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The dollar index is 50% or more Euro and there’s been a big shift there, probably driven by the fact that the EU appears to be making progress towards a fiscal
by erentz 6y ago
The dollar index is 50% or more Euro and there’s been a big shift there, probably driven by the fact that the EU appears to be making progress towards a fiscal union - in the mean time supporting (hopefully) a rescue package that transfers funding from the wealthier to less wealthy states. (Something we don’t think about much but happens in the US as normal course, think CA taxes going to AL.)
Combine that with the absolutely incompetent response to the pandemic and economic situation, whereas Europe has handled it well and managed to keep everyone on payrolls the US went down the massive unemployment and potential evictions route and is now squabbling over what’s the least amount of money we can give all these people. Even Wall St knows we need to give these people more money, the extra unemployment benefits have been keeping retail sales up, and keeping evictions down.
In the longer term the USD not being a reserve currency is probably good for everyone including the US.
- JPKab 6y agoAgreed. US dollar being propped up has undermined manufacturing sector by making exports artificially expensive, and imports artificially cheap.
- Avicebron 6y agoBut does this indicate we need to fix the "undermined" part of the manufacturing sector rather than ceding the power of having the reserve currency to another power?
- prionassembly 6y agoWhere I live, undergrads have to present their capstone graduation paper to a committee, much like PhD students do. I've had a handful opportunities to ask, after a presentation about this very subject: why is this bad? I never got good answers. Maybe the PhDs did, but PhD committees draw from their own discipline.
- thoughtstheseus 6y agoIt’s not bad in the short-term. You trade stamped paper for complex goods and services. The problem is when people don’t want to make that trade anymore. One side is left with the ability to print stamped paper, the other has the means of production for goods and services desired. The U.S. “allowed” many domestic industries and supply chains to leave/fail/etc. because it was “better” to print paper.
- virissimo 6y agoI don't agree at all that the EU has handled the pandemic well. See https://ourworldindata.org/coronavirus-data-explorer?zoomToSelection=true&country=USA~EuropeanUnion~CHN~KOR~JPN~TWN&deathsMetric=true&totalFreq=true&aligned=true&perCapita=true&smoothing=0&pickerMetric=location&pickerSort=asc https://ourworldindata.org/coronavirus-data-explorer?zoomToS... for a comparison of the US, EU, and East Asia (a region that could reasonably be characterized as handling the pandemic well) by linear per capita confirmed COVID-19 deaths.
- erentz 6y agoTalking about economic response to the pandemic here.