NationStates Jolt Archive

The US dollar has gotten a bad rap on NS, and understandibly so. It has been weakening relative to other currencies, and many wonder about its future role as the world's reserve currency. Yet I find "weakening" to be the wrong word. The dollar decline can also be labelled as "cheapening". And that's the appeal: it's cheap.
There is one other currency, as we know, that could rival the dollar, being the euro. The euro has appreciated a lot since a few years back, and it has been talked about as the new reserve currency. Yet for thhe foreseeable future, that won't happen for several reasons. For one, demand is just higher than the dollar relative to supply, hence the higher exchange rate of the euro. Yet the Eurozone economy is only about 3/4 of the US's, so hence, there are less euros around. The economy of the eurozone, while overall stagnant, is mixed. The big three economies are not growing, even in recession in Italy's case. Yet some economies, like Ireland and Spain, are booming. The ECB has an interest rate for both of them, pumping liquidity into the ones hurt by it, while stealing it from the ones that needed it, causing deflation in Germany. If that weren't enough, a lot of the euro's value is from speculators and exports. Speculators are leaving the euro, as we saw with the euro's drastic revaluation. Exports are dependent on the economy of the buyers, notably the US and China. If anything happens to either one, then exports will fall, and euros will fly overseas.
The best way to maintain the euro is gone. The Stability and Growth pact has been broken by the big three economies. Italy now has a deficit approaching a staggering 6% of GDP. So long as the economies of the US and China are humming, this is okay. When they stop, we'll see trouble with the euro thanks to irresponsible politicians. Don't you just hate those guys?
The dollar, on the other hand, has several benefits. The biggest is that it is the currency of the world's biggest single economy at $11 trillion, which is 20% of the world's GDP. It's growing at a rate around $700 bn a year, or half the size of the entire economy of Canada. Most importantly, it is an optimal currency zone. The eurozone tried to create one too quickly, and while it probably will happen, it won't be without pain. The US had two centuries to develop one, and while some areas of the US probably don't belong in the dollar zone, such as the rustbelt, most do.
Supply is also important. Despite this huge growth, there is an adequete growth in the money supply with only a little inflation. Surely, there is plenty of money for domestic use. Yet that slight inflation is important. The government has a bitter taste of deflation in its mouth, and does not wish it repeated. So, it prints extra. Because of the curent account deficit, the dollars get to be traded overseas.
Foreigners keep them for more reasons than just its inexpensiveness. As I said, it is backed by the largest economy in the world, and it is still growing. To keep a dollar is to keep an insurance policy. In addition, the dollar is what keeps the world afloat. While the US has a current account deficit, that allows for the export economies of Europe and Asia to exist, and also for the high savings rate. Even if a nation did try to convert all incoming dollars into local currencies, it would be too much, and may cause inflation. Several economies had to abandon their pegs during the Asian financial crisis because the dollar influx into their own currencies was just too great.
Could this all change? Definitly. The dollar could become unreliable if there ever is a recession. Besides, there are many factors beyond anyone's understanding that are happening in the capital markets. For example, while the Fed raises interest rates, lending rates in the US just continue to fall. But the dollar still accounts for 2/3 of all global reserves, and no wonder why. The US is a capital provider, and it props the world economy up. Besides, without the cheap dollar, the US economy would be in dire straits.
Thank you for reading my long, nightly rambling.

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Condense more. Paragraph properly. You'll get more people to read it that way.

Condense more. Paragraph properly. You'll get more people to read it that way.
I don’t know. I thought it was good. I just don’t have anything to say. He covered it all, besides the fact that the dollar looks cooler than the Euro :p and works with the Family Guy quote,

“It doesn’t matter whether your white or black. The only color that matters is green.”

I don’t know. I thought it was good. I just don’t have anything to say. He covered it all, besides the fact that the dollar looks cooler than the Euro :p and works with the Family Guy quote,

“It doesn’t matter whether your white or black. The only color that matters is green.”
I know I ramble. But everyone on here rambles, don't they? I read through it if it is good. I expect the same from everyone else.

http://www.economist.com/printedition/displayStory.cfm?Story_ID=4303416
It is as if a gift from Heaven came to me. It talks about capital markets and such, and talks about these imbalances I did.
Anyhow, it blames Asian central banks for helping to make the dollar more valuable than it is. I couldn't agree more. I don't think it'd decrease the dollar's utility in the long run, for capital markets would help to fix it. But the Asian central banks aren't allowing that. They want to see the US economy crash and burn, taking their economies with it.

