Quebecers lazy, Bouchard says

[Logic 7]

Not even close, Logic.

http://www.oecd.org/document/28/0,2340,en_2825_495684_2750044_1_1_1_1,00.html

Ok toro, i admit, you know way better than me regarding economy, but honestly explain to me why EURO is still higher than american money??

This is an honest question.

 

[Colin]

Having a strong currancy is not always a good thing, as Japan found out in the hard way in 1989, it makes your exports much more expensive thus losing competitive edge in the world economy. Not all countries in the EU are benifiting from the high value of the Euro, and its forcing many of the poorer neighbourhoods into recessions. Though many countries are trying to mimick Irelands success. Some countries actually try to maintain a specific target dollar value (for Canada its between 65-75 cents) in order to maintain competitive exportation.

Bouchard was not far off the mark, but his comments have been taken out of context by most. He was making a statement that Quebec's economy is unsupportable without the greater Canadian economy, they want to many things, such as cheap education, healthcare, more roads, better social programs, but are not willing to put the time/effort into creating a thriving economy to support these wants. One of the reasons the USA was able to create such a strong economy in the later part of the 20th century was a steady 5 day work week, with 2-4weeks off a year, its recent economic decline is more linked to its political problems, and even more so to the rise of cheap labour in the world market, taking jobs out of America. If Quebec where to seperate today, it would be on the quick road to economic disaster.

 

[Toro]

Ok toro, i admit, you know way better than me regarding economy, but honestly explain to me why EURO is still higher than american money??

This is an honest question.

That's a fair question, Logic.

First, the absolute value doesn't really mean anything. The fact that €1=$1.25 is somewhat meaningless in and of itself. For example, when looking at the dollar compared to the Japanese yen 40 years, $1 used to equal ¥10,000. Today $1=¥125. What matters isn't that the number of yen is greater than the dollar in conversion. What matters is that the yen has gotten progressively stronger against the dollar over time.

Currency values are a function of many things, beyond relative strengths in the economy. Over time - long periods of time, sometimes decades - the strength of a currency is directly related to the strength of the economy. But in the near term, currencies can fluctuate for a number of reasons. Such reasons include relative interest rates (higher interest rates will usually mean a higher currency), sentiment (investors might not "like" a particular country at any given time), central bank policies (central banks buy and sell currencies to manage currency levels for a variety of reasons), inflation (higher inflation means a lower currency), capital flows (such as investments in the oil sands from outside Canada), amongst others. But over the long run, currency valuations will reflect relative strength in the economy.

The reason why the euro had been rising against the dollar until last year - it has been in a trading range since the end of 2004 - is because the government of the United States instituted policies that were designed, whether on purpose or not, to devalue the currency. They ran large fiscal and trade deficits (which lowers your currency), and the Federal Reserve lowered its lending rate to an unheard of rate of 1% (which lowers your currency). But now those factors are reversing as the relative fiscal deficits are now better in the US than in Europe and interest rates are higher in the United States than in Europe.

Understand that I am not a blind ideological partisan. The day after the Republicans won the 2002 Congressional elections, I was in the market heavily buying gold stocks, so much so that I was the largest holder of gold stocks in the Southeast, or so I was told. (Not me personally, for my organization.) The massive tax cuts the Republicans were promising and delivered was going to drive up the price of gold and drive down the dollar, which is what happened. I bet against the dollar and it paid off.

I hope that helps.

 

[MikeyDB]

Unions ...

Oh yeah those guys that earn forty bucks an hour for life, have the best health care and pension plan in the world...oh now wait a minute...sorry

That's politicians.

 

[Logic 7]

That's a fair question, Logic.

First, the absolute value doesn't really mean anything. The fact that €1=$1.25 is somewhat meaningless in and of itself. For example, when looking at the dollar compared to the Japanese yen 40 years, $1 used to equal ¥10,000. Today $1=¥125. What matters isn't that the number of yen is greater than the dollar in conversion. What matters is that the yen has gotten progressively stronger against the dollar over time.

Currency values are a function of many things, beyond relative strengths in the economy. Over time - long periods of time, sometimes decades - the strength of a currency is directly related to the strength of the economy. But in the near term, currencies can fluctuate for a number of reasons. Such reasons include relative interest rates (higher interest rates will usually mean a higher currency), sentiment (investors might not "like" a particular country at any given time), central bank policies (central banks buy and sell currencies to manage currency levels for a variety of reasons), inflation (higher inflation means a lower currency), capital flows (such as investments in the oil sands from outside Canada), amongst others. But over the long run, currency valuations will reflect relative strength in the economy.

The reason why the euro had been rising against the dollar until last year - it has been in a trading range since the end of 2004 - is because the government of the United States instituted policies that were designed, whether on purpose or not, to devalue the currency. They ran large fiscal and trade deficits (which lowers your currency), and the Federal Reserve lowered its lending rate to an unheard of rate of 1% (which lowers your currency). But now those factors are reversing as the relative fiscal deficits are now better in the US than in Europe and interest rates are higher in the United States than in Europe.

Understand that I am not a blind ideological partisan. The day after the Republicans won the 2002 Congressional elections, I was in the market heavily buying gold stocks, so much so that I was the largest holder of gold stocks in the Southeast, or so I was told. (Not me personally, for my organization.) The massive tax cuts the Republicans were promising and delivered was going to drive up the price of gold and drive down the dollar, which is what happened. I bet against the dollar and it paid off.

I hope that helps.

Very interesting, thankx. I'll have a different view of you now kidding.