$ vs. Euro for purchase of French Cats

[yah mon]

Euro did some serious cliff diving today

[GoingWalkabout]

How low can the Euro to US Dollar cross go? The answer is a lot lower if historical pricing has any relevance. Of course getting to “a lot lower” may take some time and requires a special set of circumstances along the way. The EUR/USD is now at its lowest levels since 2003 and the trend looks to continue downward for the EUR – against the USD.

[GoingWalkabout]

The euro fell to $1.0839 in late-afternoon trading in New York, its lowest level against the dollar since Sept. 4, 2003. The euro recovered slightly to end the session down 1.7% at $1.0843 in its largest one-day decline in six weeks. WSJ.


Keep an eye on European politics for more downward pressure on the Euro. And its not just the Greek basket case that hasn't been settled but just pushed off for 3 months. Money Markets have not yet priced in the prospect of a nasty Spanish election cycle. The Spanish unemployment rate is currently 23.7% with GDP growing at just 0.7%. After years of suffering from sluggish growth, high unemployment and fiscal austerity agreed at the Eurozone level, the Spanish electorate is eying a far-left political party, Podemos, as a way to protest austerity. The downward slide has not stopped with in my opinion all indicators pointing to even a lower Euro to the Dollar. And yes I will be bold enough to say that the Euro is heading bellow the Dollar.... Good times ahead for US dollar buyers of French boats.

[sailingforfun]

Euro hits 1.0844

Foreign Exchange Rates & World Currencies - Bloomberg

[Dauntlessny]

Originally Posted by yah mon

Euro did some serious cliff diving today

and we'll be at par in less than a few months.

however, it is not clear to me how liquid the Euro boat market actually is.

From what I have seen in the last 5 years of looking at boats here and there, it does not seem that liquid to me.

Thus a motivated buyer like the PO can gain a 30% discount, but I'm not sure it will get the European boat market moving in any significant fashion.

The only light at the end of the tunnel is an oncoming train

[GoingWalkabout]

Originally Posted by Dauntlessny

and we'll be at par in less than a few months.

however, it is not clear to me how liquid the Euro boat market actually is.

From what I have seen in the last 5 years of looking at boats here and there, it does not seem that liquid to me.

Thus a motivated buyer like the PO can gain a 30% discount, but I'm not sure it will get the European boat market moving in any significant fashion.

The only light at the end of the tunnel is an oncoming train

As things become more desperate economically in Europe discretionary spending on toys will be impacted. That means less new boat orders from Euro customers and more used boat sales. Add to that the constant flow onto the market from charter companies and you have a perfect storm for decreases in prices in relation to the US dollar.

I feel sorry for those who bought on a charter programme expecting to get X at the end bit will now only get Y.

For those who are coming into the market to buy with US dollars now is a great time and I would think it will get even better over the next six months.

On the prediction front. I don't think it's going to take 6 months for the Dollar and Euro to be at par. I see that happening in weeks and by six months the Euro will be bellow the Dollar. The Euros Alice in wonderland value is done. Should have happened years ago.

[BelizeBound]

Originally Posted by Going Walkabout

As things become more desperate economically in Europe discretionary spending on toys will be impacted. That means less new boat orders from Euro customers and more used boat sales. Add to that the constant flow onto the market from charter companies and you have a perfect storm for decreases in prices in relation to the US dollar.

I feel sorry for those who bought on a charter programme expecting to get X at the end bit will now only get Y.

For those who are coming into the market to buy with US dollars now is a great time and I would think it will get even better over the next six months.

On the prediction front. I don't think it's going to take 6 months for the Dollar and Euro to be at par. I see that happening in weeks and by six months the Euro will be bellow the Dollar. The Euros Alice in wonderland value is done. Should have happened years ago.

Walkabout, Do you know a lot about the Charter Deals? My charter deal, when My Lagoon 400 S2 Finally arrives in BVI in 2 weeks, 45 days late, is that I own 55% of the vessel in a Joint LLC & paid $270,000 for an all options included Cat. The Charter company pays everything from Maintanence, replacement parts to insurance. I pay Nothing. She stays in charter for 5 years, where I get 12 weeks/ year use. 2 weeks in Prime Time, & I am allowed to sell 3 weeks of the remaining 10/ year as long as I don't use a 3rd party for advertisement. I own the Cat at the end of 5 years for $1.00. Personally I don't care if they Ever Charter it as it has no effect on me.. Have you had any experience with this scenario??
On Topic, I sure wish they had a 2 month strike in France, would have saved a Bundle lol......

[beauris]

Originally Posted by Going Walkabout

As things become more desperate economically in Europe discretionary spending on toys will be impacted. That means less new boat orders from Euro customers and more used boat sales. Add to that the constant flow onto the market from charter companies and you have a perfect storm for decreases in prices in relation to the US dollar.

I feel sorry for those who bought on a charter programme expecting to get X at the end bit will now only get Y.

