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

[Kettlewell]

Predicting the future is a sure way to lose money--predicting the past is much more reliable.

[Doodles]

Originally Posted by David_Old_Jersey

So, how did that turn out then?

Hee hee ... and it wasn't even close! :-)

[TaoJones]

Originally Posted by Kettlewell

<snip>Another thing I should add is that just today I was looking at various versions of my own boat and the prices in Europe are double in some cases the prices here in North America, all quoted in US dollars. My boat was built in Europe and is evidently much more popular over there. In other words, there are very important factors that need to be considered in addition to the value of various currencies.

I don't really think you can compare the prices without factoring in the costs associated with VAT (and perhaps other things that inflate the asking price). Anyway, I doubt it's just a question of the popularity of a given brand of vessel in the two areas.

Originally Posted by David_Old_Jersey

Not only the thread that got resurrected! - welcome back . Parole?

Heh . . . thanks for noticing, DOJ. No, not parole - I was kinda busy and didn't really have anything interesting to add to the conversation, but it's nice to be back.

TaoJones

[vegasandre]

I am the one who started this thread awhile back. The Euro will eventually be at Parity to the us dollar. However a slight "delay" has developed with the current tournament of "who can kick the can the farthest". This tournament: with Japan having a 20 year headstart, followed closely by Bernanke and friends here in the US and in the last 12-18 months by our friends at the ECB- will eventually play itself out. The Euro was a terrific Idea -badly thought out. All the Eur countries -many of whom do not like each other- with greatly different ideals,traditions,history as well as "work ethics" and entitlements- can not work out in the long run.
Maybe the Cyprus events of this week will ignite the latest threat. Or maybe it will probably ignite further "Kick the can" discussions . Tme will only tell. But one thing for certain-The Euro in its present form-Is TOAST.
However TaoJones is correct -Playing and timing the markets for this event to happen -is probably not a worthwile venture. The Markets can remain irrational far longer than we can remain solvent.

Now where is that 45-50 ft Catamaran at fire sale pricing that I still need?

Originally Posted by TaoJones

I thought it would be interesting to resurrect this old thread to see what has actually occurred with the Euro:dollar cross over the course of the 14 1/2 months since the thread began. To briefly summarize what this thread is about, the OP was confident that the Euro would fall to parity with the US dollar, or even fall below par (at par, one dollar buys one euro).

His premise was that those holding US dollars (with which to purchase used sailing vessels priced in Euros) would see their funds "go further" - that is, a given quantity of dollars would buy a lot more boat in Europe in the wake of a collapse in the Euro:dollar exchange rate.

The thread was started on November 17, 2011. On that date, it took $1.34562 (one dollar, thirty-four and a half cents) to buy €1.00 (one Euro). In September of 2011, the Euro had crashed from ~$1.45 to ~$1.32 as the continent was undergoing stress related to the situation in Greece.

But by the end of October, the Euro had rallied back strongly to ~$1.4150, then began softening once again. As stated earlier, by the time the OP started this thread, it had fallen to $1.3456. The OP was quite confident that this marked the beginning of the end for the Euro, and he felt that he might save as much as $200,000 on a catamaran in Europe by waiting another year and allowing the anticipated Euro collapse to occur.

By the middle of January, 2012, the Euro had fallen to $1.2640, then rallied back to $1.34683 once again on February 27, 2012. In other words, three and a half months after the OP expressed his view that the Euro was collapsing to parity with the US dollar, the closing price was virtually identical to what it had been on November 17, 2011.

The tensions in Greece continued to impact the Euro adversely, however, and the Euro resumed its slide.

On July 25, 2012, it closed at $1.2064. The OP seemed to have been correct it his belief that the Euro was on its way to 1:1 parity with the US$.

The $1.2064 closing price on July 25, 2012 proved to be the low point of the move, however. From there, the Euro began an upward trend against the dollar that continues to the present. A couple of days ago, the Euro closed higher than it did on the day the OP began this thread in mid-November, 2011, and today it closed at $1.36492 (or about 2 cents higher than it was when this thread began.)

At post #8 in this thread, cormorant suggested to the OP that if he was so confident that the Euro was in the process of collapsing to, and through, parity with the US dollar, he should short the Euro in the ForEx market and he'd make a killing, essentially getting the catamaran of his dreams for free .

