http://story.news.yahoo.com/news?tmpl=story&cid=568&e=2&u=/nm/markets_forex_dc


Of course, our diplomatic disaster, obtuse ignoramous, fundamentalist, failed businessman, and former coke-head of a POTUS has nothing to do with it....

I wondered about Bush spending and cutting taxes.

A lower valued dollar will make us more competive in the world market but would limit our almost free items from China, a great watch for $5. or tennis shoes for $15; we just bought a nice AM/FM clock radio with lighted dial and all the bangs and whistles from China for $8. Who in the US could compete with that?

Where did they get the techicology? as an example, In the late 80's the USA and motorola spend billions to create a new generation of computer chips but they took the technology to China because of cheap labor. It was our only choice if we wanted to sell what we developed.

old reb

the EURO are 1.42 Canadien

Originally posted by old-reb
I wondered about Bush spending and cutting taxes.

A lower valued dollar will make us more competive in the world market but would limit our almost free items from China, a great watch for $5. or tennis shoes for $15; we just bought a nice AM/FM clock radio with lighted dial and all the bangs and whistles from China for $8. Who in the US could compete with that?

old reb .



If China uses US dollars as their commercial currency then the chinese goods will remain cheap in US (as they are indexed in the same currency) and most important, it will make Chinese goods even cheaper in Europe. So I guess China will keep their fixed exchange rate with the US dollar.

I think a weak dollar is not so bad for American economy after all. US has the highest productivity of the world, your products will become even more competitive, a lot of European companies are going to suffer either profit cuts or market-share losses due to the exchange rate.
And right now for me it's just perfect, I go to US in 1 month and a half and I will bringing with me my Euro-savings :D

That's right. One of the only advantages of a strong Euro (for us europeans) is cheaper oil. And cheap holidays in the USA.

Originally posted by astrapol2
That's right. One of the only advantages of a strong Euro (for us europeans) is cheaper oil.

I heard some time ago that part of the OPEP countries wanted to trade their oil in Euros (obviously they will get more US dollars to buy "nice things"over there). I don't know whether they finally changed to Euros or not.
If so then it is not good for the world economy to have such a difference between the two currencies.

On the other hand, we (Europeans) suffers very high taxes when we going to the petrol station (3/4 of the consumer price in some countries) so we don't have an actual advantage there.

Originally posted by Teddy
I heard some time ago that part of the OPEP countries wanted to trade their oil in Euros (obviously they will get more US dollars to buy "nice things"over there). I don't know whether they finally changed to Euros or not.


They have not. This would not be a merely technical decision - it would be a political decision that would affect the global economic balance, and could harm considerably the US economy.

Originally posted by Teddy

On the other hand, we (Europeans) suffers very high taxes when we going to the petrol station (3/4 of the consumer price in some countries) so we don't have an actual advantage there.

Right, but that is at an invidual level - the trade balance, at a national level, benefits from a cheaper oil. I am personally in favor of high taxes on oil : they make our societies look for alternatives and eventually to save oil. Plus, these taxes contribute to the budget, allowing other taxes to be lower (or more public fund to be raised, depends on how you see the things). And one more thing : they soften the oil prices variations.

Originally posted by astrapol2


Right, but that is at an invidual level - the trade balance, at a national level, benefits from a cheaper oil. I am personally in favor of high taxes on oil : they make our societies look for alternatives and eventually to save oil. Plus, these taxes contribute to the budget, allowing other taxes to be lower (or more public fund to be raised, depends on how you see the things). And one more thing : they soften the oil prices variations.

Actually I am not in favour of high taxes on oil or of any high indirect taxes. It doesn't work because:
1) It has not incentivated any new alternatives. That could be done with higher expenditure on R&D or giving tax cuts to companies expending money on that kind of research field.
2) Of course higher taxes contributes to the budget, but the oil tax has to be paid by everybody who wants or need to use their cars instead of the people with a higher income (much fairer). I would prefer to have a lower oil (or any indirect tax for that matter) taxation and then to pay more income based. Otherwise the working class would pay the same taxes on oil than the executive or the richest guy in town. It is not fare.
3) About the prices variations, I don't know in France but in Spain and The Netherlands companies are very eager to increase prices when the market does the same but they wait quite a lot to decrease them whent the market goes down...well they are not non-profit organisations, they are companies and they play to their advantage.

