USD vs Euro 1 1

[Fenntucky Mike]

Anyone else enjoying that the Dollar is on par with the Euro? What's it been, 20 years since that was the case? I'm loving not having to pay an additional 10-20% due to the exchange rate. 

[zadok]

On 9/16/2022 at 5:34 AM, Fenntucky Mike said:

Anyone else enjoying that the Dollar is on par with the Euro? What's it been, 20 years since that was the case? I'm loving not having to pay an additional 10-20% due to the exchange rate. 

...yep in fact i just purchased a sizable quantity myself, never know when u mite need some...europe beckons....

[World Colonial]

Yes, I noticed.  If I were to buy it in quantity though, I'd also want to be able to obtain the benefit from the rising rates in those countries which isn't usually possible using US sources.  It requires buying locally.

The most likely currency I would buy is the Canadian dollar, because I might live there later in life at least part time.

[zadok]

On 9/16/2022 at 1:15 PM, World Colonial said:

Yes, I noticed.  If I were to buy it in quantity though, I'd also want to be able to obtain the benefit from the rising rates in those countries which isn't usually possible using US sources.  It requires buying locally.

The most likely currency I would buy is the Canadian dollar, because I might live there later in life at least part time.

...there r sources here where u can buy at par, no fees no exchange penalties etc...ive bought currency for maybe 20 countries when the rates r good,even though i mite never go there but my kids mite go, the canadian money hasnt made me any money but at least dont have to deal with buying it if already have it...most recently, one my kids traveled to UK i had bought few thousand pounds when it hits its low n prob saved over $1000 on that trip....

[Just Bob]

On 9/16/2022 at 10:55 AM, zadok said:

...yep in fact i just purchased a sizable quantity myself, never know when u mite need some...europe beckons....

Excuse my ignorance, but I have no idea how this works. Do you take physical possession of the currency, or is it done electronically?

[zadok]

On 9/16/2022 at 3:16 PM, Just Bob said:

Excuse my ignorance, but I have no idea how this works. Do you take physical possession of the currency, or is it done electronically?

...physical....i dont trust electronically....

[Just Bob]

On 9/16/2022 at 2:18 PM, zadok said:

...physical....i dont trust electronically....

So the only additional cost would be shipping?

[zadok]

On 9/16/2022 at 3:19 PM, Just Bob said:

So the only additional cost would be shipping?

...no shipping....perhaps discuss this by PM....

[VKurtB]

Larger U.S. banks in bigger towns offer foreign exchange at nice rates. 

[World Colonial]

On 9/16/2022 at 3:02 PM, zadok said:

...there r sources here where u can buy at par, no fees no exchange penalties etc...ive bought currency for maybe 20 countries when the rates r good,even though i mite never go there but my kids mite go, the canadian money hasnt made me any money but at least dont have to deal with buying it if already have it...most recently, one my kids traveled to UK i had bought few thousand pounds when it hits its low n prob saved over $1000 on that trip....

I have about 1000 CAD in currency notes that I brought back with me from my trips visiting my brother.

If buying in volume, I'd want to buy local government debt.  I haven't looked hard but haven't seen it as an option from a US financial institution.  I've owned the single currency ETFs in the past but those contain futures contracts and don't pay interest.  Now that CAD interest rates are finally noticeable, if I owned a meaningful amount, I'd buy CAD treasuries. 

Back in 2002, I asked my broker (Schwab) about it, but they told me the minimum amount was $10MM.  I don't have that much spare change lying around.

I'm only interested in holding in a Treasury Direct account equivalent and I have never read anywhere that any other country offers it.  I thought I read it for Canada once but haven't seen it since.

Edited September 16, 2022 by World Colonial

[Fenntucky Mike]

On 9/16/2022 at 11:55 AM, zadok said:

...yep in fact i just purchased a sizable quantity myself, never know when u mite need some...europe beckons....

My initial thoughts were geared more towards overseas auctions and sellers some of whom have not yet, or will not, adjust their buy now prices. Several banknotes and coins that were above what I wanted to pay are now more palatable and I've moved on some. A recent pick up from an auction in Greece for €300 was a bargain compared to when a similar item sold for the same price a year ago. There are deals to be had and it doesn't seem as though this level playing field is elevating auction prices in Europe. At least not in my areas of interest. Should have been more specific in my initial post but am pleasantly surprised with the direction it went, and now that you mentioned it my Euro stash has recently increased. 

[GoldFinger1969]

On 9/16/2022 at 5:34 AM, Fenntucky Mike said:

Anyone else enjoying that the Dollar is on par with the Euro? What's it been, 20 years since that was the case? I'm loving not having to pay an additional 10-20% due to the exchange rate. 

