#  >  > Living And Legal Affairs In Thailand >  >  > Thailand and Asia News >  >  > Business, Finance & Economics in Thailand >  >  USD vs Euro - the future?

## watterinja

I've been watching the USD-Euro exchange rates of late. I'm interested in figuring out where to park funds for the next while - USD, or Euro?

From what I can see, so far - it looks like the USD is coming under increasing pressure. Today its hovering around $1.43   / Euro.

I'd be interested in hearing what other folks are reading into the situation & how they are protecting their investment asset values.

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## chinthee

This guy is the man and he says:

*                                         Buffett sees dollar weakness*




> DAEGU, South Korea (Reuters) -  Billionaire investor Warren  Buffett said on Thursday he expected the dollar to weaken  further, adding that South Korean stocks offered better value  than other world markets


.

Buffett sees dollar weakness - Yahoo! News

This really sucks for those of us who have most of our earnings and assets dollar denominated, even if diversified.

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## watterinja

Thanks chinthee. Warren Buffet's great.

I'm looking to convert USD to Euro-denominated in the near future. It looks like it may be on the slide for the next while.

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## Mid

and no-one would let me buy euro's at the launch @ 82c .......................

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## hillbilly

I am confused. What do you mean with the word funds? :Smile:

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## watterinja

^ Well, when quoting clients, I can go either way in USD, or Euro. Typical agreements may run for say 6-12 months with rates fixed. To bill in the most appropriate currency would be useful.

In this sense, future incomes (funds) are parked in a particular currency.

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## chinthee

DD, I think TD is ready for a business and economics thread with the number of new posters coming on.  I personally would love that, and I'll bet there's enough interest.  Those guys always posting on tv would love to slug it out over here too probably.  Mid will have to invite them, but I can get Vegasvic to come over.

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## DrAndy

I suppose the US$ will keep weakening in tandem with the oil price

that is the only way to stop rampant inflation in most western countries, as oil is paid for in US$

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## hillbilly

So how much does this cost?  :Smile:

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## DrAndy

20c or thereabouts HB

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## watterinja

> So how much does this cost?


Based on the last year's slippage - around THB 1 million (conservative).   :Sad:

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## Thormaturge

With the increasing likelihood of a Democrat government in the USA after November, 2008 I believe the Dollar will begin rising on the expectation of a more fiscally competent government.  The time to buy Dollars is probably around May, 2008.  By November the Dollar should already have risen in anticipation.  

Of course, if the Republicans manage to get in again the Dollar will drop like a stone, so maybe ditch Dollars in October just in case.

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## watterinja

Thanks TT,

I found the following chart of interest, especially when tracked over 5 years.

EURUSD - Euro in United States Dollar - Google Finance

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## britmaveric

Expect $ to rise in 08. Good time to buy $.

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## watterinja

^ Why would you expect $ to rise in 08, besides TT's point regarding improved governance?

I'd be interested in the fundamentals. From what I'm seeing, is a US economy that's run itself into what appears to be a spot of bother, that they seem to be struggling to talk themselves out of.

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## William

Exchange rates, as with most things in life, depend largely on supply and demand.  With the US's current spending in Iraq, they need to print more money than they have.  So long as the US is in Iraq, and other nations, such as the UK, maintain relatively high interest rates, it is unlikely the $ is going to increase in value to any significant amount.

Euros are a good "hard" currency to go with.  More and more of my pricing is being done in Euros.  Dollars are nice, if you don't need to move the money offshore.  If that becomes a factor, then Dollars are no longer worth the time and effort.

Also, I highly doubt a Democrat lead government, if elected, will be fiscally sound.

Just my two cents worth.

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## watterinja

> Euros are a good "hard" currency to go with.  More and more of my pricing is being done in Euros.  Dollars are nice, if you don't need to move the money offshore.  If that becomes a factor, then Dollars are no longer worth the time and effort.


Thanks, William - excellent review.

I agree completely with your view of Euros being the "hard" currency to use for pricing. The long-term history (5 yr) seems to bear out a longish-term upward projection, unless the US manages some kind of miracle. 

I used to think of the USD as the "hard" currency while the Euro was finding its feet, but the shoes seemed to have changed feet of late.

I'll begin moving towards Euro-based pricing structures in future dealings. I seem to feel more comfortable 'over there'.

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## britmaveric

$ is fundamentally strong. Septics economy is expected to increase GNP by 2-4&#37; in 2008. 

Remember feds pushing weak monetary policy, once they decide to go the other way. Watch out.  :Wink:

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## William

^not too sure I agree with that.  Costs still outweigh income.

Strange that the last two Republican governments have caused balance of payment deficits, while the last Democratic government caused a surplus.  One would usually expect it to be the other way round.

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## Mid

give me a break ,

the states is bankrupt ,

luckily the RTW can't afford to foreclose .........................

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## William

^to be fair though, not the first time.  Many recall the Japanese-US deficit of the 80s and hope things will turn out the same.

Doubt it'll happen...

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## watterinja

> ^not too sure I agree with that.  Costs still outweigh income.





> Mid
> 
> 
> 
> 
> 			
> 				give me a break ,
> 
> the states is bankrupt ,
> ...


A lot of truth in these statements, as I read things at the moment.

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## daveboy

I wouldn't invest in the dollar it won't be long before China floods the market with about a trillion dollars.

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## watterinja

> ^to be fair though, not the first time.  Many recall the Japanese-US deficit of the 80s and hope things will turn out the same.
> 
> Doubt it'll happen...


I lived in the states (Chicago) around late 1990's. The general impression I had was of a country that had peaked economically in the 1970's & was on the downhill roller-coaster of consuming past assets & infrastructure, without a decent replacement policy.

Most folks seemed to be living a little beyond their means. Thoroughly nice people, but seemed a little myopic about their true position in the world village.

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## Mid

pictures are more effective than words for me , though I enjoy reading what others have written ,

that said here's two cartoons .

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## watterinja

I understand the Chinese invest on average around 40&#37; of their earnings & are essentially fueling much of their current growth spurt, from savings.

The US seems to be the other way around, & has a heavy debt load.

How would the Yuan feature as a "hard currency"? 
Is an Asian Dollar a potential future possibility?

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## daveboy

I wish I had invested in gold 12 months ago  :Sad:

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## William

^^It's true, investment/deposit rates in China are high.  But did you know that Thailand had a higher investment/deposit rate in '06 than the US.

Now that is scary!

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## watterinja

^ That's amazing. 

Had no idea the US had slipped that much. That is really something.

Reminds me of the story:
Man takes a Chinese wife. Makes $ 5. Wife saves $2 upfront & manages the remaining $3 so well that she can save a fruther $1 of that.

Total $3 saved.

Man takes a Thai wife. Makes $ 5. Wife spends $6.

Total -$1 saved.

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## britmaveric

> I wouldn't invest in the dollar it won't be long before China floods the market with about a trillion dollars.


Biggest buyer in Chinese products is the yanks. They dump the $ - they are screwed just as much as the yanks are. 

Everyone forgets this is a world economy - septics go down the shite hole - everyone goes with them.  :lam:

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## daveboy

^
true but its coming

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## chinthee

> ^
> true but its coming


Seems impossible to believe.  The US is the biggest consumer of Chinese and all goods from anywhere.

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## Mid

> Originally Posted by daveboy
> 
> 
> I wouldn't invest in the dollar it won't be long before China floods the market with about a trillion dollars.
> 
> 
> Biggest buyer in Chinese products is the yanks. They dump the $ - they are screwed just as much as the yanks are. 
> 
> Everyone forgets this is a world economy - septics go down the shite hole - everyone goes with them.


sufficiency economy anybody ???

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## daveboy

China wants Taiwan and if the US keep blocking it there going to dump it.