For those who are coming into the market to buy with US dollars now is a great time and I would think it will get even better over the next six months.

On the prediction front. I don't think it's going to take 6 months for the Dollar and Euro to be at par. I see that happening in weeks and by six months the Euro will be bellow the Dollar. The Euros Alice in wonderland value is done. Should have happened years ago.

well there are always two sides to a coin... it might save the European boat industry as the USA is a very big market and we are becoming way more competitive...and my exports are really picking up in the US..in the long run it might pay for a more expensive boat..

[boatman61]

Then again... the EU may take up the American policy... if a US product like say Levi's sells for $20.00 RRP in the States it cannot be sold under £20.00 in the UK.. or there's legal action..
I'd approve of that...level the playing field..
http://www.dailymail.co.uk/news/arti...rt-battle.html

http://www.theguardian.com/uk/2001/apr/06/andrewosborn

[beauris]

that's another story...in my business you ll find high end product cheaper in the USA than around the production place...

the problem with tesco and cosco economic model it s that its ultimately deflationary ..at the end of the day it makes everyone poorer including the buyers...but thats another problem

back to your post...as can be read on both article nobody is sure of teh answer...it seems to be a brand policy more than a state policy no?

if it were a state policy wouldn t it go against americain interest by lowering sales output?

in other words it s actually the interest of european ( except maybe the germans) that the value of the euro drops against the dollar

and back to topic...yes it should be cheaper to buy european cats for you americans please come over and buy as many as you can ( new ones please as we need pre owned for us poor europeans)!!

[RKsailsolo]

Terribly interesting thread, following closely...

[GoingWalkabout]

Originally Posted by beauris

well there are always two sides to a coin... it might save the European boat industry as the USA is a very big market and we are becoming way more competitive...and my exports are really picking up in the US..in the long run it might pay for a more expensive boat..

If you are importing finished goods or manufacturing say in Asia and then importing you will benefit from a high relative US Dollar. This is basic economics. Given the dependance on overseas manufacturing inputs into the US economy then I would expect a significant increase in consumer spending power which will lead to actual higher spending. All good for a re-floating the US consumer driven market which for the last 40 years has been the economic engine room of the world. Add to this lower oil prices and you have the prospects for a consumer lead recovery that will have impact globally. All that would be needed in the near future for the to be a change in Washington with a decrease in corporate taxes to make the tax system competitive with the rest of the world and you will see boom times. What will be hurt will be manufacturers in the USA but then again they have been hurt by a sluggish economy for years and if more people have more money even they can benefit.

I see the ramifications for a stronger US dollar going way beyond me be able to purchase my next dream boat a lot cheaper

[GoingWalkabout]

Originally Posted by BelizeBound

Walkabout, Do you know a lot about the Charter Deals? My charter deal, when My Lagoon 400 S2 Finally arrives in BVI in 2 weeks, 45 days late, is that I own 55% of the vessel in a Joint LLC & paid $270,000 for an all options included Cat. The Charter company pays everything from Maintanence, replacement parts to insurance. I pay Nothing. She stays in charter for 5 years, where I get 12 weeks/ year use. 2 weeks in Prime Time, & I am allowed to sell 3 weeks of the remaining 10/ year as long as I don't use a 3rd party for advertisement. I own the Cat at the end of 5 years for $1.00. Personally I don't care if they Ever Charter it as it has no effect on me.. Have you had any experience with this scenario??
On Topic, I sure wish they had a 2 month strike in France, would have saved a Bundle lol......

HI BelizeBound. No I am not that familiar with the Charter deals out there. The one you detail sounds interesting and could be a good way for a person to end up owning their own boat within 5 years. As you point out it does have risks but so does everything. If you do your due diligence on the company you are getting into bed with it should help in minimizing your risk.

In the case you presented the exchange rate would be of little relevance if you intend to keep the boat. If however you wanted to sell it to get into a new or larger boat that is where you would have a problem. So I would be getting something that you would be happy with for say at least 10 years so you could at least get your pleasure/moneys worth out of your depreciated boat.

[rabbi]

Originally Posted by beauris

yep and bad for us European...afraid it will drive the prices of preowned upward

Unless you happen to own a boat which will likely increase in value.

[GoingWalkabout]

Originally Posted by rabbi

Unless you happen to own a boat which will likely increase in value.

Sorry guys to rain on your parade but if its a pre-owned Euro made boat than its coming down in price for US$ buyers. It will remain around the same price for those using Euros. The only caveat is that if the Euro zone goes into a recession from the high Euro no longer propping up unsustainable economies. You could see a lot more forced and fire sales of boats from the not so wealthy due to the lower Euro.

Bottom line is as it stands now US buyers are able to pay less of their dollars for a European new and pre-owned boat which will force down the preowned prices even in the US. If the Euro slides into harder times than you may even find more pr-owned boats forced onto the market.

Interesting times already upon us.