If the Euro implodes, or Italy has problems refinancing debt, then you're looking at a huge drop in financial assets in the U.S.

[zadok]

On 9/17/2022 at 11:27 AM, GoldFinger1969 said:

If the Euro implodes, or Italy has problems refinancing debt, then you're looking at a huge drop in financial assets in the U.S.

...wont the EU go to bat for italy like the bailout that greece received or was that the imf that supported them?....

[World Colonial]

On 9/17/2022 at 11:59 AM, zadok said:

...wont the EU go to bat for italy like the bailout that greece received or was that the imf that supported them?....

The ECB recently agreed to a modified form of QE where it will no longer expand its balance sheet but instead only buy the debts of weaker member states to keep spreads from "blowing out".

That's the plan anyway.

The reality?

It won't work for very long, as it creates the perverse incentive for states like Italy to expand their budgets infinitely.

This is another form of "can kicking".  My prediction continues to be that many (and maybe most) of the 19 member states will leave the common currency with the remainder creating a United States of Europe.

[zadok]

On 9/17/2022 at 5:00 PM, World Colonial said:

The ECB recently agreed to a modified form of QE where it will no longer expand its balance sheet but instead only buy the debts of weaker member states to keep spreads from "blowing out".

That's the plan anyway.

The reality?

It won't work for very long, as it creates the perverse incentive for states like Italy to expand their budgets infinitely.

This is another form of "can kicking".  My prediction continues to be that many (and maybe most) of the 19 member states will leave the common currency with the remainder creating a United States of Europe.

...in what time frame?....

[World Colonial]

On 9/17/2022 at 7:31 PM, zadok said:

...in what time frame?....

It depends if the asset mania is over as I believe.  (The one which most don't think exists.)

If the credit cycle from 1981 ended in 2020 which I believe it did, interest rates are destined to "blow out" later this decade.  If the ECB persists, then Euro will be at risk of crashing.

Eurozone fundamentals are bad, worse than the US.  I expect this new policy to be abandoned before the decade is over.

[GoldFinger1969]

On 9/17/2022 at 11:59 AM, zadok said:

...wont the EU go to bat for italy like the bailout that greece received or was that the imf that supported them?....

It was the EU but it won't matter.....ever give a little kid a piggy-back ride when they got tired walking at an amusement park or botanical garden or shopping excursion ?

Now....ever give another adult who was tired a piggy-back ride ? 

Italy is 8X the size of Greece by GDP and is the LARGEST debt issuer in the EU.  Last time, 7% was the red line for the 10-year Italian bond.  Italy is just above 4%...a big rise from a few months ago, and a year ago, but still way below that 7% implosion level.

https://www.bloomberg.com/markets/rates-bonds

 

Edited September 19, 2022 by GoldFinger1969

[GoldFinger1969]

On 9/17/2022 at 5:00 PM, World Colonial said:

The ECB recently agreed to a modified form of QE where it will no longer expand its balance sheet but instead only buy the debts of weaker member states to keep spreads from "blowing out".  That's the plan anyway. The reality? 

It won't work for very long, as it creates the perverse incentive for states like Italy to expand their budgets infinitely.

This is another form of "can kicking".  My prediction continues to be that many (and maybe most) of the 19 member states will leave the common currency with the remainder creating a United States of Europe.

Not likely but we'll see.

If you want to track the BEST global financial columnist and a guy with his pulse on the EU and Euro like nobody else I have read, get a subscription to the UK Telegraph and read Ambrose Evans-Pritchard's columns.  He's brilliant talking about the EU, the Fed, Green energy, OPEC and oil, politics, etc.

Only reason I subscribe to the UKT although their coverage of the Queen was also outstanding and good reading. 

[GoldFinger1969]

On 9/17/2022 at 7:31 PM, zadok said:

...in what time frame?....

That's the key.  Greece's goose was cooked when they went Socialist in 1981.  Took 30 years to implode...a small, tourist-driven, 3rd-rate economy and financial center.

Top 10 countries with global central banks and other levers have much much stronger defenses against financial contagion.

[World Colonial]

On 9/19/2022 at 1:21 AM, GoldFinger1969 said:

Not likely but we'll see.

If you want to track the BEST global financial columnist and a guy with his pulse on the EU and Euro like nobody else I have read, get a subscription to the UK Telegraph and read Ambrose Evans-Pritchard's columns.  He's brilliant talking about the EU, the Fed, Green energy, OPEC and oil, politics, etc.

Only reason I subscribe to the UKT although their coverage of the Queen was also outstanding and good reading. 

I know who he is, an establishment apologist.  I've read his commentary and like him, but he's pro-EU in everything of his I have ever read.