ForEx trading is not for the faint of heart . . . it takes knowledge, discipline, emotional detachment and exquisite timing to do it successfully and consistently.

Attached below is a two-year Euro:dollar chart with the dates mentioned above annotated. As I read the chart, I believe it shows the near-completion of a massive reverse head-and-shoulders formation that could set the base for a prolonged appreciation of the Euro against the $US.

(EDIT: Sorry . . . I just noticed that I mislabeled the low on the chart . . . it should read 25Jul2012. And the last date should read 01Feb2013.)

TaoJones

[Kettlewell]

It's hard to imagine that there won't be a bank run, at least in peripheral countries, if they go through with this scheme in Cyprus to rake off a cut of every depositor's savings in order to keep the banks solvent.

[savoir]

This coming week could get seriously ugly for the Euro. Cyprus is a popular holding place for hot money and so sees far more money pass through the system than the size of its economy might suggest.

A Tuesday run on the Cypriot banks is highly likely. You would also expect a lot of nervous people to transfer funds out of Spain and Italy into some non Euro currency.

[Kettlewell]

I read today that ATM machines are getting drained in Cyprus by people desperate to get their cash out of the banks. Not being particularly well-versed in what precipitated this in Cyprus it seems like a crazy way to try and stabilize the situation--more like throwing gasoline on a fire to put it out.

[sdowney717]

Greeks being parted with their money, so when is the war?

The European Central Bank, International Monetary Fund and Cyprus announced an immediate and surprise tax of 6.75% to 9.95% on savings accounts that will be withdrawn on Tuesday morning (Monday is a holiday in Cyprus). It should raise about 5.8 billion Euros or $7.5 billon. It seems the ECB and IMF have decided to take depositors money vs. restructuring debt so that Cyprus could qualify for a 10 billion Euro (about $13 billion) bailout.

Cyprus Surprise Savings Tax. Europe's Core Problems Back to the Front Burner. - Forbes

[atoll]

cyprus has for a long time been the little hidey hole for a lot of those 500 billion dollars the west and usa gave russia in the 90's for reconstruction after perestroika.

most of it went missing,a lot of it ended up in cyprus,the average cypriot does not have any thing near 100,000 euros in cash,this is a raid mostly on ill gotten gains from greek and russian obliarch's

[tropicalescape]

Originally Posted by sdowney717

Greeks being parted with their money, so when is the war?


Cyprus Surprise Savings Tax. Europe's Core Problems Back to the Front Burner. - Forbes

With this and all the fun and games coming out of NE Asia/China/Japan/DPRK/The PIs etc it shouldnt be long..

[Kettlewell]

From Bloomberg news:

The euro fell below $1.30, sliding as much as 1.5 percent to $1.2926 at 9:25 p.m. in Frankfurt. Anticipating gains in haven markets, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said on Twitter that the concern in Cyprus “moves risk-on trade to backseat.” He added: “Sell euro as well.”

[boatman61]

Originally Posted by Kettlewell

From Bloomberg news:

And I bet he recommended US$'s...
Divided and conquer..

[goboatingnow]

Originally Posted by atoll

cyprus has for a long time been the little hidey hole for a lot of those 500 billion dollars the west and usa gave russia in the 90's for reconstruction after perestroika.

most of it went missing,a lot of it ended up in cyprus,the average cypriot does not have any thing near 100,000 euros in cash,this is a raid mostly on ill gotten gains from greek and russian obliarch's

Correct , and its a storm in a tea cup.

Dave

[savoir]

Originally Posted by atoll

cyprus has for a long time been the little hidey hole for a lot of those 500 billion dollars the west and usa gave russia in the 90's for reconstruction after perestroika.

most of it went missing,a lot of it ended up in cyprus,the average cypriot does not have any thing near 100,000 euros in cash,this is a raid mostly on ill gotten gains from greek and russian obliarch's

Maybe you rushed through the stories on this. They are hitting everyone.

9.9% above 100,000 euro and 6.75% below.

[goboatingnow]

Originally Posted by savoir

Maybe you rushed through the stories on this. They are hitting everyone.

9.9% above 100,000 euro and 6.75% below.

Yes , but its mostly dodgy money , anyway blame the Germans they insisted on it. This is a storm in a teacup.

Dave