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(Bloomberg)   Dollar hits lowest level versus Euro since May on announcement of QE3. THANKS, BEN. ENJOY YOUR LIMO   (bloomberg.com) divider line 38
    More: Followup, Federal Reserve, federal funds rate, U.S. currency, Federal Open Market Committee, Bank of Japan, Mitsubishi UFJ, IntercontinentalExchange Inc., yen  
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718 clicks; posted to Business » on 14 Sep 2012 at 10:15 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-14 08:39:35 AM  
Ssssshh, Subby. Smart people are talking.

You can talk later after school.
 
2012-09-14 08:48:33 AM  
A four month low? Oh so crippling.
 
2012-09-14 10:15:10 AM  
Not for anything, but a low dollar vs. a Euro isn't necessarily a bad thing. When the dollar is cheaper, US exports are also cheaper, which spurs other countries to buy our goods.
 
2012-09-14 10:21:08 AM  
The horror
research.stlouisfed.org
 
2012-09-14 10:21:20 AM  
NOT SINCE MAY!!! NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!
 
2012-09-14 10:26:37 AM  
Third time's a charm, right?
 
2012-09-14 10:34:46 AM  

Rain-Monkey: Ssssshh, Subby. Smart people are talking.

You can talk later after school.


That's right. Takes an intelligent, mature adult to run the printing press at the equivalent of 12,000,000 full time jobs. Now, stand back, hold mah beer and watch my productivity.
 
vpb [TotalFark]
2012-09-14 10:35:34 AM  
That's a good thing. It discourages imports, makes domestic goods more affordable relative to imports and makes our exports more affordable.

That's why people were criticizing China for keeping the value of renminbi so low.
 
2012-09-14 10:37:25 AM  

FTFA:

[Fed is conducting] open-ended quantitative easing, a process that tends to debase the U.S. currency.


OMG seriously? Quantitative Easing *is* the act of debasing our currency: the quantity of money is increased without a matching increase in actual wealth for that money to purchase. They are running the printing press, so yes, American dollars are now worth less for the simple reason that they are dumping more and more bales of freshly printed $100s out of a helicopter.

The author (Joseph Ciolli) either decided to snooze-bar through that 8am Econ class during a particularly important chapter, or else is being intentionally dense for some political reason, or else is just clueless.
 
2012-09-14 10:49:23 AM  
What this country needs to balance the top heavy wealth gap is some old fashioned hyper-inflation. Make it happen and I can pay my house and debts off in a year! And at the same time the filthy rich will be worth less. It's a win win.
 
2012-09-14 10:55:01 AM  
The horror:
growlersoftware.com
 
2012-09-14 10:58:44 AM  

rev. dave: What this country needs to balance the top heavy wealth gap is some old fashioned hyper-inflation. Make it happen and I can pay my house and debts off in a year! And at the same time the filthy rich will be worth less. It's a win win.


Sorry, but no.because my wealth isn't stored as a swimming pool of $100 bills. Sure I have one of those but my wealth is is in solid assets that increase in value as the dollar decreases in value. The people making an hourly wage and spending most of their income on food/shelter are the ones who get screwed while it just makes it easier to fill my swimming pool.
 
vpb [TotalFark]
2012-09-14 11:02:26 AM  

Breathe Laugh Twitch: FTFA:

[Fed is conducting] open-ended quantitative easing, a process that tends to debase the U.S. currency.

OMG seriously? Quantitative Easing *is* the act of debasing our currency: the quantity of money is increased without a matching increase in actual wealth for that money to purchase. They are running the printing press, so yes, American dollars are now worth less for the simple reason that they are dumping more and more bales of freshly printed $100s out of a helicopter.

The author (Joseph Ciolli) either decided to snooze-bar through that 8am Econ class during a particularly important chapter, or else is being intentionally dense for some political reason, or else is just clueless.


Someone obviously slept through economics 101.
 
2012-09-14 11:06:33 AM  

impaler: The horror:
[growlersoftware.com image 636x301]


I'm not sure what your point is. Japan had been in a sustained period of deflation after their economic bubble prior to their attempt to create inflation through monitary policy. Apart from the housing sector, we have not experienced deflation so there's no valid comparison to be made.
 
2012-09-14 11:21:50 AM  

Mr. Eugenides: Apart from the housing sector, we have not experienced deflation so there's no valid comparison to be made.


Apart from where the vast majority of money is spent, we have not experienced deflation.

And QE3 is directed at that segment of the economy.
 