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## britmaveric

Budding Junta-economics recommender???  :rofl:

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## britmaveric

> China wants Taiwan and if the US keep blocking it there going to dump it.


Won't do them much good. Septics then freeze all their bank accounts and property in septic land.  :Very Happy:

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## watterinja

> Originally Posted by daveboy
> 
> 
> I wouldn't invest in the dollar it won't be long before China floods the market with about a trillion dollars.
> 
> 
> Biggest buyer in Chinese products is the yanks. They dump the $ - they are screwed just as much as the yanks are. 
> 
> Everyone forgets this is a world economy - septics go down the shite hole - everyone goes with them.


How & where are the Chinese savings stored?

Are they all in USD-denominated instruments, or do they spread it around?

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## chinthee

^ You're right, they're mostly in US-denominated vehicles.  It's sort of like your largest vendor who is financing you to the hilt, and if you go bankrupt, he goes bankrupt.

At the same time the US is the biggest investor in private equity, venture capital and other direct investments in China.

Nope, the US and China are in bed together for a long time....

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## daveboy

> or do they spread it around?


They will probably invest big in Aussie land soon enough

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## watterinja

I know the Chinese have been investing heavily in Africa & have secured good working relationships where many others seem to fear to tread.

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## watterinja

> ^ You're right, they're mostly in US-denominated vehicles.  It's sort of like your largest vendor who is financing you to the hilt, and if you go bankrupt, he goes bankrupt.
> 
> At the same time the US is the biggest investor in private equity, venture capital and other direct investments in China.
> 
> Nope, the US and China are in bed together for a long time....


Surely there must be some internal 'friction' in this kind of scenario & it must wind down eventually.

Basically a perpetual-motion scenario. Can this last?

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## chinthee

> I know the Chinese have been investing heavily in Africa & have secured good working relationships where many others seem to fear to tread.


Yes, interestingly, they have identified a number of countries in Africa as a wasteland where they can be influential and create their own sphere of influence.  However, there are few strategic resources there.

They would be smarter to concentrate efforts in Azerbaijan, Kazakhstan, and Russian Far East.

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## watterinja

^ Perhaps they feel they can develop as their own Superpower?

During my travels through inner China, some years ago, I did find that the Chinese admired the Russians - based on their many years of shared Communist legacy.

It would make some sense for them to leverage that sentiment.

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## chinthee

^ I've spent my entire professional life doing business in both Russia and China.  The Chinese did admire the Russians under Mao and Deng.  Today, not so much.  They consider the Russians weak and exploitable.

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## watterinja

Why would they consider the Russians to be 'weak & exploitable'.

I'd love to hear more about your dealings in/with Russia & China. I've travelled extensively throughout China over a number of business trips & into Russia a few times - the last being a stay in Shadrinsk, Siberia at -30'C below. Loved the country - but considered them to be a pretty tough bunch.

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## chinthee

> Why would they consider the Russians to be 'weak & exploitable'.
> 
> I'd love to hear more about your dealings in/with Russia & China. I've travelled extensively throughout China over a number of business trips & into Russia a few times - the last being a stay in Shadrinsk, Siberia at -30'C below. Loved the country - but considered them to be a pretty tough bunch.


Spent years traveling and living through all those areas, Russian Far East, the Muslim Republics, North China, etc..  Can't discuss that on public forum, but if you get to BKK or Phuket glad to catch up for beers.

Cheers.

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## watterinja

Fascinating stuff.

I liked both places. Russians are, in my view, some of the best scientists & engineers around - their 'can do' approach & understanding of physics give them a tremendous depth.

Once they start leveraging this properly, then the US should take note.

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## chinthee

^ Agreed.  Chinese also.  Both countries have VAST human resources largely wasted by improper political systems.  China much less so today, and also Russia has turned, but have wasted so much.

PM me if you like to discuss further.

Regards,

Chin'T

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## watterinja

PM enroute...  :Smile:

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## Thormaturge

> Exchange rates, as with most things in life, depend largely on supply and demand. With the US's current spending in Iraq, they need to print more money than they have.


Printing more currency is what primarily causes inflation as you have the same assets but more paper, but the USA doesn't have an inflation problem and historically the US has lower interest rates and inflation than Europe, and this is still the case today.

What the USA is doing just now is borrowing huge amounts of money from the rest of the world. At present the USA is sucking in roughly two-thirds of the world's investment funds. As the Dollar falls in value American assets become ever more attractive to buy. It's the biggest and longest garage sale the world has ever seen.

When there is less emphasis on fighting overseas wars, and more on investing in the US economy, the Dollar should appreciate. After all it only takes a drop in the oil price for the UK economy to head South, taking Sterling with it and if the UK, a net contributor to the European exchequer, runs into recession, the Euro will be left funding a higher proportion of countries that are sucking money out of the exchequer. It is, however, the burden of social security programmes that will drag Europe backwards IMHO.

It is true that the Democrats have a good track record with the economy and I recall a certain Democrat President's famous words, "it's the economy, stupid". I would not be at all surprised to see Hilary name her husband as vice-President. For all his shortcomings he had a tremendous record with the economy.

Americans aren't dumb. Their country is sitting on huge oil reserves while they suck other countries dry. Mexico in particular, but even Saudi oil production is beginning to dry up, and the Chinese Yuan can only avoid being floated for so long. China's millstone is the enormous uneducated peasant population. It is a huge country but size isn't everything, and you need that huge population to be educated otherwise they won't contribute anything, but they will demand higher living standards as their country prospers. 
Just how long can China expect to trade with the West without becoming a democracy? Russia discovered you can't manage that trick forever as the people get sick of seeing foreigners with nice new cars, refrigerators, and televisions. What is China going to do with millions of peasants who all think they should have a Mercedes? 

I would, back India as having more chance of becoming the next global power to challenge America. A democracy with better educated people, a legal system that works and a population that speaks English with an established route into European and American markets through its membership of the Commonwealth. I'll even bet ThB 1,000 on it.

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## watterinja

^ Very interesting review, Tt.

What is your view on the effect of payback time of the US foreign debts? I means, they owe so much money that it would surely be a problem if their loans were re-called. How would they finance that?

I believe China's strength lies in its savings & the fact that credit is not encouraged. Many business folks I worked with were only allowed a Debit-style card - using their own cash - no borrowings.

India has a lot of very smart folks - very smart indeed. This knowledge could certainly be leveraged effectively. I wonder what savings levels they have? 

The US, in my view, has done well on the imported intellect that has graced their shores under the Green Card scheme. They imported the best brains from around the world at no upfront investment cost, leaving other countries to foot the education bill of non-available professional expertise. I wonder if this will continue, or if, as in China's case, many experts will return to their motherland.

I've always thought of Euroland at lethargic, & overtaxed, but intrinsically stable. The US is starting to look a little rough, in my view as they've let hight-technology slip out of their control into the rest of the world. I just wonder for how much longer they can play the bluffing game.

What are their intrinsic values & assets?

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## Thormaturge

A lot of the inward investment has been by way of foreign concerns buying up American owned businesses, leaving the money in the hands of Americans who, in turn, have purchased T-notes which have their own maturity dates. The question is whether the Treasury will need to replace these with higher interest bearing stocks in future or whether the cash will be there to repay them. Higher taxes are the answer there.

If any country on Earth has an inflation problem just now it is China. Their finance minister has recently resigned amid spiralling food prices. They can't feed themselves anymore as they have been building on the farmland that once fed their population. The government is now trying to promote the growth of potatoes in preference to rice in order to make more economic use of the remaining farmland.

When the Chinese have to buy their food from the USA and Europe they will be truly screwed.

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## sabang

The US dollar and economy finds itself in a trap of it's own making.

