FabSwingers.com forum: Exchange rates

By (user no longer on site) OP
over a year ago

Just having read the Finnish of the other thread about the euro/dollar/pound exchange rates.

I think there's a slight misconception on what gives it value and what lowers the value.

The actual amount of currency is critical, the less of it, the more it's worth, the more of it, the less, then there's interest rates bonds and trading fluctuations and trade deficits or trade surplus.

The euro has in effect been reduced in the actual amount of it, when you pay debt down which is what Europe in general has been doing you actually reduce the amount of physical currency as debt creates credit ie money!.

It's bond yields are shit but there no shitter than Japan's or ours.

It's trade deficit is average but it's seen as secure.

The problem it now faces is trying to increase trade with a high value currency, the more they pay the debt down the higher the value goes because in effect your burning cash every time you do it, less cash higher value.

If they start to increase the debt and lower the value of the euro which will be good for increasing their exports they face the prospect of a run on it as market people speculate on the debt paying ability of the southern members.

It's basically a rock and a hard place.... The best solution would be for Germany to stump up the extra debt and give it to the southern members... But there's zero chance of that happening!.

However to say "it's worth is x amount" more so it must be good is like applying home economics to national economics, it's quite frankly pointless

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By (user no longer on site)
over a year ago

Are you sure that's right? Are both the EU and USA not just printing currency, thus creating debt?

I might be wrong... I don't understand these things

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By *obka3Couple
over a year ago

bournemouth

"Are you sure that's right? Are both the EU and USA not just printing currency, thus creating debt?

I might be wrong... I don't understand these things "

I believe the eu is on a trillion euro print fest

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By (user no longer on site) OP
over a year ago

The dollar is the world reserve, all oil is traded in it, that means you have to buy dollars in Tunisia to sell your oil to Russia...80 million barrels of oil a day get created at 42 dollars a barrel, do the maths

Your always going to have an advantage?

Creating money through QE applies for value but then as were all doing QE it's negligible between them.

It only creates inflation if it actually gets in the publics hands where it would be spent and go on to create more money through the credit/debit arrangement... Therefore inflating the money supply.

The euro has the opposite problem of deflating the money supply through paying off debt.

It's like realising 20,000 tonnes of gold onto the market.... What do you think the price would do?.

Or let's say you bought 20,000 tonnes of gold and blasted it into space... Price go up or down?

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By (user no longer on site) OP
over a year ago

Another misconception about QE, there not printing "money", there printing bonds that are exchanged between a bank and your central bank, they are what's known as taking bad private debt from private banks and putting it in your name at the central bank.

It's the ultimate transfer of wealth they had all the money and even more debt.... Now they get to keep the money and you get the debt, you also get austerity to help pay for the debt!.

I would have been proud of that scam myself

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