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Old 17-11-2011, 10:53   #1
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What Will Happen to Boat Pricing when Euro Is Under Par to US$ ?

Still looking to buy that Catamaran.
When looking at 2nd hand pricing - Ive noticed most are priced in Euros.

However It is my feeling that the Euro is basically done as we know it.

So when the Euro - Currently at 1.34-1.35 USD makes its eventually move to "destiny" to under 1.0USD (btw - this is a certainty)

what do you think will happen to the overall market pricing of used Cats and Monos?
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Old 17-11-2011, 11:28   #2
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

The ultimate fate of the Euro (or the dollar, or any other fiat paper currency, for that matter) will be identical to that of every other such scheme in the historical record - it will become utterly worthless. The number of fiat paper currencies that have survived the temptation to print more and more "money" in a futile attempt to create prosperity is exactly zero in all of human history.

The question you are really asking, I believe, is "What will be the asking price in dollars if the Euro:dollar cross goes below par?" The answer is that if a buyer must first convert his currency to that which the seller wishes to be paid in, it all depends on the exchange rate at the time of the conversion - if the Euro declines in relation to the dollar, it will take less dollars to buy the quantity of Euros the seller is asking for his vessel, and if the Euro appreciates in relation to the dollar, it will take more dollars to buy the quantity of Euros the seller is asking for his vessel.

If, as you suggest, the Euro moves below par with the dollar (it moved above par in 2002-2003 for the first time), it simply means a return to an advantage for those with dollars to spend. Keep in mind, however, the Europeans were forced to become masters of the Forex game when they all had different currencies, yet traded extensively with one another. So don't be surprised if they either ask for more Euros for their vessels, or change to a different currency (possibly US dollars) in stating their asking price.

In general, however, in the scenario you've laid out it will cost you less US dollars to buy a Euro-priced vessel, ceteris paribus.

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Old 17-11-2011, 12:01   #3
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Thanks so much for that great response TAO. You nailed it on the head.

Its going to be interesting how the next few weeks/months play out. Euro seems to be holding realtively strong compared to where it actually should be right now.

If all plays out according to plan I can probably purchase the cat I want (catana 47) for 200k + Usd cheaper 1 year from now.

thanks for your help on this.
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Old 17-11-2011, 12:04   #4
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Depends on whether the USD falls quicker........
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Old 17-11-2011, 12:12   #5
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

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Depends on whether the USD falls quicker........
Yes, this is correct . . . it just took DOJ fewer words to say it than it took me:
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... if a buyer must first convert his currency to that which the seller wishes to be paid in, it all depends on the exchange rate at the time of the conversion...


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Old 17-11-2011, 12:25   #6
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Supply and demand causes prices
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Old 17-11-2011, 12:45   #7
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

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Supply and demand causes prices

Yes , however it appears- at least to myself- that the Catamarans priced in Euro denomination (which are most) Have seemed to be somewhat artificially proppped up last few years based on Euro strength.


lets look at this listing : A catana 47 ocean class coming out of charter with dream yachts :
2006 Catana 47 Ocean Class Sail Boat For Sale - www.yachtworld.com


Listed at 395k EURO and 560k USD . My thinking is this time next year is this boat or similar will be about 380-400 usd based on USD/EU being at 1.00
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Old 17-11-2011, 13:15   #8
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

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... So when the Euro - Currently at 1.34-1.35 USD makes its eventually move to "destiny" to under 1.0USD (btw - this is a certainty)...
If you're this certain about the euro's fall, go to Forex.com and short the euro massively. Collect hundreds of thousands of dollars. Get catamaran for free.
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Old 17-11-2011, 13:42   #9
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Vegasandre,

I've done business in Europe and the US for the last 30 years (actually I spent 8 of them in lovely San Diego). I have seen everything in terms of exchange rate from (at that time it was still the old DM) 1 $ to 1,32 DM and 1 $ to 3,3 DM. The only thing I am sure of is that I never ever predicted correctly where it would go. So the two things to do were either hedging (buying contracts on a known exchange rate for future use) or offsetting by increasing the value of components priced in $ (for example electronic components) as close to the percentage of your $ based sales as possible.

I assume you know yourself that no currency ever "must" do something. Yes, we are in uncertain territory here with the Euro, but the likelihood of the Euro (or its equivalents) losing significantly in value is remote. What can happen is that weak countries are forced out of the Euro - but that won't get you great deals in itself, since for example a drastically devalued Greek Drachma will simply mean that the price in local currency will increase to come back to the "true value"; boats are hard assets, not paper.