A vast net import economy, but most imports priced and paid for in USD- which causes little or no net weakness to the currency, as it normally should. The USD was way overvalued for several years before starting to fall, even while interest rates were being held low. It defied logic. Wealth transfer overseas, debt domestically.

An artificially low interest rate environment, encourages more borrowing and financial speculation. Speculative bubble ensues- sub prime mortgage the first to burst. Further massive net wealth loss.

Now the Fed is trapped- it has to keep interest rates low for a while, to prevent a severe recession. There may well be further bad news to come. Low rates further assist the downward trend of the dollar. Most US government T bond debt is now owned by foreigners anyway- in less than 7 years the worlds biggest creditor has become the worlds biggest debtor. But overseas creditors are losing faith in the USD- plus US consumption & imports need to fall.

The low dollar, and underlying depth of the US economy will see it pull through- it ain't Argentina. But heres my short to medium term prognosis- and I was in the investment business for 20 years.

1- There will have to be a recession. It can only be put off for a while. During this recession will likely be the turning point for the USD, because interest rates will have to rise based on pure market factors, or hello stagflation. The low dollar will ultimately mean inward net currency flows, but some of this will be financial assets at bargain prices (real estate debt bubble) rather than foreign direct investment in productive capacity, e.g. factories. Domestic consumption will be squeezed, which will at least rein in imports, but there will be pain.

2- The USD needs to go lower still. Trends last longer than you think- thats a maxim of the sage old investment adviser. It took too long for the USD to turn down, and now someones got to pay the piper. It is possible that there may be a short term crisis of confidence causing a dollar plunge, especially if import figures remain high, and exports static. There is always a lag before currency moves are reflected in trade figures anyway. If this happens, I'll be buying USD for the first time in five years.

Safest haven? Swiss Franc. Decent bet, short term? AUD, but risky. Best medium term bet? Yen. 
My own base currency plays are AUD & GBP. I'll soon be moving my AUD to SFR or EUR, + maybe some GBP.

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## sabang

> Expect $ to rise in 08. Good time to buy $.


Time will come, but too early- 'trends last longer than you think'. Listen to Buffet.  :Wink:

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## sabang

> ^ You're right, they're mostly in US-denominated vehicles. It's sort of like your largest vendor who is financing you to the hilt, and if you go bankrupt, he goes bankrupt.
> 
> At the same time the US is the biggest investor in private equity, venture capital and other direct investments in China.
> 
> Nope, the US and China are in bed together for a long time....


True- theres a recession coming in China too. With their massive pool of USD's, expect China to be a substantial inward investor to the US even during the coming recession.

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## Butterfly

The USD will probably rebound by the time hilllary get elected and the Chimp is gone.

That illegal senseless war is proving to be expensive for everybody, even those who didn't want to be in it.

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## watterinja

> A lot of the inward investment has been by way of foreign concerns buying up American owned businesses, leaving the money in the hands of Americans who, in turn, have purchased T-notes which have their own maturity dates. The question is whether the Treasury will need to replace these with higher interest bearing stocks in future or whether the cash will be there to repay them. Higher taxes are the answer there.


When I lived there (US), I was rather disappointed in the general infrastructure, which was literally falling apart. When I inquired what the reasons were, I was informed that years of lowish taxes had left insufficient funds to maintain & advance the infrastructure. 

Some of the oldest airplanes I've ever travelled in, were in the US. It really began to worry me as many of the smaller incidents, & some others, never seemed to have made it into the international press - at least, not to my knowledge. I had the impression of a time-bomb where folks were chasing the next rainbow to the pot-of-gold, but neglecting to maintain the road to ensure the gold could be reached for future generations.




> If any country on Earth has an inflation problem just now it is China. Their finance minister has recently resigned amid spiralling food prices. They can't feed themselves anymore as they have been building on the farmland that once fed their population. The government is now trying to promote the growth of potatoes in preference to rice in order to make more economic use of the remaining farmland.
> 
> When the Chinese have to buy their food from the USA and Europe they will be truly screwed.


I also noticed the lack of agricultural land on my travels through China. Every available piece of remaining land was farmed, even up the side of steep hills & mountains.

In 1976 odd, China did not have enough food to feed its people & this, combined with Nixon's policy of engagement, forced China to open up. I'd agree that the era of rapid industrial development has gobbled up lots of land & must be putting some level of pressure on their food supply. Interesting thoughts.

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## Thormaturge

Whatever America's inflation, China's is far worse.  Whatever problems America may have with infrastructure, China's is far worse.

China's biggest handicap is its Asian management ethos of  "Put things right after they have gone wrong".  Sorry I don't want to be taking my car/lawnmower/whatever back for repairs every month.

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## britmaveric

If you want to see a shite hole - go out of the major chinese cities and into the country side. Sad fact is the majority of chinese are in dire poverty. Too bloody many of them. This will be China's downfall.

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## chinthee

^ China is a miserable place to live.  Believe me, I've spent many years living and traveling widely there.  Todayt, it's polluted, traffic-jammed, and generally a mess.  Every Chinese dual passport Chinese business associate of mine keeps a condo there for business, but much prefers to live most of the year in the states or Europe.

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## watterinja

> Whatever America's inflation, China's is far worse.  Whatever problems America may have with infrastructure, China's is far worse.


In terms of inflation, would the vast reserves the Chinese have in their back pocket, perhaps allow them to manage their inflation issues better than the US, which seems to be currently mired in debt? For instance, the average Chinese is a saver, whereas the average US citizen has a negative savings record.

Surely, in this sense, the two scenarios would be different?




> China's biggest handicap is its Asian management ethos of  "Put things right after they have gone wrong".  Sorry I don't want to be taking my car/lawnmower/whatever back for repairs every month.


From what I saw, there was a vast expanse of humanity, but attention to detail was very poor (make it & get it out the door). This certainly reminds me of the US manufacturing ethos - certainly. This will be to China's eventual detriment. We have already seen some of this with the recent massive product recalls.

The Japanese were the only ones to believe the slogan ' Zero Defect' & to take it to heart - in previous years (as I remember). Apparently, with the emergence of the younger generation, this maxim is not strictly adhered to - unfortunately.

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## watterinja

> ^ China is a miserable place to live.  Believe me, I've spent many years living and traveling widely there.  Todayt, it's polluted, traffic-jammed, and generally a mess.  Every Chinese dual passport Chinese business associate of mine keeps a condo there for business, but much prefers to live most of the year in the states or Europe.


I'd agree with these comments.

Even in Shanghai, I found the air pollution to be way too heavy for my chest (athsma). This factor has put me off taking seriously job offers from that part of the world.

As for the rest of China, I feel very sorry for the folks forced to live in many of the massively-polluted regions. Sometimes it was almost impossible to breath - especially in Winter, under temperature-inversion conditions.

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## watterinja

A fair amount of movement since Friday.

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## watterinja

A 5-year span doesn't look pretty.

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## Thormaturge

I think it may be time for the Canadians to start worrying. the US and Canadian dollars have reached parity. Makes it easier to assimilate Canada that way.

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## chinthee

^ That's not as outlandish as you may think.  Maybe not politically, but economically.

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## watterinja

^ ^^ 

Canada + USA = North America   :Smile: 

Time to roll out the *NAD* (North American Dollar)





Go NAD, go...  :rofl:

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## britmaveric

The mexican peso would fk that idea up.  :rofl:

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## chinthee

Actually, I think Mexico would roll over and would easily become the 51st or 52nd state depending on when Canada joins.  :France:

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## britmaveric

if mexico became part of the yankland - that would be the end of the septics full stop.

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## chinthee

^ Nah, just throw all the small fish back into Venezuela.  :rofl:

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## watterinja

Well, I understand the US will become a Spanish-speaking nation somewhere around 2030.

Perhaps an economic grouping of US/Canada/Mexico would not altogether be a bad idea.

