What Will Happen to Boat Pricing when Euro Is Under Par to US$ ?

[TomandAnitas34]

Luck ? We'll need it ! Always remember that paper isn't money, it's currency. A gallon of gas still costs roughly $.25. It's just that you have to use a silver quarter to buy it ! The silver quarter is money, the $3.34 for a gallon, that's currency. A silver quarter, today, is worth $5.60, just for the silver.

[DJBrookster]

Was today a rather clever way of the US propping up the dollar? Have I missed the point?

[savoir]

Of course it was. That money going to the Euro banks isn't real. It's just more of Uncle Ben's funny money. Those US taxpayers are such nice generous folks.

That bank deal is just like this one

Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress - Bloomberg

[goboatingnow]

Originally Posted by Capt Phil

Great fun to cruise back through this thread and read the prognostications of some pretty bright and obviously well informed folks. Sitting here a couple of days after Thanksgiving and reading the European news about sovereign debt, the moves that the Brits are taking to safeguard their embassy personnel and citizens abroad, not if, but when, the Euro is replaced by individual country currencies and the improbability of Italy and Spain surviving within the Euro zone much past February makes me think that the Euro will make some attractive wallpaper within a year. The first crack will undoubtedly be Greece with the next weakest country to follow within months. Merkle and Sarkowsy will not be able to withstand the pressure to hold together a common currency with 23 disparate fiscal policies based on self preservation. The ECB, IMF and ESFS are paper tigers with little real political power to resolve the hugh issues facing the common market. There will be a monumental capital dislocation as the Euro disintegrates. My bet is there are are at least a couple of trillion D'marks already printed and sitting in a vault somewhere in the Bundestag... good luck to all of us. Capt Phil

Nah won't happen, Germans will capitulate and allow ECB to print money. The whole euro crises is a function of not having a functioning central bank for the Eurozone. It will be resolved and future political change will ensure that it will never happen again. Greece will just become the Tennessee of the Eurozone.

Dave

[Capt Phil]

Yep! The Fed, under their usual secret moves, propped up the Euro based on the well founded fear that to let it drift into oblivion would materially harm the US market. They were right, but to do so without Congressional oversight, is dishonest, illegal and violates the US Constitution. The 'feel good' outcome of a nearly 500 point increase in the Dow is a mirage. There is no question that the US markets would continue their downward slide to a more equitable value without some mechanism to deal with the hughly overvalued Euro. By providing this lifeline to Europe, the world has bought a couple of weeks for the EuroBankers to dither and whither but in the final analysis, Greece, Portugal and probably Italy and Spain need to be cut loose and if the Euro is to survive, have it reconstituted backed by healthy European economies. The fundamental problem is that the dilema is unsolvable without centralized fiscal control of all participating Euro countries. This would require the member countries giving up their control over their sovereign economies, not something they are rushing to do. My guess is the near term outcome will be either a hugh global devaluation or disappearance of the Euro and the corresponding devaluation of the US $ or a complete breakdown of financial institutions, banks, credit unions, brokerage houses and commodity markets. Not a pleasant prospect but after the storm, during which trade and barter will replace currencies, there will come a period of calm and a slow rebuilding of sovereign currencies based on realistic value. Good time to own a boat free and clear, have a trade you can barter for food or own a farm, unencumbered, grow your own veggies and remain armed to protect what is yours and your family. The future ain't pretty... Capt Phil

[goboatingnow]

Originally Posted by Capt Phil

Yep! The Fed, under their usual secret moves, propped up the Euro based on the well founded fear that to let it drift into oblivion would materially harm the US market. They were right, but to do so without Congressional oversight, is dishonest, illegal and violates the US Constitution. The 'feel good' outcome of a nearly 500 point increase in the Dow is a mirage.


.... Yabba yabba do. ( more survivalist stuff.........


food or own a farm, unencumbered, grow your own veggies and remain armed to protect what is yours and your family. The future ain't pretty... Capt Phil

I can see that not only politicians suffer from severe delusion.

