Euro vs dollar, please explain?

[Taso]

I've heard a few things, and was hoping you people out there that are much smarter than me could explain.

1) The euro is stronger than the dollar - this is not neccesarily good or bad. Why? (this applies to other currencies as well)

2) The Euro is a bad currency, even though its stronger than the dollar, the dollar is just weak right now, but Euro = bad.

Any thing else you consider important regarding this (within reason)

Thanks

[Zygote]

[ QUOTE ]
I've heard a few things, and was hoping you people out there that are much smarter than me could explain.

1) The euro is stronger than the dollar - this is not neccesarily good or bad. Why? (this applies to other currencies as well)

2) The Euro is a bad currency, even though its stronger than the dollar, the dollar is just weak right now, but Euro = bad.

Any thing else you consider important regarding this (within reason)

Thanks

[/ QUOTE ]

read my answer in the inflation thread http://forumserver.twoplustwo.com/showfl...5#Post11508874. The euro benefits from almost all of it.

[tomdemaine]

Except I'm winning poker money that's in worthless f**king dollars. [img]/images/graemlins/frown.gif[/img] I'm losing a fortune if I keep my bankroll on a site.

[adios]

So get a loan to replace your bankroll, take your bankroll out and allocate it to something that beats inflation.

Or maybe the right derivitive to hedge the risk.

[tomdemaine]

So it's as simple as finding a loan in US dollars, then finding a financial instrument that consistently beats the interest charged on a loan made to a 22 year old poker player with no real credit history with a risk factor low enough to play with borrowed money. All that just to break even. If I could do that I'm pretty sure I wouldn't need to play poker at all.

[adios]

[ QUOTE ]
So it's as simple as finding a loan in US dollars, then finding a financial instrument that consistently beats the interest charged on a loan made to a 22 year old poker player with no real credit history with a risk factor low enough to play with borrowed money. All that just to break even. If I could do that I'm pretty sure I wouldn't need to play poker at all.

[/ QUOTE ]

You consider that a lot of things to do? So you're not doing better than beating inflation in the long playing poker? If you are and I wouldn't be surprised if you were beating poker for more than inflation, why not enhance your income? Really I don't consider this to be that difficult but maybe. One thing you could do without any problem is leverage your investments (i.e. use margin which means taking out a loan).

I think wanting to change the system is fine but not taking advantage of what the current system offers is stupid IMO. Sounds like you want the system to take care of you in at least one way [img]/images/graemlins/smile.gif[/img].

[Orlando Salazar]

[ QUOTE ]
[ QUOTE ]
I've heard a few things, and was hoping you people out there that are much smarter than me could explain.

1) The euro is stronger than the dollar - this is not neccesarily good or bad. Why? (this applies to other currencies as well)

2) The Euro is a bad currency, even though its stronger than the dollar, the dollar is just weak right now, but Euro = bad.

Any thing else you consider important regarding this (within reason)

Thanks

[/ QUOTE ]

read my answer in the inflation thread http://forumserver.twoplustwo.com/showfl...5#Post11508874. The euro benefits from almost all of it.

[/ QUOTE ]

Zyg, go back to econ class. You have much to learn. I was gonna type, but I don't have the time to write explaining investing, returns and wage/price inflation to you.

Basic EURO explaination: China has excess of low cost goods/labor. They tell us, you can take these cheap goods/labor now, and pay us in 30 years. OK, we say. Now we are in debt, have negative net worth, but still have cash that we don't have to part with for 30 years.

We don't need to buy anything else from China, cause they gave it to us. So, we want European goods/labor now. However, Europeans want to want to TRADE their EXCESS goods/labor for our EXCESS goods/labor. We don't have enough of what they want, but they have more of what we want (good chocolate, nice places to visit, cars). So, they say, eventually, you US guys will have something we want to trade for, so we'll hold your money (trade promise) until we find what we like.

After some years, Euros get increasingly tired of holding US money. They want to spend it but haven't found anything worth buying (Like having 1 million dollars to spend in a grocery store, theres only so much food you can buy). But the US still wants Euro goods/labor and will keep paying USDollars to them.

So euros have some choices, stop trading with the US because they aren't getting an equal share of what they are giving. OR, keep accumulating USD until they can: get better goods from US than they can produce (technonlogy), or till they have enough of a trade differential barter for really expensive things. Right now, they are accumulating USDollars. But since they don't want to buy anything here, our money is becoming increasingly less valuable to them.