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## britmaveric

There is NAFTA.  :Smile:

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## chinthee

^^ Yup, that's my point.  I think it will happen, together with some other Latin American countries.

*Nafta is small potatoes.

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## watterinja

How would this arrangement stack up against Europe?

Population, spending power, purchasing power, investment opportunities etc.

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## chinthee

^Good point.  It would be larger especially if you could get Brazil and Argentina into some kind of buy-in.  I think the brave new world of the Americas will have some variant of this theme.

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## britmaveric

Well big difference besides Yanks and Canadians - rest of the america(s) aren't doing so well. (most of the people that is)

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## chinthee

> Well big difference besides Yanks and Canadians - rest of the america(s) aren't doing so well. (most of the people that is)


Yes, very true.  Brazil is an exception, a productive powerhouse.  Argentina is an on and off-again basketcase.  Mexico has tremendous potential.

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## watterinja

I have long wondered if the world would group itself into economic zones - something along the lines of:

Europe
Asia
Africa
North America
S/America
Arab nations

Not sure where Russia would fit in.

Merging N & portions of S America would be a very useful economic block.

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## watterinja

> Originally Posted by britmaveric
> 
> 
> Well big difference besides Yanks and Canadians - rest of the america(s) aren't doing so well. (most of the people that is)
> 
> 
> Yes, very true.  *Brazil is an exception, a productive powerhouse*.  Argentina is an on and off-again basketcase.  Mexico has tremendous potential.


I've never been to Brazil, but I remember watching a program about how a mayor with vision, turned a city from a dump into a wonderful, efficient, thriving, green modern city. This guy & his team were wunderbaar.

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## Bluecat

I'll answer the original question, no future for the US$.
Up to the next US elections at least... :Roll Eyes (Sarcastic):

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## chinthee

> I'll answer the original question, no future for the US$.
> Up to the next US elections at least...


Yes, you're right, back on topic.  I don't think many would disagree with you.

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## britmaveric

Nought to do with politics I'm afraid only the simple minded believe that - if dems get in, prepare for more of the same.  :Smile:

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## watterinja

What effect would the next elections have on the USD?

Would this be purely a 'feel good' thing?

What are the intrinsic drivers that could sustain a stronger USD? This is something they've had 5 years to do, so far & they've not got it right, yet.

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## chinthee

Federal Reserve Chairman change.

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## watterinja

^ Didn't do that under Clinton...  :Smile: 

I liked Greenspan - still do.

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## chinthee

^ Greenspan is an absolute legend of proportions only matched by Warren Buffet.

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## watterinja

Some interesting comments made by Greenspan recently. He seems to feel that the mud is busy hitting the fan in the US at the moment. Many would not agree.

I think he is amazingly astute in his observations. He gave the US market a level of confidence & steadiness.

I don't know much about Buffet, except that he is a philanthropist & very cunning investor.

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## chinthee

Both dudes are legends in their own time. Genius proportions.  I've made lots of money from listening to Buffet.

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## watterinja

Does he have a newsletter, or magazine folks can subscribe to?

I was watching him on his recent world trip. Seems like a nice fellow.

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## sabang

> ^ Greenspan is an absolute legend of proportions only matched by Warren Buffet.


I'm afraid both myself and Warren Buffet don't entirely agree.
The main reasons for the current USD slump & real estate bubble were his soft money policies.

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## watterinja

I always had the impression that Greenspan had acted in a way to stabilise US & world markets. It seems that he stretched that a little too far along the time trajectory.

As I see things, the problem may lie in getting US industry to bootstrap itself & begin manufacturing from home-base again - instead of moving their industry to any inexpensive manufacturing base they can find.

With each new offshore start comes a loss of technology & knowhow - empowering the other company to gain technology & become an eventual competitor.

How should Greenspan have done things differently?

What will/should his successor do?

----------


## chinthee

Home base manufacturing as a goal is useless and non-competitive today.  As an example, in high tech telecoms equipment, production of many elements had moved to Taiwan, and most US vendors contract with the Taiwanese to remain competitive.  Today, there is another radical shift of some components to India, thereby making even Taiwan too expensive.

----------


## watterinja

^ Now, how far will this migration go? Eventually into Africa?

All the while, home expertise becomes eroded & 'intrinsic capability' (knowledge capital) is eroded. There are pro's & con's to home-base versus offshore manufacturing, but, a company must not forget that they are actually training the offshore companies as their future competitors. In the end, what will the US have left in terms of intrinsic capability?

We used this 'training-model' model in South Africa, for instance.

I believe that this loss of knowledge capital & internal knowledge feedback loops is dangerous for a country's long-term capability. I wonder if this model is different in US versus Europe?

----------


## chinthee

Unfortunately for Africa, no.  India should be the last stop for awhile.  If you look at all the Chinese and Indian engineers that have been trained at US universities over the past 20 years, and combine that with the education happening in their own countries, it's easy to see why this century will belong to them.

----------


## watterinja

^ Now how does this all play out in terms of Yuan/Rupee/USD/Euro currency projections & strengths of China/India/US/Europe economies?

Where does Japan fit into this?

----------


## watterinja



----------


## barbaro

Watterinja,

I'm not economist, but if you're going to keep a currency for a while, I am *assuming* the Euro would be better.

Many in addition to Buffett, (including Jim Rogers, founder of the Quantum fund with Peter Lynch) have dumped their dollars.

I think the Euro will keep your balance where you want to be.

----------


## watterinja

^ Thanks, MM.

It's really beginning to look that way. For me, the USD had always been my 'safe haven' currency. It does seem odd to have to make the switch, but it looks to be the right one.

----------


## watterinja



----------


## watterinja

Keeps on climbing...

----------


## lom

Wow, you're getting a cent more today compared to a week ago. :Roll Eyes (Sarcastic):

----------


## chinthee

shit, shit, shit, shite, shite, shite, kee, kee, kee.

----------


## watterinja

It's moving reasonably quickly.

I've basically moved assets into the Euro camp for the next while. Transfer costs were covered within a short period. I think I caught things just in time - thankfully.

----------


## chinthee

> It's moving reasonably quickly.
> 
> I've basically moved assets into the Euro camp for the next while. Transfer costs were covered within a short period. I think I caught things just in time - thankfully.


Yeah, I agree I've covered, but I have a lot of recurring earnings generated in USD.  I'm properly f*cked.

----------


## watterinja

^ Same, same in terms of long-term consulting arrangements. US Folks wouldn't take too kindly with me increasing rates, or billing in Euro's.

All non-US bids may end up in Euro's for the next while.

----------


## chinthee

^Yup, but all my clients are American.  :Sad:   They don't pay in that weird Euro currency.

----------


## watterinja

^ Not easy - & they've always looked to be so solid.

How would you see longish-term investments (~4.5 year maturity) over the next while? I've had my eye on a USD, or GBP offering. The USD offering doesn't look too wise at this point. Not sure if the GBP will run near the Euro.

I've been on hold for a few weeks. Not quite sure when to move forward, or adopt a wait-&-see approach for a month, or so.

----------


## chinthee

Long term, gotta be bullish on the USD.  The fundamentals just don't favor Euros.  Short-Medium I'd be in Euro denominated.

This is a relatively short glitch.

----------


## watterinja

> Long term, gotta be bullish on the USD.  The fundamentals just don't favor Euros.  Short-Medium I'd be in Euro denominated.
> 
> This is a relatively short glitch.


What are the 'fundamentals' at work here?

I'm guessing the size of the US market & it's ability to engineer start-ups - with Eurozone perhaps a little sluggish & heavy social-security burden?

----------


## chinthee

> Originally Posted by chinthee
> 
> 
> Long term, gotta be bullish on the USD.  The fundamentals just don't favor Euros.  Short-Medium I'd be in Euro denominated.
> 
> This is a relatively short glitch.
> 
> 
> What are the 'fundamentals' at work here?
> ...


