his American Express in Euro.

LOL yep.

US

There are many ways of improving your national economy.
One, is to boost it by declaring war:
- Well it worked for Argentina and old England with the Falklands.
Did not work for the USA with the Gulf war, nor did it work with Iraq…
Playing the rich uncle, coming to the rescue in Kuwait, who would not pick up the bill.
Saudi Arabia can not, are indebted over the roof. The royal 1000 spending 20% of the country’s income.
Iraq will not be able to in the foreseeable future, nor do they expect to pay for services rendered.
To boost economy, you need to increase national trade/put people in jobs to further spending, but not putting the people to work overseas (soldiers), sending money out…
Being the rich uncle, taking responsibility for the world, and having to front for the bill…- Is hard, if your wallet is full of IOU’s.


USA has a special place in my heart:
I love to visit, take pleasure in the land.
I have love and respect for the people.
Admiration for their dreams and accomplishments..
Great appreciation for their friendliness and good will.
But also astounded by some of their believes and
unfortunate occasional limited horizons.
I do care, but I do not always understand.

Very good post, kruse, and we certainly appreciate how you feel about our country. However our government is in the iron grip of irrational fundamentalists, and if they win again in 2008, this nation will never be what it once was-a beacon of freedom for all.

is euro strong or us dollar weak?

i am reading some good comments here, which i want to contribute with slightly different perspectives. euro is not strong and euro economy does not give strong signs for the long term.
1- euro zone is getting older much faster than any other area. italy may have 15 million less population in the next 10 years. most of the other countries, including the newly joining ones share the same sickness.
2- europeans do not want to leave the location they live for getting better jobs, so the economy does not have the dynamics to create jobs easily.
3- population is getting more conservative and instead of openning up for competition, to the contrary europe is trying to build barriers to overcome the pain, which will hurt more in the long run.
4- no single boss, so confusion rules the management. to achive common decisions take hard efforts, long time and a lot of give in from all parties, thus matter diluted.

economy is a part of life and in the long term only the sustainable simple facts rule. presently some capital owners might be taking precautions to hedge their risks of a weak dollar, but the strength of euro is only due to its position of being the alternative currency. the strength does not originate from the basic parameters of a strong europen economy.

another important factor for the long term is the military power of u.s. although i do not favor u.s. using its military might to rule the world; i see that this is another strength one needs to consider when times get turbulent. at such times, people would like to stay with the strong party. no doubt world is getting more risky as new power houses like china and india emerge.

so, in short, yes the u.s. economy is indebted with large sums, but has the potential and attraction to support a strong currency for mid term.