2012-09-14 11:50:03 AM  
Subby, please explain to me exactly why pushing for a strong dollar is a goal in and of itself.

Oh, and feel free to use big words, because I have a doctorate in Econ, and think that you are no more than a total idiot, just repeating other idiots' talking points, with zero actual comprehension.
 
2012-09-14 11:55:22 AM  

Mr. Eugenides: rev. dave: What this country needs to balance the top heavy wealth gap is some old fashioned hyper-inflation. Make it happen and I can pay my house and debts off in a year! And at the same time the filthy rich will be worth less. It's a win win.

Sorry, but no.because my wealth isn't stored as a swimming pool of $100 bills. Sure I have one of those but my wealth is is in solid assets that increase in value as the dollar decreases in value. The people making an hourly wage and spending most of their income on food/shelter are the ones who get screwed while it just makes it easier to fill my swimming pool.


People who have any wealth at all see that value decrease during inflation. That is why it is the worst thing that most people can imagine. Poor and indebted people are already suffering and can handle it better. It is the wealthy who suffer the most from inflation. For me I have no where to go but up.
 
2012-09-14 12:06:34 PM  
So when my company sells a couple million dollars worth of goods to China and Russia and Canada and Europe and Africa, it costs them less to buy it so they are more inclined to make the deal?

Or am I off base in saying that if we are trying to improve the economy, making our exports more attractive isn't necessarily a bad thing?
 
2012-09-14 12:22:31 PM  
I never understand currency discussions. Does this mean that if I have a pile of Euros, now is a good time to change them to dollars, or does it mean it's a bad time?
 
2012-09-14 12:42:16 PM  

Oreamnos: I never understand currency discussions. Does this mean that if I have a pile of Euros, now is a good time to change them to dollars, or does it mean it's a bad time?


It's a good time to go in that direction, it's a bad time to be changing your dollars to Euros.
 
2012-09-14 12:56:14 PM  

getsoutalive: Rain-Monkey: Ssssshh, Subby. Smart people are talking.

You can talk later after school.

That's right. Takes an intelligent, mature adult to run the printing press at the equivalent of 12,000,000 full time jobs. Now, stand back, hold mah beer and watch my productivity.


Unless you are going to Europe, prices haven't gone up because of a weak dollar. remarkably inflation has been pretty flat for the last few years.
 
2012-09-14 12:59:09 PM  

meat0918: So when my company sells a couple million dollars worth of goods to China and Russia and Canada and Europe and Africa, it costs them less to buy it so they are more inclined to make the deal?

Or am I off base in saying that if we are trying to improve the economy, making our exports more attractive isn't necessarily a bad thing?


No you are not, and that is side benefit of this policy. Actually after the 90's we have been trying for a weak dollar policy just to do that.
 
2012-09-14 01:47:00 PM  

All2morrowsparTs: meat0918: So when my company sells a couple million dollars worth of goods to China and Russia and Canada and Europe and Africa, it costs them less to buy it so they are more inclined to make the deal?

Or am I off base in saying that if we are trying to improve the economy, making our exports more attractive isn't necessarily a bad thing?

No you are not, and that is side benefit of this policy. Actually after the 90's we have been trying for a weak dollar policy just to do that.


It makes sense too since we as a country tend to produce export more high-end products and tech and can't compete in the race to the bottom but if you have to buy similar airplanes from Boeing in Dollars or Airbus in Euros and extra selling point for the developing world is paying for something in Dollars.
 
2012-09-14 01:49:20 PM  

bronyaur1: Subby, please explain to me exactly why pushing for a strong dollar is a goal in and of itself.

Oh, and feel free to use big words, because I have a doctorate in Econ, and think that you are no more than a total idiot, just repeating other idiots' talking points, with zero actual comprehension.


Strong dollar impresses the ladies.
 
2012-09-14 01:54:28 PM  

RexTalionis: Not for anything, but a low dollar vs. a Euro isn't necessarily a bad thing. When the dollar is cheaper, US exports are also cheaper, which spurs other countries to buy our goods.


I hate to break it like this, but no one in Europe has money for the types of things we make.
 
2012-09-14 01:54:54 PM  
No! We need a strong dollar because that sounds better! Dollar = strong then America = strong. Weak currency is for babies like Europeans with childish single currency. Imagine their sad, little socialist faces when they cannot buy superior American jeans with their Mickey Mouse money while we decorate our Christmas trees in denim.
 