1- Difficult to check. But I guess everyone tends to spill less oil when it's expensive. It also contributes to make train more competitive compared to car or plane.
2- I agree with you. Income tax is the fairer. But indirect taxes can be useful in complement.
3- In France too the price rise. But I think the tax system allows the govt to lowr taxes when the prices go up (I should check).

BTW where do you live in Netherlands ? My city is Lille, it's just next to the Belgian border, we're nearly neighbours (especially compared to many of our american friends on this forum)

Originally posted by astrapol2
1- Difficult to check. But I guess everyone tends to spill less oil when it's expensive. It also contributes to make train more competitive compared to car or plane.
2- I agree with you. Income tax is the fairer. But indirect taxes can be useful in complement.
3- In France too the price rise. But I think the tax system allows the govt to lowr taxes when the prices go up (I should check).

BTW where do you live in Netherlands ? My city is Lille, it's just next to the Belgian border, we're nearly neighbours (especially compared to many of our american friends on this forum)

1- Tell me! a full tank over here costs around €50! Train might be more competitive if the electricity is generated by other sources than fuel energy plant. Anyhow train is all right to go from one city center to other but not to go to industrial areas where people work (at least I have that experience)
2- I'm still amazed that baby food bares up to 19% VAT in some countries...the VAT structure in Europe sucks, it is not the same goods/%tax in each country and some important items are highly taxed
3- Well French government is then quite a nice one...they don't do that in Spain nor The Netherlands, they like to rise their indirect taxes but to decrease them? I still have to see that!

I live in Eindhoven (saddely famous in recent times), yup it is close to France (only few hours by car). So we are neighbours but for a short time, I will move to US after Christmas.

I understand you're an american citizen - am i right ? Hope you enjoyed your time in Europa in spite of our VAT system ;)

Originally posted by astrapol2
I understand you're an american citizen - am i right ? Hope you enjoyed your time in Europa in spite of our VAT system ;)

No, I am a Spanish born and citizen, my wife is American.
We met in The Netherlands and we decided to move either to US or to Spain (we wanted to live somewhere familiar to us)...and at the end US won (just because of better job opportunities for both of us).

Did you like the Netherlands ? It's a beautiful place but I guess life is very different from both spain and the USA.

Originally posted by astrapol2
Did you like the Netherlands ? .

If I have to say the truth...I have a mixed feeling. Poor food (specially compared to Mediterranean food) and worst weather (too windy for my taste) but the people is nice maybe to "germanic", well you know they can only think in terms of rules and regulations no flexibility but they are civilized and nice.
The country is tiny...not only the space, the houses are just tiny and the cars very very tiny which is kind of charming but not practical.

yes, from what I've heard the dutch society is rather normative. A bit difficult for us latins…
And i agree that meditarranean food is better. They have many good indonesian and thai restaurants though.

Originally posted by astrapol2
1- Difficult to check. But I guess everyone tends to spill less oil when it's expensive. It also contributes to make train more competitive compared to car or plane.


I agree with you on that, I am for more public transportation. When I visit cities with public transportation, even if it is only a bus, I enjoy traveling around the area so much more.

And when I sit in my car for 45 minutes to go to work and again to come home for 5 days a week. I wish I was on a train or bus so I could take a nap or read a book with this dead time.

old reb

I'm much more in favor of gasoline/oil taxes than I am of income taxes. It is possible to choose to not pay gas taxes by moving closer to work and not using oil/gas as much. Voluntary > Involuntary Taxes

The weakening dollar concerns me quite a bit. Bush and the Republican controlled congress have the abilities to do something about the growing federal deficit, and since Bush doesn't have to worry about being re-elected, he can take unpopular moves (like cutting benefits/costs within the govt) and not worry about the political consequences. So it's time for Bush to live up to his Republican affiliation and BE fiscally responsible!

Actually Republican presidents have a tradition of high budget deficit while democrats don't.