Yes, and health of the private equity and VC backed firms going to IPO, and the huge technological investments that have occured over the past 10 years.  Absolutely huge plays that will re-energize both NASDAQ and NYSE.

----------


## watterinja

^ That makes a lot of sense. It's something I've always seen the US as being good at - leveraging R&D and hi-tech start-ups.

I've always felt the Eurozone was still country-centric & misses the dynamic the US offers.

Very interesting.

----------


## chinthee

^ And most of the huge global plays that were funded out of the US have been in India and China and will pan out BIG time at IPO.  all tech plays.

----------


## watterinja

Now, given that, would it also make sense then, to consider China & India on the investment horizon?

----------


## chinthee

^Not so much.  Those plays will mostly go public on the US markets.  :Smile:

----------


## chinthee

> Now, given that, would it also make sense then, to consider China & India on the investment horizon?


* whoops.  Sorry, that doesn't apply to China.

----------


## watterinja

^ Fair comments. That would be a far safer place to play.

China always worries me - especially when it implodes. Communism has to go sometime.

India needs a long time to get itself sorted out.

Where would I be able to tap into information of this nature? Reliable magazines, good brokers?

----------


## chinthee

^ I follow the big PE and VC houses in the later stages of investment prior to IPO.  Most of those go to Nasdaq.  Lots of money to be made.  Maybe we should open a thread and get everybody rich on this board.  Nice goal.

----------


## watterinja

Do you have any recommendations in regards to PE & VC houses to track?






(Make everyone a packet & Thai bargirls can all retire  :Smile:

----------


## chinthee

^ Yeah, I'll do this tomorrow, I could do it now shorthand but it won't be complete.  Needless to say, Texas Pacific, Newbridge, and some other usual suspects will be on the list.  Also, some stealth VCs in Silicon Valley are holding monsters in their hand waiting to got to IPO.  :Smile:

----------


## watterinja

^ Thanks so much. I'd really appreciate your insights in this regard. You're very kind.

I'm a little new to this side of things & am very interested in researching the game.

----------


## sabang

> The US dollar and economy finds itself in a trap of it's own making.
> 
> A vast net import economy, but most imports priced and paid for in USD- which causes little or no net weakness to the currency, as it normally should. The USD was way overvalued for several years before starting to fall, even while interest rates were being held low. It defied logic. Wealth transfer overseas, debt domestically.
> 
> An artificially low interest rate environment, encourages more borrowing and financial speculation. Speculative bubble ensues- sub prime mortgage the first to burst. Further massive net wealth loss.
> 
> Now the Fed is trapped- it has to keep interest rates low for a while, to prevent a severe recession. There may well be further bad news to come. Low rates further assist the downward trend of the dollar. Most US government T bond debt is now owned by foreigners anyway- in less than 7 years the worlds biggest creditor has become the worlds biggest debtor. But overseas creditors are losing faith in the USD- plus US consumption & imports need to fall.
> 
> The low dollar, and underlying depth of the US economy will see it pull through- it ain't Argentina. But heres my short to medium term prognosis- and I was in the investment business for 20 years.
> ...


i hope you listened to me. I've made a shitload the last coupla weeks.  :Razz:  :Wink: 

Still hanging in with the AUD though, but I would not be buying it anymore.

----------


## chinthee

^ I agree with you Sabang.  Short term is gonna be carnage.  Long term is different.

----------


## watterinja

^^ & ^ Did try to listen...  :Smile: 

Please tell me again - a little more slowly - financial investment is not yet my strong point. Lots to learn.

----------


## watterinja

How long would you expect the downturn/recession/upswing cycle in the US to take?

What would keep the GBP & Euro strong if US imports are reduced?

Why the SFR? What are their fundamentals - except a history of stability? How long would you park there?

----------


## sabang

The US recession will be followed [or preceded] by a recession and asset price plunge in China. It might be nasty- if you have anything there, i advise you sell now.

50/50 chance of Euroland too, but milder. 

The whole world, except maybe Switzerland, operates on the basis of a big lie. This lie is that the USD is a safe haven currency, and that US government debt is the safest in the world. Not so, and never has been. I am afraid the soft money policies of the privately owned Fed have lined the pockets of bankers and such, but you are living with the consequences if you are a USD thinker, and they will get worse yet.

Hard to do if you are American, but don't hold more USD than you need to. It is a risky currency.

----------


## sabang

> How long would you expect the downturn/recession/upswing cycle in the US to take?
> 
> What would keep the GBP & Euro strong if US imports are reduced?
> 
> Why the SFR? What are their fundamentals - except a history of stability? How long would you park there?


1- No idea. It is a moving playing field.

2- Currency strength is a relative measure.

3- SFR is the nearest thing to a safe haven currency, because it is backed by real assets. You park there for as long as it takes to get a handle on what the ferk is going on. There will be bigger winners, but none less risky. If my most severe prognosis is correct (I hope not) you may see another period of negative interest rates on the SFR. This is about as reliable a buy signal as you can get.

----------


## watterinja

Thanks very much for that perspective, Sabang. I'm hearing you loud & clear for the US in the short to medium term.

I have real concerns about China for the next while - even though they have substantial savings. I see their economy as being too closely linked to the US.

What would keep the SFR strong? (You've answered above - thanks)

How would one reliably purchase SFR?
Why the buying signal on negative Swiss interest rates?

----------


## Spin

> US Folks wouldn't take too kindly with me increasing rates, or billing in Euro's


It is happening though.....

Bloomberg.com: News

----------


## chinthee

^ Chinese bourses are ready to burst.  A big bubble in Shanghai and others that will deflate, or rather pop soon.  Don't focus on some useless Swiss currency-linked instruments but on major trends.

----------


## watterinja

> ^ Chinese bourses are ready to burst.  A big bubble in Shanghai and others that will deflate, or rather pop soon.  Don't focus on some useless Swiss currency-linked instruments but on major trends.


Wouldn't the idea to park funds in SFR in the interim as the USD moves through the recessionary cycle, or until other markets become more clear - waiting for the USD's previous tech investments to begin to pull it out again?

In other words - riding the waves & moving the funds into appropriate parking places, at the right time between cycles?

----------


## sabang

If you are bullish on energy prices, the Norwegion Krone will make more if you prove to be correct.
The Yen may well do good too.
The UK economy is humming, it ain't such a bad bet.
Euroland is too diverse and complex- apart from the fact i think it's better than USD right now, dunno really.

SFR happens to be the safest.

----------


## watterinja

^ Could you recommend safe, reputable brokers (preferably UK-based) - who could assist me in moving some funds across to SFR, YEN etc? 

I'm covered for USD/Euro/GBP transfers through offshore bankers.

----------


## watterinja

> Originally Posted by watterinja
> 
> US Folks wouldn't take too kindly with me increasing rates, or billing in Euro's
> 
> 
> It is happening though.....
> 
> Bloomberg.com: News


Saw that...  :Smile: 

Good article, some nice commentaries...

----------


## sabang

Money brokers are a bunch of thieves. Tullett & Tokyo were the nearest thing to OK that I knew, but unless you are dealing with a lot of squid I would just negotiate with your bank.

----------


## watterinja

^ Sounds like wise advice. I'll sound my bank out & see what they can do. Many thanks.

----------


## John

> ^ Greenspan is an absolute legend of proportions only matched by Warren Buffet.


Buffett made a lot of money, Greenspan destroyed a lot of money. This with the massive bubble in the stock market, the massive housing bubble and with the massive devaluation of the USD. I guess his friends made a lot of money. But the rest even inluding countries believing in the USD got simply robbed. And so I would never compare Greenspan with Buffett. Buffett is a Genius, Greenspan the biggest financial chaos producer. Every housewife could do better I am afraid... Reducing the interest rate to 1 percent under the inflation rate - this is robbing already. To motivate the people to use this low interest rate to buy and buy on credit and afterwards wondering that they really did... Creating endless new slaves for the banks and this for many years. He did not know? Come on...

