How 'bout that Euro ?

[Nick & LA]

Anyone else out there looking at a big boat purchase should note the the Euro has fallen 25% against the dollar in the last 2 years (most significantly in recent months) it is now down to 1.235. So the E375K boat I was gonna buy 2 years ago would have been $600K ($USD) and is now just $475K!
So the big question is will it continue to drop, if so for how long or to what point, or are we reaching the bottom? Whadda-u-think?

[stevensc]

It can change pretty fast. In July 2008 I sold my previous trawler to a guy in Sweden, the euro was very strong and the dollar weak then. He got a great deal even after taking shipping charges into account.
Steve

[slomotion]

Well, I' m not a currency trader and I have no idea. But, with Portugal, Spain, Ireland and especially Italy, in the mix, a lot depends on the EU's ability to demonstrate financial support for its member states. So, yes, the Euro could fall further vs. the USD. In the interim, anyone with USDs has a window of opportunity to acquire a boat priced in Euros at a relative bargain. When it first came out as a "virtual" currency, the Euro quickly fell to .80 USDs, circa 2000.

[speakeasy]

I've followed the chart of the dollar for a decade for trading. It appears to me, the chart technicals show a probability of it reaching 92ish in the near term, from the current 86.23. If it continues to strengthen, past that point, it's next resistance would be 102ish in 12-18 months or so.

It is still the safe haven for capital assets and the world is undergoing a collapse of a worldwide debt bubble caused by artificially low interest rates and massive fiat currency printing and the sociopaths running most Investment Banks. When debt is being paid down the dollar is in demand, and 18 mo. to 2 years seems about right for resolution of that bubble through pay-downs and defaults.

I've noticed over the years, that news often shows up to validate what the chart predicted. So yes, I think the dollar will continue to strengthen in the intermediate term.

[Adax]

I am not a specialist either but rumour has it that the Euro could fall further . Sarkozy said today France might consider pulling out of the Euro, if Germany did not decide to pull their weight. Very probably an empty threat but it adds to the instability of the Euro .

A stock market saying says "Noone ever went bankrupt taking a profit," . Applied to boats , if the price seems right to you,the boat is right then it might be the time to go for it and not regret it if the Euro drops further afterwards ,if you already had a discounted price .

Just my humble opinion ,not investment advice and most certainly not boat buying advice ....

[TaoJones]

The Euro is in trouble - no question. Relative to other major currencies, including the American dollar, it is sinking (losing value).There is now talk of a decline to parity with the dollar. In the event it even approaches that level, it is my opinion that it will cause the disintegration of the current constituency of the European Monetary Unit into (probably) a Northern Euro and a Southern Euro.

If such a re-configuration comes to pass, the Northern Euro (think Germany, France, Netherlands, Switzerland, etc.) will be, by far, the stronger. The countries of the Southern Euro (Italy, Spain, Portugal, Greece, etc.) will be the weaker. It is doubtful that there will be a complete break-up of the European Union.

While the American government may not have directly instigated the current financial upheaval in Europe, it is benefiting from it - for the simple reason that people have short memories, and attention is currently focused on Greece and its financial problems. But make no mistake, the giant American banks were actively planting the seeds of the Euro's destruction through the use of Credit Default Swaps and other derivatives.

Just because the unease with the Euro has caused an apparent appreciation in the American dollar, it is merely a case of the dollar being seen, currently, as "less ugly" than the Euro. If the Euro should come apart entirely (the constituent countries will return to their national currencies), the ugly cousins - the US dollar and the British pound) will be left exposed for the truly repulsive creatures they, and all fiat currencies, actually are.

When that happens, you will see first the pound, then the dollar, go through what the Euro is currently enduring. It will take exceptional timing to take advantage of this event. That is, if you want to buy a vessel priced in Euros, It will be best to wait as the Euro continues to sink and the $US continues to rise against it. Just before the Euro comes apart, make your purchase.

If you wait too long, and the exposed dollar resumes its decline (when people lose faith in fiat currencies, devaluation happens very quickly) the opportunity will quickly be lost. It may be possible that those holding $US will benefit from the fact that the disintegration of the British pound could very well presage the dollar's decline, but that is not assured, and they could go down together, or the dollar could lead.

