Tuesday, July 10, 2007

Huge news came out today, it was not good for America

The Euro was started in 1999 as an accounting currency in 1999. In 2002 it was adopted as a full currency with coins and bills.

There are currently thirteen nations on the Euro: Austria, Belgium, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, and Spain. Cyprus and Malta will join in six months.

The best exchange rate (for the United States) was when 1 Euro exchanged for a little over 82 cents. This was in October of 2000.

The worst exchange rate (for the United States) was reached today when 1 Euro exchanged for a little more then one dollar and thirty seven cents. Today is July 9th, 2007.

This is extremely bad news for the US economy in the long run. What it means in simple terms is that people around the world currently would rather hold Euros and not hold dollars. In reality what it means is that people feel that the thirteen countries listed above will grow economically faster then the United States.

It depresses me the thirteen countries above have created an economy that investors perceive to be stronger the the US. Many of the countries that use the Euro are Socialist and many have overall tax rates in excess of 60%!

We need to scrap our current tax code and completely reform our Trade Policy.

The dollar being this low verse the Euro should be discussed by every candidate that is running for President and it should be discussed today.

Unfortunately, they will keep talking about issues to stir up their own political base and will ignore the problems this country faces...

Mike Sylvester

9 comments:

Robert Enders said...

I have more confidence in the economic future of the United States than that of Europe. Just because people are willing to invest in something does not mean that it's a good idea to invest in it.

That being said, we need to do two things. We need to bring inflation under control, and we need to bring down the national debt. Both contribute to the falling dollar.

LP Mike Sylvester said...

Robert:

What?

People invest in things they have confidence in.

You are basically tryng to throw economics out the window...

MIke Sylvester

Robert Enders said...

No, the people who place such a high value on the euro are throwing economics out the window. The EU is today what Yahoo and AOL were in 1999: overvalued.

Kody Tinnel said...

With the way the United States borrows and spends(often wastefully) so much money every year it doesn't surprise me that some people around the world are losing faith in the American dollar.

Jeff Pruitt said...

Investing in the US right now is a sucker's bet and everyone knows it. We've got a mountain of debt and no plan in place to reduce it. In fact, our trade policy will only continue to make the problem worse and people realize that too.

You go ahead and invest in the dollar Robert, you're going to lose a ton of money doing so...

Kody Tinnel said...

If I'm not mistaken doesn't China essentially own the US financially right now due to all of our borrowing?

Please correct me if I am not understanding this properly.

LP Mike Sylvester said...

Kody:

Japan and China hold a lot of the US debt right now... I am not sure whcih country owns more...

Mike Sylvester

Jeff Pruitt said...

Japan and China are now the top 2. We owe Japan $1.1 Trillion and China $700 Billion. But our debt to China is rising much faster than Japan and I would expect China to surpass Japan sometime next year.

Kody Tinnel said...

Thank you both for the information about China and Japan.

I appreciate it.

Those are some scary numbers though.