Some thoughts bout currencies & Euro
I use to be surprised how CERTAIN most comments distribute their estimates about influences of EURO. The same sources was predicting a huge boom in East(er)-Germany after '89.
What I know is what everybody can see: You're living in US about 1.8-times more expensive. A 1-$-1-DM relation would be quite fair. Similar is the situation in France and in Italy - but you must be right there when you will write a number, that fast prices are moving there. The "free (for consuming) income" of a average german family is less than 500,- DM, just enough for 30 caf‚s in Paris. OK, one for each day. German (!!!) cars are a lot cheaper in Florida and in Tenerife. This list of examples could be continued with no end.
Some gents forget the inert relation "1 EURO = 1 EURO". That is as valid for loan as for consum. Underproductive nations like French could learn the same lession some 3rd-world-nation musted learn (of course in a very smaller range): the trick to pay less then you bought (via currency-manipulation) doesn't work anymore.
IMO you would be surprised what would happen if US and Japan would use the same currency. I guess, America would must pay 1:1 for his year-for-year balance-deficit. This would force the US-economy in a deep crizis, not the Japanese, which produced more year-for-year than they consumed.
German economy is really not sick - at no time in history German industry was that successful than today. But we pay a lot for haded weak, old (but influent) companies & branches from Siemens to coalminers, partly as tax-gifts, partly over the way through our "new states" in east-Germany. That's the way our economy seems to be "weak" - the US-economy use to look weak everytime your proud nation "must" to play war anywhere in the world - it doesn't matter, how you burn your money, in every case you don't HAVE it anymore.
Investing based on currencies? Good idea - but from where can you hear the currency-rates for the next month, the next year? All I know is that ALL PREDICTIONS are b*llsh*t - every wheather-prediction has better probabilities.
Even if I REALLY don't have a meaning about influences of Euro, about currencies I'm absolutely sure: It doesn't matter when or what you change: You cannot know if it's wrong or right. Thus, you can change whenever and whatever you want.
Look at me: I bought my US-$ about 1.47 DM, long time ago. In the meantime I "lost" sometimes, up to today I won. And? Nothing and. First I don't change my money back since I invest in US-companies. Second I've nothing gained for non-DM-consum, f.e. travelling in US-$-regions, nor changing in Pesetas for living in Spain.
Last not least, and again and again: Could it be that we sometimes forget the fees? My Swizz-bank charges me by 1.9% (percent!!!) for every "external" trade. (in Switzerland, external means outside Swizz, that means quite every exchange worldwide). You will be charged by 3% for taking money via creditcard, plus exchange-fees, plus "clever" exchange-rates, plus validation-dates. It's the same problem that I mentioned about hedging-strategies with options. My personal clue (mostly I'm wrong...) is just doing what I basically want - and nothing more.
Just MHO, as ever.
Jury |