That having been said, the economic hardship on one or more countries can cause boat owners to be a lot more willing than before to part with their property at lower prices - but it has nothing to do with currency and everything with individual financial hardship.

Have you heard on the other hand the predictions that the US will keep printing money to feed inflation so it can get rid of its debt in a rather elegant way? If your income/net worth is based in $, that will work against you internationally.

My advice? Be realistic. Prices won't drop to 50% in a year, or two. But you will be two years older. Pick a reasonable target and then try to get the best deal you can. And then live your dream...

Oliver
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Old 17-11-2011, 14:13   #10
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I've love to know what factors are convincing you the Euro will fall against the dollar !!! Even if Greece was forced or decided to drop out that would probably lead to the Euro rising. It's worth noting that despite the Euros current woes it has remained " strong" against the dollar. Which may really point to the weakness of the dollar.

If you're a forex genius, knock yourself out, otherwise just buy the boat and go sailing

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Old 17-11-2011, 15:02   #11
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Boat are hard assets and not currency. When a currency depreciates it does not mean the hard asset has less value. When currency depreciates it means more of that same currency is required to purchase that asset.

What someone is willing to pay for something ultimately determines value.
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Old 17-11-2011, 15:11   #12
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Regardless of the exchange rate (which does matter on a day to day basis), the decline of the Euro (I also believe that's coming vs the $) will lead to such major disruptions in the economies of both Europe AND the US, that few will be able to buy. This will happen because no bank will honor another bank's check (that was the fear in 2008 and is even more likely to happen now). It will also happen because the disruption in personal finances will force people to unload their possessions just to survive and the market will be flooded with 'stuff' that isn't necessary for day to day living.

Dire prediction but it's coming sooner than we can imagine.
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Old 17-11-2011, 15:25   #13
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Sooner or later economic reality will catch up with the EURO (and USD).

Fortunately for the Eurozone it has Germany and France (and even Italy ) - those countries still have a large scale wealth generation capacity as they didn't fully hop on the bus that said "send everything abroad to save a short term buck".

In the good old days when the economic pot got emptied the plebs got to refill it . Nowadays certain countries no longer have that capacity on the scale needed.

Britain on the other hand will need to work out a way to export haircuts.......
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Old 17-11-2011, 16:30   #14
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Quote:
Originally Posted by David_Old_Jersey
Sooner or later economic reality will catch up with the EURO (and USD).

Fortunately for the Eurozone it has Germany and France (and even Italy ) - those countries still have a large scale wealth generation capacity as they didn't fully hop on the bus that said "send everything abroad to save a short term buck".

In the good old days when the economic pot got emptied the plebs got to refill it . Nowadays certain countries no longer have that capacity on the scale needed.

Britain on the other hand will need to work out a way to export haircuts.......
All will happen is the Germans will be overrules the EcB will do quantise easing plenty money albeit with inflation and falling value. ( which is what the US and the UK is doing)
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Old 17-11-2011, 17:02   #15
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Re: What Will Happen to Boat Pricing when Euro Is Under Par to USD ?

Thanks for everyone's replys.

Much of it makes sense. I am currently pretty large long a 2x inverse Euro ultrashort ETF(EUO).This is pretty much a longer term way to short the euro without buying/seling the futures contract or forex. I found the forex and actual futures markets best left to traders who can handle the crazy interday moves on who said what or what the latest europeon rumour is.

As far as the euro- I think its toast-at least in its current form.

Interesting will be the effect on 2nd hand boat pricing. For instance when the euro rallied against the dollar these past 5 years- you didnt see the individual US boat sellers raise their pricing because the dollar was so weak. Most didnt even know or care too much about this. Basically 400k usd was 400k USD regardelss of what the euro,pound,yen ,franc was doing.

some here are suggesting that lets say a french individual who had to unload their Catana and was selling it for lets say- 400k EU. He was unable to selll it for a year. For arguments sake- lets say during that time the Euro was falling towards dollar parity. Many are saying here that he would now raise the price of the boat to match the falling rate of the EU to lets say 500k EU.

there is no way he would do that (new builders-maybe). So that 400k EU Catana 47 that would cost me 560kusd this year- right now -would in fact only cost me 400k usd next year with the exchange at even parity.
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