Thread: USD vs Euro - the future?

Keeps on climbing...

Wow, you're getting a cent more today compared to a week ago.

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

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.

Originally Posted by 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.

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

^ 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.

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

^ 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.

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.

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?

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?

Originally Posted by watterinja

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?

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?

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.

^ 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.

^ 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.

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

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

Originally Posted by watterinja

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.

^ 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?

^ 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.

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






(Make everyone a packet & Thai bargirls can all retire

^ 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.

^ 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.

Originally Posted by 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.

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

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

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

^^ & ^ Did try to listen...

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

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?