[Tiara]

Originally posted by Cyker
I'm a bit confused here... see, I KNOW Pound Sterling is worth more than any other currency - ATM IIRC It's £1=$2=€1.5, so what is all that stuff about strongest currency? Or is it encompassing the whole thing as opposed to just the exchange rate?

Ofcourse it encompassing more then just the exchange rate The Dollar and the Euro are the two most widespread currencies around. The Pound is only used in England. I bet that if you ask some random Italian guy on the street if he wants 4 pounds he'll say "Wtf do I want 2 kilo's for?"

Anyway, I doubt they'll switch away from US$ - The disruption would be ridiculous.

You obviously don't know much about economy. If the dollar gets weaker, profits go down. If profits go down, corporations freak out and will eventually switch. And when one mega-corp decides to switch it will become a simple domino-effect because intercurrency trade is not prefferable.

And the Euro is a lame arse currency anyway

*rips Cyker a new one with Teh Axe for making a useless statement like that*

I don't think it's too bad that the Dollar is 'weak' - It just means their exports will be stronger than previously.

Dollar is weak -> export product become cheap -> less revenue
Dollar is weak -> more expensive import -> higher costs

It's also good for us Brits because we can import more stuff cheaper

That's true (though that still depends on tax and ****znit)

Gotta love having the highest-valued currency in the world

Actually, that's a double-edged sword you got there.

'course, our exports are now royally screwed...

Exactly

[Ace]

Originally posted by Tiara
Actually, IF Germany and France can work away their deficits and get their act together, Europe stands to be a very large economic powerhouse.

The utterly massive[/u] national treasury deficits of the US will turn them into a third rate economic power behind Europe and China in a decade or so unless they too get their act together. And the way it's going now, the deficit will be so huge, it won't be overcome for another 2 or 3 decades. In the beginning of this year the US budget office projected a $477 BILLION deficit. And the Bush administration isn't helping either.

Consequently, this deficit is the drive behind the rise of the Euro. If the US can't get their deficits under control in the next few years, the Dollar will lose it's place as the main international currency and you can say goodby to the global superpower of the US because without a decent economy, the US is no longer the greatest power in the world due to the inability to support it's own infrastructure.

The problem is that shrubs think that deficit spending is encouraging the economy, or at the very least it has no effect on the economy.

In reality blantant fiscal mismanagement is pinning down what is otherwise a versatile economy.

[Janos]

Doesn't the "strong euro + weak dollar" equation have some pretty serious consequenses on EU economy? I will now admit that my knowledge of economics is pretty close to nil, so please, educate me.

edit: I mean import economics, which are pretty important to most of EU countries.

[IceFire]

Yay for a budget surplus in Canada.  Our politicians aren't quite sure of the numbers but we've got one

Canadian dollar hasn't been this high for years...for a very long time.  Its ground breaking at the moment actually.

Still, a US economic shakeup would probably have a far reaching effect.

[WMCoolmon]

I know virtually nothing about economoics, and yet, when I hear about all this fun deficit spending I thought something like this might happen.

Sigh.

[Kamikaze]

Originally posted by Janos
Doesn't the "strong euro + weak dollar" equation have some pretty serious consequenses on EU economy? I will now admit that my knowledge of economics is pretty close to nil, so please, educate me.

edit: I mean import economics, which are pretty important to most of EU countries.

Yeah probably. I've read about Japanese economy but the situation should be similar with Europe.

Car companies (probably the biggest international business Japan has) like the strong dollar because when they do business and get profit in the US they get their profit in dollars. When you take these dollars over to Japan (exchange rate used to be in the 120s, now a scary 104 yen to 1 USD) you get even more profit from the exchange.

If the dollar gets too weak there's a point at which international business in the US gets less profit than selling cars locally in Japan and they lose profit from the exchange.

I think this will be good for European consumers though. More companies will want to do business in Europe. Even if international businesses based in Europe get hurt the increase in foreign business might make up for some of that...

Correct me if I'm wrong, it's been a while since I've read about economy

[Tiara]

Actually, while import inmto Europe will be more limited, the domestic economy would grow (as Kami said). All-in-all, while it does have some negative sides, the end result will be a far stronger European economy that will eventually forego the need to import from the US.

[Knight Templar]

Originally posted by Tiara
The utterly massive[/u] national treasury deficits of the US will turn them into a third rate economic power behind Europe and China in a decade or so unless they too get their act together. And the way it's going now, the deficit will be so huge, it won't be overcome for another 2 or 3 decades. In the beginning of this year the US budget office projected a $477 BILLION deficit. And the Bush administration isn't helping either.
 

... that's it?

[mitac]

Originally posted by Tiara
Actually, IF Germany and France can work away their deficits and get their act together

That's not likely to happen in the near future. Not with that teacher for language and history as financial minister...

[Grey Wolf]

The US Government is actually trying to force down the dollar to encourage exports or something....

[vyper]

Gordon Brown for control of EU finance

[Gank]

In case you havent noticed your countrys near recession. Browns not an ideal candidate.

[Kosh]

Originally posted by Liberator
The US needs to take serious measures to reduce trade deficits with her trading partners, stop over-spending the budget and cutback on programs of marginal benefit.

I think you're actually correct. Something that I don't think you or most other people realize is that the neo-cons are overspending on purpose, even during times when it is unneccesary.