----------


## watterinja

I always understood Greenspan to be operating under the concept of the US as Banker of Last Resort. With this in mind, he did well during the 1997 Asian Crisis & collapse.

There are always reasons why US monetary policy moves the way it does & I'm not sure Greenspan could do much else, other than manage & smooth in what appeared to be best for the US at the time. The politicians made up for the rest of the blunders.

Bush's policies seem to have turned world opinion somewhat against the US & it is now being given less space to manipulate & control world markets than before.

I seem to feel that Greenspan & Buffet operate in different areas. Greenspan is a good analyst, Buffet is a good investor.

----------


## HermantheGerman

Great news! Flying to Thailand like me this November ?
1 EURO = 49 Baht
I'm paying the next round!  :Smile: 

       Euro 49.03650
*Date 07 Nov 2007  Time  10:42:51   Round   4
*
Welcome to KASIKORNBANK

----------


## watterinja

Welcome Herman... We'll take you up on your most kind offer...  :rofl:

----------


## John

> Greenspan is a good analyst


He did not (want to) see the Asian crisis and made it even worse - Thailand crashed based on his and the advice of his IMF friends completely. Only the internet boom at this time helped to bring markets back on track. He did not (want to) see the stock market bubble. He did not (want to) see the housing bubble. They were building new homes everywhere and the news were full of this...

Read about the housing bubble and his statements in "Alan Greenspan" at Wikipedia under:

"Greenspan and the housing bubble"

But should he have stopped all those bubbles? He did not (want to) see them for as long as possible. All the financial institutions made endless money with those bubbles as long as they were going on - but they knew there will be an end. And even now with the huge write offs they still made a lot more money with the credits than what they claim to have lost... And their write offs do not end the credit obligations of the people full in debts - you can lose your savings if you are above the FDIC amount and sadly not your debts... But they are crying and crying to enable the FED again to help them. Remember the payroll figures before the big cut in interest rates - a minus. And the big correction of this number afterwards to a big plus. Nobody asks questions... THEY are so poor and not their victims...

He took EVERY opportunity to make bad statements about the USD to bring it down. NEVER the Treasury did this (he always uses his well known statement...) nor Bush (even if he is happy with it). He went even so far to say that the USD will lose his reserve currency status triggering further endless losses. If this really happens USA will never recover. One of the first things will be the loss of the (mighty) army - the ships will rust in the harbors...and the planes rest in the desert. All this at a time when the biggest communist country China can replace the US more and more. What Greenspan did to USA the Americans might never forget. I hope that somebody wakes up there - forgetting his own greed and helping the country. Even if it does not fit to the law of a jungle ;-) And the law of the jungle is very sad - if some speculators can bring down whole economies to make their profit or even start wars... So I think the best way to make money in such times is to try to understand the laws of the jungle and not follow any logic in the sense what should be.

Perhaps I am wrong with the (want to) statements. But IN THIS CASE Greenspan is an even more sad story.

----------


## HermantheGerman

> ^ Chinese bourses are ready to burst.  A big bubble in Shanghai and others that will deflate, or rather pop soon.  Don't focus on some useless Swiss currency-linked instruments but on major trends.





You mean like that.

I used to own this stock!  :Smile: 
But I let go to soon!  :Sad: 





The red part is frightening!
*Euro hits record high vs dollar*


Tue Nov 6, 2007 10:42pm EST

By Masayuki Kitano
       TOKYO (Reuters) - The euro hit a record high against the dollar on Wednesday after a senior Chinese political figure said China should balance its foreign exchange reserves so that strong currencies such as the euro offset weakening currencies such as the dollar.
       The euro was also supported by lingering market expectations for the U.S. Federal Reserve to cut interest rates in December, and for the European Central Bank to keep euro zone interest rates steady for a while.
        The euro rocketed higher after a senior Chinese political figure commented on diversification of China's $1.43 trillion stockpile of foreign exchange reserves.
       "The comments gave the euro a push in the back," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo, adding that the euro's climb likely gained steam due to stop-loss buying.
       After reaching a new high, the euro quickly extended its gains to rise to a record high of $1.4666 on electronic trading platform EBS.
       It later trimmed some of its gains to stand at $1.4613 for a gain of around 0.4 percent on the day.
       "For instance, the euro is rising and the dollar is weakening, and we can achieve a better match of the two," Cheng Siwei, vice chairman of the Chinese People's Political and Consultative Conference, parliament's top advisory body, told a financial forum in Beijing on Wednesday. 
       But Cheng later said his comments should not be construed as suggesting that Beijing buy more euros. 
"I didn't mean we should buy more euros. What I mean is that we should take advantage of the strengthening euro to compensate for weakening currencies," Cheng told reporters without elaborating.
       COMMODITY CURRENCIES
       The dollar index, which measures the dollar's value against a basket of major currencies touched a record low of 75.503 (.DXY: Quote, Profile, Research).
       The dollar also fell to 114.33 yen, down from around 114.70 yen in late U.S. trading on Tuesday.
       U.S. federal funds futures pricing on Tuesday implied a roughly 65 percent chance of a Fed rate cut in December.
       The Australian dollar hit a 23-year high after the Reserve Bank of Australia raised rates by 25 basis points to an 11-year high of 6.75 percent and said inflation would likely be above its 2-3 percent comfort zone by the first quarter of 2008.
       Market players said the RBA's statement suggested the central bank may raise interest rates further and gave a boost to the Australian dollar, which climbed as high as $0.9375.
       "Moves in commodities and expectations for further rate rises are lending support to the Australian dollar," said a trader at a major Japanese brokerage house.
       The currencies of natural resource-rich countries such as Australia and Canada have gained from a rally in commodities that pushed gold to a 28-year high and U.S. crude oil futures to a record high on Wednesday.
Later this week, currency traders will turn their attention to rate decisions by the Bank of England and the European Central Bank, both of which are due on Thursday.
       The two are expected to hold rates steady, the BoE at 5.75 percent and the ECB at 4.0 percent.

Euro hits record high vs dollar | News | Hot Stocks | Reuters

----------


## Spin

> 1 EURO = 49 Baht


I see the pound at 70.57 also.

Unfortunatley for Thailands economy its the dollar that counts and thats slipped to 33.75 today from 34 a few days ago

----------


## John

> Originally Posted by HermantheGerman
> 
> 1 EURO = 49 Baht
> 
> 
> I see the pound at 70.57 also.
> 
> Unfortunatley for Thailands economy its the dollar that counts and thats slipped to 33.75 today from 34 a few days ago


Thailand refuses AT THE MOMENT to play the Greenspan-game to devalue the US currency. So the central bank kept the Baht from falling further - for some time. I guess it is waiting until other local currencies will fall as far as the Baht fell - like the MYR (Malaysian Ringit). But then the sky might be the limit...and the hell for the USD the end. ANY reason to go the other way? I am just kidding...of course not...the US is watching their final ???success???.

----------


## watterinja

^ Thailand will want to limit the slippage relative to the USD, mainly because it will bankrupt their export trade if it continues. I think they will have a tough time of it, though.

Interesting views on Greenspan, John. I had always thought of him in a more positive light, whereas the IMF & World Bank are not on my favourites list.

----------


## watterinja



----------


## HermantheGerman

> Great news! Flying to Thailand like me this November ?
> 1 EURO = 49 Baht
> I'm paying the next round! 
> 
>        Euro 49.03650
> *Date 07 Nov 2007  Time  10:42:51   Round   4
> *
> Welcome to KASIKORNBANK




EUR = 49.25025 Baht
*Date 09 Nov 2007  Time  16:58:57   Round   6

Are we going to hit 50 Baht this month? 