What is happening is not the disintegration of the Euro so much as the disintegration of the fiat monetary system. The Euro is exposed due to the massive problems with Greek sovereign debt, but the "bail-out" of Greece should be seen for what it really is - a bail-out of Northern European banks. That is why the intended "shock and awe" of a trillion-dollar bail-out package was dismissed by the markets after only one day.

What is occurring is the dawning realization that fiat "money" is only paper and ink, computer digits, and hollow promises. More so than big financial institutions, it has always been countries that were regarded as "too big to fail." But with the onset of defaults on sovereign debt, as has already happened in Dubai and will probably happen in first Greece, then Portugal, Ireland, Spain, Italy, Great Bitiain and the United States, people begin to realize the fraudulent nature of fiat currencies. That will ultimately condemn every currency that is not tied-to / backed-by something of intrinsic value with no counter-party risk.

TaoJones

[speakeasy]

Tao, that's an excellent overview! I hadn't heard of the split into north/south euro zones before, but it makes some sense. Presumably, resource rich countries will fare far better in the coming fiat fiasco. Are you holding any gold or commodity stock, or what? How do you think you will play this? I used to think the big long trade would be precious and industrial metals until inflation hit the 20%+ range then roll into the T-bone and collect the income, but now I'm not sure hyper-inflation is a'comin'. It looks and feels more like Japan's deflationary spiral.

You are clearly a student, or perhaps master of finance.

[Mariness]

Originally Posted by TaoJones

What is occurring is the dawning realization that fiat "money" is only paper and ink, computer digits, and hollow promises.

What ever would William Jennings Bryan think?!
Bring on the silver!

[capt_douglas]

The seller will probably raise the Euro price to reflect the deflation or raise the minimum they'll take. Either way, I doubt you'll get a great deal - and the way the Euro's going, the rate may be back at "normal" before you can complete the transaction.

[vegasandre]

Originally Posted by capt_douglas

The seller will probably raise the Euro price to reflect the deflation or raise the minimum they'll take. Either way, I doubt you'll get a great deal - and the way the Euro's going, the rate may be back at "normal" before you can complete the transaction.

I doubt it seriously the seller will raise the price in euros just because the euro is falling. Cant seem to recall a time when US sellers raised their boat prices when the dollar was very weak. Just doesnt happen that way in most instances for this type of commodity.

If the Euro keeps falling expect to get some very good deals.

[Nick & LA]

I really appreciate all the feedback, most of which seems reasonable. Tao - thanks in particular for your detailed thoughts... while I too see the folly of the Fiat currency system, I highly doubt the major super powers can allow it to unravel in the foreseeable future. I suspect instead that we will see a swing toward conservative fiscal policies, spending and debt cuts, etc. to fuel growth and hope to inflate our way out of crushing debts... then the fallacy of the fiat system can roll on - at least for a decade or so... Or, if you (and Glen Beck) are right, maybe I should start storing gold "next to my lead"... Nick

[97fxdwg]

I'm still in shock from reading that France and Germany aren't getting along! Where did THAT come from?

[David_Old_Jersey]

Originally Posted by 97fxdwg

I'm still in shock from reading that France and Germany aren't getting along! Where did THAT come from?

LOL!

The Hungarians seem to be looking to expand their influence..........and have upset the neighbours................last time that didn't go well (and they are not even in the Euro ).

New law granting citizenship to ethnic Hungarians sparks row with Slovakia | Europe | Deutsche Welle | 26.05.2010

Europe is just one big happy family

[97fxdwg]

Originally Posted by David_Old_Jersey

LOL!

The Hungarians seem to be looking to expand their influence..........and have upset the neighbours................last time that didn't go well (and they are not even in the Euro ).

New law granting citizenship to ethnic Hungarians sparks row with Slovakia | Europe | Deutsche Welle | 26.05.2010

Europe is just one big happy family

Where's Neville Chamberlain when we need him? Never mind, that's another thread I'm sure.

[MarkJ]

If you want to talk about the Euro again...

Theres something interesting in todays financial news headlines:

Global Markets
Stocks rise on construction, factory data
Euro slides to 4-year low vs dollar on bad loan fears
Oil falls below $73 on Chinese and European data
Gold climbs above $1,225 on debt concerns

There seems to be little concern on the financial markets over other world problems.

Thats good news