2012-09-14 01:58:17 PM  
But, but, but ... GOLD! BUY GOLD!

/Waiting for the gold cultists to show up.
 
2012-09-14 02:02:31 PM  

getsoutalive: Rain-Monkey: Ssssshh, Subby. Smart people are talking.

You can talk later after school.

That's right. Takes an intelligent, mature adult to run the printing press at the equivalent of 12,000,000 full time jobs. Now, stand back, hold mah beer and watch my productivity.


The money never gets to the functional physical economy. The banks suck it up and keep it -- it disappears into their black-hole bottom lines.

Better to give every adult American $50,000. That would goose the economy, oh yes it would.
 
2012-09-14 02:19:59 PM  

impaler: Mr. Eugenides: Apart from the housing sector, we have not experienced deflation so there's no valid comparison to be made.

Apart from where the vast majority of money is spent, we have not experienced deflation.

And QE3 is directed at that segment of the economy.


So it's devaluing the currency in order to prop up the remains of an almost deflated bubble. Makes sense.
 
2012-09-14 02:35:52 PM  
I dont know of its been said by the reason the Euro has been strengthening against the dollar recently isn't because of any fed moves, it's because Europe is looking like less of a shiat show that it was in the spring.

If that reverses itself the dollar will strengthen again.
 
2012-09-14 03:48:37 PM  

RexTalionis: Not for anything, but a low dollar vs. a Euro isn't necessarily a bad thing. When the dollar is cheaper, US exports are also cheaper, which spurs other countries to buy our goods.


So what about imports? Americans import most everything except food.

Well?
 
2012-09-14 04:39:12 PM  
Wait - I was just getting used to everyone telling me the Euro was going to collapse and that I should quit my (euro paying) job and move back to the US.
 
2012-09-14 05:45:09 PM  

HotIgneous Intruder: But, but, but ... GOLD! BUY GOLD!

/Waiting for the gold cultists to show up.


I prefer Silver. Thanks Ben!

/cha ching
 
2012-09-14 07:03:18 PM  

rev. dave: What this country needs to balance the top heavy wealth gap is some old fashioned hyper-inflation. Make it happen and I can pay my house and debts off in a year! And at the same time the filthy rich will be worth less. It's a win win.


That would also wipe out the Social Security trust fund, the federal workers' retirement fund, and holders of long-term debt (Fannie/Freddie), as these are all fixed-rate assets.
 
2012-09-14 07:04:33 PM  

HotIgneous Intruder: The money never gets to the functional physical economy. The banks suck it up and keep it -- it disappears into their black-hole bottom lines.


No, they are depositing it back with the FED, which pays them interest on it.
 
2012-09-15 01:17:50 AM  
Why are people pretending like a lower dollar is a bad thing? It increases exports which helps our unemployment problem.

As for imports: A large amount of what we import increases our quality of life, but is not necessary for life. If the weaker dollar lowers unemployment by a bit but also increases the cost of foreign-made personal electronics or foreign-made cars, then it is a win for our economy. People will be okay if they can't buy as many imports. People will not be okay if they can't find gainful employment.
 
2012-09-15 08:42:37 AM  

Xetal: Why are people pretending like a lower dollar is a bad thing? It increases exports which helps our unemployment problem.


Anyone notice the price of gas?
 
2012-09-15 03:50:54 PM  
Mr. Eugenides: rev. dave: What this country needs to balance the top heavy wealth gap is some old fashioned hyper-inflation. Make it happen and I can pay my house and debts off in a year! And at the same time the filthy rich will be worth less. It's a win win.

Sorry, but no.because my wealth isn't stored as a swimming pool of $100 bills. Sure I have one of those but my wealth is is in solid assets that increase in value as the dollar decreases in value. The people making an hourly wage and spending most of their income on food/shelter are the ones who get screwed while it just makes it easier to fill my swimming pool.


Not really, since it forces business to spend huge some of their sums of money, or lose value. That tends to increase demand in capital goods and services, ie provide jobs for business improvements (real estate, construction, machinery, technology), who's workers paid then demand consumer goods and purchases. Which then filter back to Joe hourly wage. Growing the economy with a little bit more inflation is much better for Joe six pack than a hard dollar and companies sitting on trillions in liquidity reserves, while the economy stagnates.

The biggest worry is stagnation, but looking at how inflation centric the FED has been the last 35-40 years I don't think it will be a concern. The second certain metrics are hit they'll scale back, economy or not, because inflation has overtaken their dual mandate on jobs/inflation.
 
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