Why is the european dollar kicking U.S. dollar's ass?

[2Thick]

Whats the exchange rate right now. And wouldn't a strong Euro result in more European purchases of American goods (i know nothing about economics, so don't attack me for my naiveness).

They would buy more US products but the dearth of investment will kill the economy.

 

[George Spellwin]

My understanding is that it is related to the federal budget deficit which has returned under Bush. We sell bonds to finance the budget deficit and since Americans' savings are insufficient to support our level of deficit spending, we need Euros (and Yen and other currencies) to finance our debt. As the magnitude of the federal budget deficit increases, my understanding is that we have to sell ever more bonds at ever cheaper prices to move them making the Euro more expensive relative to the dollar.

 

[chesty]

Maybe so, but we got the Bomb!

 

[George Spellwin]

Maybe so, but we got the Bomb!

Hey, I did not say the deficit was bad -- it can be good in some situations. What's really needed is more savings on the part of Americans.

 

[WarriorPL]

Hey, I did not say the deficit was bad -- it can be good in some situations. What's really needed is more savings on the part of Americans.

Americans and savings don't go well together.
In most cases, when they get a paycheck, they spend it right away. That's the mentality behind the typical American and everyone knows this.

Also, George, I was curious if you got my email?

 

[HumorMe]

Hey, I did not say the deficit was bad -- it can be good in some situations. What's really needed is more savings on the part of Americans.

That's the main problem. Americans can't save for shit. They are too caught up in keeping up with the Jones'.

 

[HULKSTER]

Hey, I did not say the deficit was bad -- it can be good in some situations. What's really needed is more savings on the part of Americans.

Also, if the federal government would stop taxing the hell out of Americans' incomes to pay for wasteful domestic/foreign programs/aid, Americans would be in much better financial shape.

 

[KAYNE]

Unprecedentedly and probably unrepeatably I just thought the exact same thing Kayne did.

Except I would have added "you dumb fuck."

EVENTUALLY, YOU'LL BE DOING IT AND WONT EVEN NOTICE IT.

I DIDNT WANT TO ADD ANYTHING DEROGATORY.....FOF IS PRETTY COOL.




KAYNE

 

[Zander1983]

My understanding is that it is related to the federal budget deficit which has returned under Bush. We sell bonds to finance the budget deficit and since Americans' savings are insufficient to support our level of deficit spending, we need Euros (and Yen and other currencies) to finance our debt. As the magnitude of the federal budget deficit increases, my understanding is that we have to sell ever more bonds at ever cheaper prices to move them making the Euro more expensive relative to the dollar.

As a foreigner, I was under the impression that America always returns massive budget deficits, Bush or no Bush?

Thankfully I'm doing macroeconomics next semester, because I've forgotten the basics governing currency prices!

 

[DcupSheepNipples]

As a foreigner, I was under the impression that America always returns massive budget deficits, Bush or no Bush?

Thankfully I'm doing macroeconomics next semester, because I've forgotten the basics governing currency prices!

Especially during times of war the US carries a huge budget deficit! Nothing new really! Most americans are not up to snuff about Econ. They can only relate to a short period of time! So the economy seems to be "Horrible" after the "Dot Com" boom, when in reality it is going through a typical "Cycle!"



A US Econ Timeline!