Maybe I'll buy you two beers watterinja 



*

----------


## watterinja

^ Yes!!!  :Smile:

----------


## William

^think so?  I think Thailand would love to see the days of the 25B to 1$ - to regain face?

----------


## watterinja

^ William, it seems like the EUR is doing pretty well against the USD. Thailand seems to be tied against the USD more strongly than the EUR & it seems that 1EUR = 50 THB is possible.

I think Thailand would be in its grave at 1 USD = THB 25 in the near future, given the hollowing out of their industry post 1997 Crisis. I have serious doubts Thailand would want to go that low too soon. 

No skin off my nose any way, as I'm not pegged long-term to Thailand.
In the short term, I can buy cheaper books from Amazon US.  :Smile:

----------


## chinthee

Exports to the US would completely dry up at 25:1.  They're already under severe pressure.  I suppose if Thailand can convert itself to a backroom supplier to finished products by Japan or China it might work, but it would be very harmful to Thailand to go to that kind of exchange rate.

----------


## watterinja

Looks like it's beginning to top out... for now.

Judging from Bernanke's report yesterday, the US is in a spot of trouble for the next few months.

----------


## A Traveller

Given how much of the USD position is viewed as having direct relationships to the Chinese position within the global financial community. Here's a few thoughts, any views, comments?

Chinese banks may shortly regain access to the U.S. market. Chinese banks have been _effectively_ banned from operating branches in the United States since 1991, but the Federal Reserve is reviewing applications from I.C.B.C. and China Merchants Bank to open branches in New York. China Merchants is better positioned for approval because it has operated without state support for years, which means that its operations are more transparent with demonstrable risk controls. 

Regulators in China are said to be waiting for Washington to approve access for Chinese banks in the United States before Beijing further loosens the rules regarding foreign banks operating in China. Because many U.S. banks are salivating at the growth potential of the Chinese market, it seems likely that China Merchants' application will be approved.

It appears that Chinese banks are positioning themselves to become major components within global financial markets. Presently flush with cash and having learnt from partnerships with Western firms in recent years. As a result, the I.C.B.C.-Standard Bank deal may prove the first of many similar deals, afterall it may not be long before I.C.B.C. is acting as matchmaker for a similar deal by a smaller Chinese bank.

If one takes a broader geopolitical perspective, this could be an important development. {See caveat below} It could mean that the world's financial engine then becomes even more distributed. It's to be noted that New York's and Tokyo's financial sectors have lost market share to London and Hong Kong over recent years. Whilst China's mainland financial sector is largely protected from foreign competition and its markets are limited to mainland investors, the growth of Chinese banks during the past few years indicates that Shanghai could compete on a global scale, _though there are questions about regulatory and transparency issues which will probably delay such an entry._ 

Equally concerning as these areas of competence is the, often forgotten reality that China's development remains a highly coupled system, within which many events could trigger an economic slowdown. While such financial fallout does not appear likely right now, there are many factors in play that could reverse this trend. Areas such as, rising inflation, the stock market bubble, environmental damage, social unrest, an ageing society, and a miscalculation over Taiwan, amongst others, all weigh on such developments. Overall the cash liquidity position of most Chinese banks should provide a measure of resilience to these events, but, in my view, their rise is not as inevitable as some would predict.

Regards

----------


## Norton

> Equally concerning as these areas of competence is the, often forgotten reality that China's development remains a highly coupled system, within which many events could trigger an economic slowdown.


From a layman's simple minded view of the situation regarding the weak US dollar, I pose this question to all here who clearly have a better grasp on global economics.

As mentioned by many, exports into the huge US market are major components of China, Japan, Europe and other economies.

*Would it be in the best interest of these countries to devalue their currencies to retain parity with the US dollar? *

----------


## Thormaturge

> Where would I be able to tap into information of this nature? Reliable magazines, good brokers?

----------


## watterinja

Traveller, an excellent review. Thanks very much for that.

The Chinese have done well as the bankers & traders of Asia. Take as an example their penetration into, & control of, many markets around S.E. Asia, & beyond. 

In Thailand, for instance, their penetration in the banking sphere is almost absolute, as I understand things.

I would have some major reservations, though, with their concept of honesty in regards to being honest custodians & protectors of their clients assets. As micro-lenders they excel - as many a broken kneecapped defaulter would/could attest. To act at the level of honesty expected as from a 'western-style' banker, may currently be beyond them. Only time will tell how much their culture of banking develops.

A major concern is what will happen when - not if - when Chinese Communism implodes. How would this severe lack of stability influence their position? The return to Three Kingdoms has always been a factor in the minds of many of the emerging intelligentsia I've met in business.

I'd hope that the US would be aware of the risks of Chinese penetration into their banking system & take measures to manage the entry & operation carefully.

----------


## watterinja

> Originally Posted by watterinja
> 
> 
> Where would I be able to tap into information of this nature? Reliable magazines, good brokers?


Thanks TM... I'd forgotten all about them.  :Smile:

----------


## A Traveller

As if the weakening dollar didnt have enough problems over the last week with new lows against the euro, speculation that the Chinese might shift their huge reserves away from the currency, and fears that the American economy is slowing there is pressure from an unexpected source. 

The supermodel Gisele Bündchen may no longer consider dollars fashionable. Ms. Bündchen, who once dated Leonardo DiCaprio and modelled for Victorias Secret, now wants to be paid in euros, according to a report on Monday from Bloomberg News. 

Her United States manager, Anne Nelson, quickly told CNBC that the report was false, but the story was enough to prompt an editorial in The Wall Street Journal and many more Web hits than currency fluctuations normally produce. 

Whatever the truth, theres no denying that the dollars descent has not been pretty for foreigners exporting their goods and services to the United States, even if they are supermodels.

Regards

----------


## Mid

err 'bout that $US ...............?

just declined against 10 of the 14 major currencies .

bbctv

----------


## watterinja

^ I'll update the chart in a few hours when the US Stock market opens. At the moment it's leveling off close to previous peaks, but after the weekend's Opec discussions, I'd like to see what the US markets themselves do.

----------


## John

It is a sad story what has been going on for the past years. Some media institutions do EVERYTHING to bring down the $. Also Greenspan made endless statements to bring it down going even so far of dreaming of the end of the $ as world currency!!! And even retired he still cannot stop with damaging remarks. By contrast NEVER Bush, Bernanke or any treasury made ever a negative comment - even if they seem to be happy with the falling $.

The Chinese premier said today he is worried about the falling value of their huge $ reserves - I can imagine... The oil countries are complaining about their falling purchasing power since their currencies are pegged to the $ and so on. Endless people and countries get robbed of their wealth.

Some people and media try everything to bring the $ down. This goes so far that for instance for the biased media a jobless rate in Germany of 13 % is no problem but one of 5 % in the USA is a big chaos and so on and on. They do everything to bring the $ down further. Simply read the reports of Reuters or Bloomberg. They create fear all the time. If they cannot find anybody making a negative statement then they will look for someone even if it is the bank director of a small bank And if this does not work a person familiar made a negative statement As long as this does not stop the downtrend will not stop.

Before the same media did this the other way round with reports about the US stock market  buy more and higher supported by endless so called stock analysts. Now this game seems to have moved to the currency markets and the stock analyst have been replaced by currency analysts...

I think the people behind those games are the biggest threat to this world and it would be time and more than worth the effort to uncover and deal with themsince they really create a worldwide problem with their endless greed.

----------


## watterinja

I wonder if some of the willingness to see the dollar's demise, has to do with the arrogance of the current US administration? 