Dave

[Capt Phil]

Dave, I've been delusional for years.. quite enjoy the experience... cheers, Capt Phil

[DJBrookster]

Originally Posted by Capt Phil

Yep! The Fed, under their usual secret moves, propped up the Euro based on the well founded fear that to let it drift into oblivion would materially harm the US market. They were right, but to do so without Congressional oversight, is dishonest, illegal and violates the US Constitution. The 'feel good' outcome of a nearly 500 point increase in the Dow is a mirage. There is no question that the US markets would continue their downward slide to a more equitable value without some mechanism to deal with the hughly overvalued Euro. By providing this lifeline to Europe, the world has bought a couple of weeks for the EuroBankers to dither and whither but in the final analysis, Greece, Portugal and probably Italy and Spain need to be cut loose and if the Euro is to survive, have it reconstituted backed by healthy European economies. The fundamental problem is that the dilema is unsolvable without centralized fiscal control of all participating Euro countries. This would require the member countries giving up their control over their sovereign economies, not something they are rushing to do. My guess is the near term outcome will be either a hugh global devaluation or disappearance of the Euro and the corresponding devaluation of the US $ or a complete breakdown of financial institutions, banks, credit unions, brokerage houses and commodity markets. Not a pleasant prospect but after the storm, during which trade and barter will replace currencies, there will come a period of calm and a slow rebuilding of sovereign currencies based on realistic value. Good time to own a boat free and clear, have a trade you can barter for food or own a farm, unencumbered, grow your own veggies and remain armed to protect what is yours and your family. The future ain't pretty... Capt Phil

Sorry Phil I think you miss the point. The US is actually secretly devaluing it's way out of it's own debt crisis under the guise of being the good guys! The PIGS will fall but the FED is naughty.

[MarkSF]

Personally I think the consequences of the collapse of the Euro are overstressed. I can't see why Americans in particular are worried. Britain and the US stand to benefit as they are owners of two trusted "refuge" currencies, as they have done ever since the Euro was invented.

It was portrayed as a disaster when Britain bombed out of the Exchange Rate Mechanism but in a year it was forgotten.

The benefit of the trading block to it's members is dubious too - I have seen it calculated as 1% of GDP.

Worst case I see is that Greece and Italy can't stay in the Euro. Big deal, they both re-invent their currencies, Germany will thrive because it will stop giving money to them. Maybe some financial chaos will ensue in the short term but in the end it really will not matter.

Don't forget that the entire Common Market / European Union was conceived by France and Germany as a way to ensure that a third European continental war can't happen. That was the key benefit presented, not an economic one.

Britain has done very nicely out of staying out of the whole thing (apart from the trading zone).

[goboatingnow]

You fundementally miss the issue. With the exchange rate mechanism you still retained your currencies. This is different. The UK bank hold in excess of 500 billion euros in debt from eurozone countries. Ireland alone owes 150 billion. They would default on that resulting in uk bank collapse.

Pound and the DM would appreciate driving the already expect recession in the UK deeper. Trade barriers would be erected that would effect the UK. Internally in the eurozone banks are also holding vast amounts of each others debt leading to domino collapses a complete drying up of credit and massive sovereign default.

No it will not be allowed to happen , Germany will allow ( or be forced) to allow ) the ECB to act as a lender of last resort. The 17 members will agree to tighter fiscal union and the UK will be left outside in the cold. This allows the ECB to begin quantative easing measures. The market cannot speculate against a currency that has limitless amounts of it. ( The US being a shining example !).

The Euro is in effect pegged to a sort of gold standard ( ie there is only so much of it in existence ) this is why it's value is quite high. QE would also cause the euro to loose some value which would benefit exports. It would allow countries some freedom to engage in stimulus measures to prevent an EU wide recession.

The laugh is that all this is solvable once the Germans get off their high horse. They either have to get into bed properly or get chucked out. They were always reluctant partners in the Euro and as a result hamstrung the ECB, so that the currency does not have a proper functioning central bank. This is the root cause of problem.

The Eurozone is significantly wealthier them the US and vastly so in respect of the UK ( to suggest sterling is a reserve currency is ridiculous ) hence on any respective merits it should not be in these current difficulties. They are a function of the rules that set the Euro up and these rules need changing and fast.

It's a very foolish person that wishes the Euro collapse. The tidal wave would certainly take out the UK and do damage all around the world. The massive appreciation of the DM would kill Germany. The resulting political fallout would more then likely kill the EU as no European country would let the Germans be party to anything again.