I don’t know. I thought it was good. I just don’t have anything to say. He covered it all, besides the fact that the dollar looks cooler than the Euro :p and works with the Family Guy quote,

I find both quite aesthetically unappealing. The dollar is mediocre, and the Euro too impersonal. The Euro coins are just the opposite - I've collected a piece from every nation.

“It doesn’t matter whether your white or black. The only color that matters is green.”

The colour "blue" works in the quote, too.

I find both quite aesthetically unappealing. The dollar is mediocre, and the Euro too impersonal. The Euro coins are just the opposite - I've collected a piece from every nation.

Euro coins are fun to collect. The only bad part is that I have a coin that I don't know what country it came from.
BTW, the quarters are like that. The Mint is minting a limited run of quarters whose tail end is designed by each state. They are going in order of admission into the Union, and they look outstanding so far. They will be done with Hawaii by 2009.

Euro coins are fun to collect. The only bad part is that I have a coin that I don't know what country it came from.

Look it up here. (http://www.eurocoins.co.uk/)

BTW, the quarters are like that. The Mint is minting a limited run of quarters whose tail end is designed by each state. They are going in order of admission into the Union, and they look outstanding so far. They will be done with Hawaii by 2009.

You don't say. What are the motifs like?

You don't say. What are the motifs like?
Not much. They are designed by the state legislatures of each participating state. New York (the state I live in) used the Statue of Liberty juxtaposed with Niagra Falls, and the Canadian side of the falls, no less :) .

To Fass:
I just looked up the euro coins. A lot of the countries are very uncreative. The ones with monarchies seem to just put them on every coin. Italy, however, has some extremely good and creative designs. So does Greece. Germany does a little bit, but they are a little too bare for my tastes. In the meantime, Slovenia and Hungary hope to join the eurozone soon. I hope they come out with some more interesting ones.

Stop your dollar being so shit please, our strawberry exporters can't take advantage of thanksgiving anymore.


At least thats what they complained about last year.

To Fass:
I just looked up the euro coins. A lot of the countries are very uncreative. The ones with monarchies seem to just put them on every coin.

That has been a tradition for most of those countries throughout their existence. I find it charming, as they stay true to their history and don't abandon something just because the Euro came along.

Italy, however, has some extremely good and creative designs.

Theirs and Greece's are my favourite ones, because almost every coin is unique. Italy and Greece were freer in their choice as they're not monarchies and didn't have the same sorts of traditions as other countries. The "Rape of Europa" is the one I like the most.

That has been a tradition for most of those countries throughout their existence. I find it charming, as they stay true to their history and don't abandon something just because the Euro came along.
Yeah, but they're just so boring. If I were a graphic designer when the Euro first came around, I'd be known to those legislators as the bitchiest person in the gallery.


Theirs and Greece's are my favourite ones, because almost every coin is unique. Italy and Greece were freer in their choice as they're not monarchies and didn't have the same sorts of traditions as other countries.
Mine, too. I just realized that only a few eurozone countries are republics.

Stop your dollar being so shit please, our strawberry exporters can't take advantage of thanksgiving anymore.


At least thats what they complained about last year.
Ah, the beauty of the US dollar. Everyone is buying it, yet it's cheap enough for US exports. Still, the euro is quite expensive, yet it isn't hurting their exports one bit. Germany last year actually exported the most of any country. Wierd.

Oh come on, how do you beat this:
http://www.wealth4freedom.com/dollar_bill_great_seal.jpg

Greece and Italy may have creativity, but we get creepy point through the roof. :D

Oh come on, how do you beat this:
http://www.wealth4freedom.com/dollar_bill_great_seal.jpg

Greece and Italy may have creativity, but we get creepy point through the roof. :D
I've always wondered why they can't replace that. It almost makes me think that the US is run by the occult. Maybe I'm not far off the mark. That symbol is a Mason symbol, and many of our Founding Fathers were Masons. Now, they seem to be replaced by the Skull and Bones, anyhow.