I get the distinct feeling that many folks & heads-of-state have become more than a little tired of the blowhard arrogance of former years.

People are always looking for a safe haven for their investments. As the dollar's secure status begins to drop off, another will take its place. Before the USD as security, there was the Gold Standard.

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## watterinja

Euro & USD dancing around each other at the moment. Basically hovering around 1.465/6.

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## sabang

You seem to be blaming the media and financial institutions whereas if anything the opposite is the truth. They helped the bloody USD stay up for too long.
The USD stayed unrealistically high for far too long- I was saying this over three years ago, but it still went higher.
So that will just make it a bit worse now. I feel it has lower to go yet, it is very vulnerable to bad news- and bad news is coming.
If you want to get a sense of perspective look at long term currency charts, say 30 year periods.

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## watterinja



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## watterinja

> You seem to be blaming the media and financial institutions whereas if anything the opposite is the truth. They helped the bloody USD stay up for too long.
> The USD stayed unrealistically high for far too long- I was saying this over three years ago, but it still went higher.
> So that will just make it a bit worse now. I feel it has lower to go yet, it is very vulnerable to bad news- and bad news is coming.
> If you want to get a sense of perspective look at long term currency charts, say 30 year periods.


I'd tend to agree with your perspectives. The US financial media has been excellent at talking up their economy, greatness, dollar as safe haven & so on, & in the same breath, they've always come out on the winning side of major financial crises e.g. 1997 Asian crash.

With the current state of the US economy, there does not seem to be much more space to spin.

With oil closing on $100 per barrel, you'd think they'd consider driving smaller cars - somehow I doubt they'll seriously consider that - probably better to go off & invade Iran.

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## Mid

making me sick ,

to think it debuted at 80 odd cents ...................

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## John

I know the development of the USD in the last 30 years - it just went down. But there were different political situations.

But now I would really say - who needs the US and their currency??? Who needs the reporting of the economic data out of the US??? I would not invest in the US anymore. It seems to be crazy to buy any stocks or even the currency. So my question is really - do we need the reports of Reuters or Bloomberg??? We should focus on economies that will grow and not on dying economies. We have to accept that the US is a thing of the past like the Roman Empire. And nobody will miss the US with all the useless army. It is a poor country anyway - just spent 2 months there. Most of the people are poor and the infrastructure does not work and is breaking down. My brother in a very good location next to New York still needs his well and his generator sometimes because there is no power. The street lighting switches off at 8, the cellular network is a joke and so on... Ordered a shuttle to the airport for $ 200. It did not show up... Flights canceled... A rental truck that broke down after 7 miles... Could continue endless with chaos from there. Thailand seems to be more advanced... We really do not need the US or this currency. So let's focus on the Euro and Yen. They have a future.

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## chinthee

You might be interested in reading this article by the eminent former Ass't Secretary of the Treasury under Reagan, and the "father of Reaganomics," Paul Craig Roberts, whom we have been discussing today on several threads and forums.




> There is abundant evidence that the loss of confidence in the dollar is                          underway. When it is complete, the US will no longer be                          a superpower.
> 
>  The decline in American power and influence could be dramatic. Part of                          America’s power results from European countries going                          along with Washington. However, the sharp rise in the                          Euro’s value has hurt European exports, squeezing profit                          margins, wages, and encouraging offshore production.                          
> 
> Fights over monetary policy between European capitals                          could doom both the EU and the Euro, leaving the world                          with no reserve currency and America with embittered                          former allies.


VDARE.com: 11/01/07 - Hegemony’s Cost

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## watterinja

Would it perhaps be a good time to go back to a 'Gold Standard'?

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## chinthee

> Would it perhaps be a good time to go back to a 'Gold Standard'?


Well, Roberts is arguing not only with the USD be destroyed, but the Euro along with it, leaving no reserve currency.

This could be a coming crisis of huge proportions, though I don't want to think like that.




> By going to war for hegemony, the Bush Regime has brought about American                          decline. While the neocons have spent two                          administrations trying to deracinate Islam, real threats                          to America’s power have been neglected.                                                  Offshoring, which turns US GDP into imports and                          larger trade deficits, together with                                                  war debts, has eroded the                                                  dollar’s status as reserve currency, undermining the                          foundation of American power.

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## Zavier38

In the west, at least, perhaps we're not far off returning to a gold standard. Banks appear to be insolvent, and the only investment that appears to have value is commodities. What "wealth" exactly do USDs Eurs etc actually represent any more?
If TW mugabe is gonna nationalise the platinum mines in Rhodesia (known temporaily as zimbabwe) I'd put my money in platinum futures.

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## chinthee

As weird as it sounds I think Javier and watter are on to something.  Yes, maybe a return to Gold standard before everything goes to hell in a hand basket.

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## watterinja

The concept of a Gold Standard meant that Reserve Banks were forced to hold physical assets in gold, as a security. If things went haywire, then they could sell off from their gold assets & stabilise the situation.

Moving away from a fixed standard to a purely speculative instrument allowed the USD to step in as the defacto gold-standard equivalent. This all pre-supposed that the USD would remain steady & that the underlying fundamentals of the backing for the USD (US economy) would remain stable. In essence, the world was backing the stability of the US - the USD Standard.

Over a period of time, the US took advantage of their position of trust & essentially cowboyed & ran up huge debts - so intrinsically undervaluing the 'USD standard'.

The world is becoming wise to this, & seems to be moving away to another bastion of stability - hopefully, the EURO. Ironically, this 'Euro Standard' will probably end up going the same way as the USD, over time.

Moving back to a solid 'commodities-based standard' eg. gold, will help to stabilise what has now become understood as a highly nonlinear, possibly chaotic monetary system.

If anyone has dabbled in the underlying partial differential equations governing the futures market, for instance eg. the Black-Scholes equation - most would be horrified to find out that it is has some very non-linear components to it & can often be very unstable. I have actually run up simulations of this equation where I create waves within a controlled space. I'll bet Black & Scholes would hate to know this little caveat.

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## Marmite the Dog

> I think TD is ready for a business and economics thread


I think that's what this forum is for. Maybe we can change the forum title to something like "Business, finance & economics" and drop the Thailand bit? I'll put it to the man.

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## Marmite the Dog

> I liked Greenspan - still do.


I thought that it was Greenspan who failed in most things he did in the real world?

He 'handled' the Black Monday stock market crash, the stock market bubble burst in March 2000 (and the following recession) and is partly to blame for the current housing bubble in the US.

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## Thormaturge

> where I create waves within a controlled space.

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## mellow

If we could use cow and buffalo chips as currency, we would all be rich around here. Sorry, forgot dog turds.

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## Norton

> If we could use cow and buffalo chips as currency, we would all be rich around here. Sorry, forgot dog turds.


Yep and they could use chicken shite for change.

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## watterinja

> Originally Posted by watterinja
> 
> 
>  where I create waves within a controlled space.


Very good.   :Smile: 

The problem is when you begin aerating the surrounding fluid as the warm environment begins to heat the internal bodily fundamentals. Under this scenario, the outcome could be potentially catastrophic.

The end result can be no good for the USD, which ever end one chooses to view it from.

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## John

> Originally Posted by chinthee
> 
> I think TD is ready for a business and economics thread
> 
> 
> I think that's what this forum is for. Maybe we can change the forum title to something like "Business, finance & economics" and drop the Thailand bit? I'll put it to the man.


No, no. It is a problem with Thailand. I remember some time ago when I withdrew money from the ATM in Thailand using my US ATM card I had a limit of 20,000 Baht. The limit of the ATM card was not important because never in reach. Now I have to calculate that I do not exceed the $ 500 limit of the card because the 20,000 Baht limit is not important anymore because with the card limit never in reach. 

It is a problem here for us in Thailand :-) I never had this in the US. I always got my $ 500 ;-)

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