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Originally posted by Carlisia Campos:
Just as we are discussing the possible effects of tax cuts on job creation, I'm curious as to how the fall of the dollar can affect the level of unemployment.
In the last few weeks the Euro went from $1.10 to $1.15 dollars, and some say the trend is that it will continue to fall.
Does anyone have any insight?
Originally posted by Gus Mus:
It's not as easy as that ...
US goods will be cheaper for sure, but the companies and investor moves their assets from Dollar to EURO. No Investor .. no job
Originally posted by Don Liu:
what kind of assets are you talking about? real estate? investment is long term, do sell and buy house in different country just because the fluctuation of exchange rate?
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Originally posted by Gus Mus:
X Company has a lot of money, they did good business. So they put the profit into USD currency. Now Euro is stronger and the trend is going to it.. of course they are afraid if USD get lower thus they will have less money. So they convert their money into Euro.
Originally posted by Gus Mus:
Just imagine like this.
X Company has a lot of money, they did good business. So they put the profit into USD currency. Now Euro is stronger and the trend is going to it.. of course they are afraid if USD get lower thus they will have less money. So they convert their money into Euro.
The key point is people or company will really carefull to spend the money. They will wait and see and in the mean time they will convert their money / asset to take profit
M3 covers cash, overnight deposits, other short-term deposits, repurchase agreements, shares and units in money market funds and debt securities with a maturity of up to two years ).
Mozina said numerous U.S. corporations have reported higher earnings recently because the cheaper dollar made their goods more competitive in foreign markets.
Originally posted by Alexander Mark:
it might be dangerous if it fall to 50% - 100% and rush happends.
US doesn't have much deposit in gold, if the USD is undervalue then US debts will be very..very high, the government suddenly fall into bankruptcy
Originally posted by Alexander Mark:
Well... not all companies report the same. Think about companies in US who sell the goods from foreign countries.. they are in bad shape also.. thus might cut jobs.
US is still fine if the currency rate goes down by only 20% - 30%... just like Gus said, it might be dangerous if it fall to 50% - 100% and rush happends.
Is not possible ? well it is.. "it's all about politic", US is quite clever by colinizing Iraq to avoid this strong Euro (even they talk about bio-weapon, but everybody knows their dirty tricks).
If the currency falls to 50%, then I think it's not healthy anymore, of course to produce goods you have to have some resources which sometimes you buy from foreign countries. Panic situation will come, all investors might leaves USD, and it can brings to even worse conditions.. US doesn't have much deposit in gold, if the USD is undervalue then US debts will be very..very high, the government suddenly fall into bankruptcy - and jobless will increase dramatically. But hopefully this won't happend, thanks to Iraq.
On the other hand, European countries also have problem with strong EURO, but I think they have better change and conditions to solve the problem..
Well.. I might be wrong...
Originally posted by Alexander Mark:
1. The currency is used as "de facto" assets everywhere in the world.
...
In other word by using USD then other countries pays the debt from US....They are afraid EURO will dominate and thus they have to pay a really big number of their debt.
US already did some ways to avoid this, we know it already (for example by occupying Iraq).
Originally posted by Alexander Mark:
50% .. yes .. Anything can happend..
Indeed, the United States is indirectly aggravating Europe's misery, through the dollar, which has tumbled 26 percent against the euro in the last year.
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