Oh come on, how do you beat this:

http://upload.wikimedia.org/wikipedia/en/7/78/10ec_ita.png http://upload.wikimedia.org/wikipedia/en/9/9e/2e_gre.png

I'm sorry, but the creepy eye just simply does not beat the Birth of Venus or the Abduction of Europa. In creepiness, it's almost overshadowed by queen Beatrix of Holland.

http://upload.wikimedia.org/wikipedia/en/c/c5/1e_nl.png

http://upload.wikimedia.org/wikipedia/en/7/78/10ec_ita.png http://upload.wikimedia.org/wikipedia/en/9/9e/2e_gre.png

I'm sorry, but the creepy eye just simply does not beat the Birth of Venus or the Abduction of Europa. In creepiness, it's almost overshadowed by queen Beatrix of Holland.

http://upload.wikimedia.org/wikipedia/en/c/c5/1e_nl.png
God, she is creepy. Isn't she almost dead yet?

God, she is creepy. Isn't she almost dead yet?

http://www.hetek.hu/images/06.026/hit/eu.JPG

I think she's practically undead.

http://www.hetek.hu/images/06.026/hit/eu.JPG

I think she's practically undead.
Ew. Just looking at here. Oh well. Thank God monarchies don't really mattter anymore.

Now, anyone interested in talking currency? I don't mean aestetic value. I mean dollar versus euro, and maybe the friendly yen.
I also wanted to address the yen, as that seems to be a potential rival to the dollar. Japan is still the most dynamic and potent economy in Asia, and even has a very large trade surplus with China. Yet the yen, thanks to the government, is pure crap. Bond yields are among the lowest in the world, making the yen undesirable for investors. This is in spite of a public debt of 160% and a large public deficit. They are actually printing money in Japan, which causes some healthy inflation in Japan, yet devalues it further abroad.
In a world of fiat currency, a government cannot afford to be irresponsible. The government needs to find some fiscal responsibility. That was almost achieved with the near privatization of Japan's Post Office, which also serves as a state owned bank. Yet Junchiro Koizumi called elections to scare his party into submission. Perhaps we'll see something then.

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BTW, I hate to bash currencies. But I will bash some more to make people read :sniper: . Though really, the euro and the yen are probably the only two currencies that world capital markets could ever seriously operate on.

The only bad part is that I have a coin that I don't know what country it came from.
So, please tell me - where is it from?

Now, before anything else: I'm not an expert on how this whole economy/currency thing works, but I'll state this anyway:

Although I like the €uro (and there's no going back to the good ol' D-Mark) I must say that prices here for your everyday item have almost doubled after the introduction - and people wonder why the domestic market is sort of crippled and not picking up... The German exports are pretty much all that is keeping our economy running.

Low dollar means two things: Get less for your product while paying less for the raw materials. But that doesn't really help with rising oil prices and a stagnating domestic market -

The only good thing that I'd enjoy was a cheaper vacation in the U.S. - if I still considered the U.S. worth visiting (which I do not at the moment for various reasons).

So, please tell me - where is it from?

Now, before anything else: I'm not an expert on how this whole economy/currency thing works, but I'll state this anyway:

Although I like the €uro (and there's no going back to the good ol' D-Mark) I must say that prices here for your everyday item have almost doubled after the introduction - and people wonder why the domestic market is sort of crippled and not picking up... The German exports are pretty much all that is keeping our economy running.

Low dollar means two things: Get less for your product while paying less for the raw materials. But that doesn't really help with rising oil prices and a stagnating domestic market -

The only good thing that I'd enjoy was a cheaper vacation in the U.S. - if I still considered the U.S. worth visiting (which I do not at the moment for various reasons).
First off, I finally determiined that that was an Italian coin that I had. Secondly, I'm surprised that there was actually inflation in Germany. My reflex is that a lot of the euros came from old marks stuffed under mattresses, as I heard that it's more common to distrust banks there. But it can't be that much. I'd also think that there'd be deflation there, considering that the ECB's interest rate is much too high for Germany's underpreforming economy.
I also believe that there may be a chance of going back to the marks. Despite my rips against the euro, I find it an overall good currency, and it is just too new to be potent. But I'm afraid that the political will to keep it isn't there. The Stability and Growth Pact is gone, and in addition to the exodus of euros, the interest rates will be much too high. There is even talks of abandonning it in Italy.
Germany is in a unique position to revive it. It is the strongest economy in Europe, and also the slowest growing. I believe that political and structural reforms can get it going again, but they are much too slow and conservative under Schroeder. If Angela Merckel wins, I have faith that she can help the German economy actually get back into a business cycle, rather than this refusal to budge. If that happens, the euro probably won't collapse.

One more thing: I suppose that, like everyone else on here, you don't want to go to the US for political reasons. I tell everyone who travels the same thing: if you are worried about safety, know where your nation's nearest consulate is. I'm looking on the CIA World Factbook, and there is one in most of the major cities.