When I said rates will "blow out" later, I wasn't just referring to Italian debt or the weaker member states.  I'm referring to (practically) everywhere and this includes the US too.  No one wants to hear this because it's contrary to their personal preference.

When rates blow out in countries like Germany, what's the ECB going to do then?

It's one thing for these gimmicks to work when rates are low in the Eurozone "core" and the problem is contained to the "periphery".  It's another entirely when rates "blow out" everywhere.

There aren't any "wizards behind the curtain" at the ECB any more than there are at the FRB.

[World Colonial]

On 9/19/2022 at 1:23 AM, GoldFinger1969 said:

That's the key.  Greece's goose was cooked when they went Socialist in 1981.  Took 30 years to implode...a small, tourist-driven, 3rd-rate economy and financial center.

Top 10 countries with global central banks and other levers have much much stronger defenses against financial contagion.

Given the actual fundamentals which are much worse than you will ever admit, it can happen a lot faster than you think with a change in sentiment.

Yes, the countries to which you refer have wealthier economies to mismanage but ultimately since all financial values are psychological and not the result of any fundamentals, a change in sentiment is more than sufficient to "blow up" the Eurozone.  

Look at the Swiss National Bank.  In 2011, they pegged the CHF to the Euro at 1.20.  Considering they were attempting to suppress the value of their national currency where they control the supply, if any price manipulation should have worked "forever", this should have been it.

They capitulated anyway.  I don't need to explain why they gave up the peg, the fact is they abandoned it.

This subject is no different, despite that I know that none of the EU crats want it to happen.  There is nothing like adversity to create discord and division, no matter how much unity appears on the surface.  We're talking about human beings, not robots.

[GoldFinger1969]

On 9/19/2022 at 12:22 PM, World Colonial said:

 Look at the Swiss National Bank.  In 2011, they pegged the CHF to the Euro at 1.20.  Considering they were attempting to suppress the value of their national currency where they control the supply, if any price manipulation should have worked "forever", this should have been it.

Why would you think that price manipulation would work if at all beyond the short-run ?  It NEVER does.  See, Soros vs. Bank of England, 1992.  

And no where is it more fleeting than in the currency markets, where $7 trillion trades daily.  You think you can hold back that tide ?  Good luck with that.

I think, WC, you continue to have a single-minded focus on debt and assume that more debt in the aggegate is bad without looking at the underlining debt fundamentals and more importantly THE DYNAMICS of multiple countries with large debt levels.  It doesn't mean they ALL collapse, if any.

As an example, the United States -- as the global reserve currency -- is required to run a trade deficit in goods and services (the flip side of a capital account surplus in financial assets)....trade deficits for many countries are lethal but for the U.S. it not only is NOT lethal it is an economic necessity for the U.S. in the global economy.  

Edited September 20, 2022 by GoldFinger1969

[Henri Charriere]

Q.A.:  What now, Ricky?

🐓:  The case cited by GF1969, as set forth hereinabove, does not comply with the Uniform System of Citation, 21st Ed.

Q.A.:  Let me guess. You want me to tell him that. Keep dreamin'.

Edited September 20, 2022 by Quintus Arrius
Obstreperous rooster.

[World Colonial]

On 9/19/2022 at 11:18 PM, GoldFinger1969 said:

Why would you think that price manipulation would work if at all beyond the short-run ?  It NEVER does.  See, Soros vs. Bank of England, 1992.  

I don't believe this and if you understood what I have written before, you should know it.  I used the example of the CHF to contradict your claim of any country having any supposed "defense" to prevent negative outcomes.  There is no such defense, as the only "tools" any country has are the same ones any others have and had in the past. The effectiveness of these "tools" is ultimately contingent upon collective market participant psychology, as your example illustrated.

On 9/19/2022 at 11:18 PM, GoldFinger1969 said:

I think, WC, you continue to have a single-minded focus on debt and assume that more debt in the aggegate is bad without looking at the underlining debt fundamentals and more importantly THE DYNAMICS of multiple countries with large debt levels.  It doesn't mean they ALL collapse, if any.

I'm also aware that there is no specific debt level to trigger a crisis of any sort.  I know it because I concurrently know that these events aren't caused by any supposed "fundamentals" but market participant psychology.  You are the one who holds the almost universal erroneous conventional belief of "fundamental" causality, not me.

I haven't also said that any "collapse" is imminent either.  I know the fundamentals are a lot worse than you will ever admit but don't expect this now or in the immediate future.

Of course, it also depends upon what anyone means by "collapse".  In your example of the GBP, it didn't take a collapse in the relative FX value to drive this currency out of the predecessor currency arrangement.