Dave

[Capt Phil]

Well put, Dave... Rightly or wrongly, I am inclined to see the end of the Euro within 6 months because of the political inability of the members of the ECM to agree forego their sovereign control. I hope I'm wrong but the levers are not in place to use force majuer to make things happen. It would take unheard of cooperation between member countries to agree to give up their internal fiscal controls and would be political suicide within each country to do so. It will take overt action and strong leadership to resolve the crisis, attributes that Europeans are not well known for. As the euro drops in relative value to other currencies, buying a boat over there could be a good deal. Cheers, Capt Phil

[David_Old_Jersey]

Originally Posted by goboatingnow

Nah won't happen, Germans will capitulate and allow ECB to print money. The whole euro crises is a function of not having a functioning central bank for the Eurozone. It will be resolved and future political change will ensure that it will never happen again. Greece will just become the Tennessee of the Eurozone.

Dave

Whilst I agree with you, the Germans are not so stupid to do that without nailing down 110% how the future Eurozone will operate in future (they have the broke countries over a barrel, so should be doable) - and with (automatic) penalties for those countries that carry on p#ssing money against the wall.

When there is a future crisis (there always is a next one ) if the market knows in advance that there is a possibility of a country getting kicked out of the Euro (with EU providing cash support for the transition to a new currency - as "Aid" (to keep the lights on) and maybe also some tents ) the market will price that in and be more confident about the Eurozone as a whole.

Personally (if was the German Chancellor) would have a plan in place for Germany to leave the Eurozone and create a new currency (something like the Euro Dollar or the Reichmark ).....and over time bring other countries in who are solvent and can prove it!

Originally Posted by MarkSF

Personally I think the consequences of the collapse of the Euro are overstressed. I can't see why Americans in particular are worried. Britain and the US stand to benefit as they are owners of two trusted "refuge" currencies, as they have done ever since the Euro was invented.

My take is that the US wants the Eurozone to print money - the idea being that the Dollar does not collapse in value against a major currency and they both depreciate together. Not sure if Britain is the owner of a trusted "refuge" currency - more case that no real choice apart from the US. Even if you get your money in devalued currency - at least you know it will come back. Still plenty of time for (another!) "Sterling crisis"......

Don't forget that the entire Common Market / European Union was conceived by France and Germany as a way to ensure that a third European continental war can't happen. That was the key benefit presented, not an economic one.

Britain has done very nicely out of staying out of the whole thing (apart from the trading zone).

Native Europeans are by nature rather warlike - A few years back I laughed about Donald Rumsfeld's suggestion that the Europeans should re-arm

........and i think "done very nicely" is putting it a bit strong (but certainly has allowed some "solutions" that a Eurozone member can only dream about - Currency depreciation, higher inflation........and printing money - there was a reason why the Italian LIRA had so many Zeros in it ).

[capcook]

Originally Posted by Hillbillylad

The Russians and Chinese are already wanting to buy oil in their own currency. That is what is keeping the US dollar alive just now as the global currency. Once that changes, dollars will be only fit for insulating the coach roof.

Not likely... the USD is still the tallest midget.... If you are the Saudi's or any developed market, you gonna trust your reserves to the Russian mafia or the Chinnese ? I don't think so... not until they have a proven track record of transparency and allowing their currencies to float and trade...

cheers

[goboatingnow]

Originally Posted by Capt Phil

Well put, Dave... Rightly or wrongly, I am inclined to see the end of the Euro within 6 months because of the political inability of the members of the ECM to agree forego their sovereign control. I hope I'm wrong but the levers are not in place to use force majuer to make things happen. It would take unheard of cooperation between member countries to agree to give up their internal fiscal controls and would be political suicide within each country to do so. It will take overt action and strong leadership to resolve the crisis, attributes that Europeans are not well known for. As the euro drops in relative value to other currencies, buying a boat over there could be a good deal. Cheers, Capt Phil

Sarkosey is preparing a big speech to be given in Toulon next week. It's to soften up French voters to that fact that in return for Eurobonds significant loss of fiscal sovereignty will be the price. I disagree with your view, the Eurozone countries do not want the euro to fail at any cost. They WILL agree to stringent fiscal oversight in return for the Germans removing the restrictions on the ECB. I believe the Eurozone will get closer together not drift apart. The only people that have to convinced are Germans, they hold the key.

The Euro is overvalued, that's for sure. It's damaging exports. Eurobond issues will help to trend it down as will now expected lower interest rates. it will not collapse., despite the wet dreams of Daily Torygraph readers.

Dave

[muskoka]

Euros, pounds, dollars. It's a competition to see who's the healthiest horse in in the glue factory.