That's what applies with this subject of the Euro and monetary union.  The monetary union can break apart in whole or in part without a "collapse".  Given the political environment, I can anticipate it will be resisted vigorously which will ultimately trigger very negative "blowback" (another psychological outcome) but this is another thing entirely.

On 9/19/2022 at 11:18 PM, GoldFinger1969 said:

As an example, the United States -- as the global reserve currency -- is required to run a trade deficit in goods and services (the flip side of a capital account surplus in financial assets)....trade deficits for many countries are lethal but for the U.S. it not only is NOT lethal it is an economic necessity for the U.S. in the global economy.  

I haven't said a thing about this subject in any prior post.  But as with anything else, there is a limit to how long the US will be able to consume above its means at the rest of the world's expense.  A segment of the population in the rest of the world will ultimately be poorer in the future for agreeing to this arrangement, since these currency units will obviously never be redeemed at anything close to the value in the original exchange.  

Edited September 22, 2022 by World Colonial

[VKurtB]

On 9/22/2022 at 10:59 AM, World Colonial said:

I don't believe this and if you understood what I have written before, you should know it.  I used the example of the CHF to contradict your claim of any country having any supposed "defense" to prevent negative outcomes.  There is no such defense, as the only "tools" any country has are the same ones any others have and had in the past. The effectiveness of these "tools" is ultimately contingent upon collective market participant psychology, as your example illustrated.

I'm also aware that there is no specific debt level to trigger a crisis of any sort.  I know it because I concurrently know that these events aren't caused by any supposed "fundamentals" but market participant psychology.  You are the one who holds the almost universal erroneous conventional belief of "fundamental" causality, not me.

I haven't also said that any "collapse" is imminent either.  I know the fundamentals are a lot worse than you will ever admit but don't expect this now or in the immediate future.

Of course, it also depends upon what anyone means by "collapse".  In your example of the GBP, it didn't take a collapse in the relative FX value to drive this currency out of the predecessor currency arrangement.

That's what applies with this subject of the Euro and monetary union.  The monetary union can break apart in whole or in part without a "collapse".  Given the political environment, I can anticipate it will be resisted vigorously which will ultimately trigger very negative "blowback" (another psychological outcome) but this is another thing entirely.

I haven't said a thing about this subject in any prior post.  But as with anything else, there is a limit to how long the US will be able to consume above its means at the rest of the world's expense.  A segment of the population in the rest of the world will ultimately be poorer in the future for agreeing to this arrangement, since these currency units will obviously never be redeemed at anything close to the value in the original exchange.  

You must be a laugh riot at parties. Perennial pessimists need to drink themselves into stupors. Too much Chicken Little for my tastes, man. “The sky is falling … eventually.” Here’s the dealio. Eventually is after the end of my life expectancy. There’s only one true bogeyman out there, and his name’s Putin and his irresponsible rhetoric. 

[BillJones]

I was buying a wire transfer at my local bank yesterday to pay a dealer in London. The bank people made mistakes on the first two forms and had to do it over again. Each time they did it, the price of the British pound was going down. In the end, I ended up paying less than I would have the first time around. 

[World Colonial]

On 9/22/2022 at 12:57 PM, VKurtB said:

You must be a laugh riot at parties. Perennial pessimists need to drink themselves into stupors. Too much Chicken Little for my tastes, man. “The sky is falling … eventually.” Here’s the dealio. Eventually is after the end of my life expectancy. There’s only one true bogeyman out there, and his name’s Putin and his irresponsible rhetoric. 

Claiming most people are going to be poorer (my actual claim) doesn't remotely correlate to what you think I said.

Edited September 22, 2022 by World Colonial

[GoldFinger1969]

On 9/22/2022 at 11:59 AM, World Colonial said:

But as with anything else, there is a limit to how long the US will be able to consume above its means at the rest of the world's expense.

You may be right....but what if it takes 75 or 125 years for that scenario to happen ?  As Keynes said, in the LONG RUN we are all dead. 

You can't make investment decisions based on some of your assertsions is all I am saying.  They're all VALID observations.....good CONCLUSIONS....just not INVESTABLE in any reasonable time-frame.

Look at how long the Euro has survived ! 

[Henri Charriere]

🐓:  Let's see now... if I liver longer than you, I obviously cannot tell you how things worked out...

Q.A.:  ...And if I were to live longer, I, likewise couldn't tell you. It's a no-win situation. Ultimately unproveable. 

🐓:  You're not thinking of selling, are you?

Q.A..:  Relax, Ricky!  When's the last time I told you the truth about anything?

🐓 :  [Are you talking to roosters, again?]