4 ms·

Every article about the EUR/USD ratio talks about gas prices. But the current rise of the Dollar started 15 years ago. Over these 15 years, it has become more

by mg 4y ago

Every article about the EUR/USD ratio talks about gas prices. But the current rise of the Dollar started 15 years ago. Over these 15 years, it has become more and more apparent, that software is eating the world. And the US keeps extending their lead in this area. I would not be surprised if that contributes to a long term trend in the EUR/USD ratio. (I'm sitting in a cafe in Germany, writing this text on laptop made by a US company, running an operating system maintained in the USA, into a browser made in the USA and posting it to a website of a US company.)

ladyanita22 4y ago
I'd bet it has much more to go with the US shale oil industry. In Europe you can't do fracking
- cloutchaser 4y ago
  Its both really. In Europe you can’t do innovation, or it’s an order of magnitude more expensive.
  - FranzFerdiNaN 4y ago
    You mean you cant do innovation without dumping the cost on society. Someone is paying for the price difference.
    - simonh 4y ago
      Nobody is willing to pay the price difference, that's why scaling up big tech in Europe natively doesn't happen. If someone were paying it, then we would have big tech natively in Europe, and we haven't.
      - ElCheapo 4y ago
        Could you give an example of a technology that needs to be scaled up in Europe?
        simonh 4y ago
        Competitors to Microsoft, Apple, Google, Facebook, Amazon/AWS, Netflix. The only thing we have that's even vaguely comparable that started in Europe is Spotify and it's 1/3 the size of Netflix, which itself is the smallest of the US tech giants.
        ElCheapo 4y ago
        You have listed many companies that do many different things so I don't really know what you mean. But in any case, how would a natively European competitor benefit Europe? Are we talking about money, jobs or what exactly?
        simonh 4y ago
        Money, jobs, IP, skills, influence. As I pointed out in another thread, Europe loses a lot of top IT/CS graduates to the US every year because they can earn 3x to 5x the money.
    - cloutchaser 4y ago
      There's a lot of examples of tech unicorns that have no negative effect on society, yet were all created in either the US, China or the UK. Your argument is just plain wrong and can be disproven with a few examples.
  - simonh 4y ago
    You can do innovation, the problem is scaling up to the mass market. The EU is supposed to be a massive single market at scale to rival the US and China, and in some ways it is, but it still has a fragments cultural and legal landscape. The gravitational pull of the US on European dev talent is really hard to ignore. Every year the cream of European IT graduates move to the US because that's where the big companies and top paying jobs are. It's a powerful self-reinforcing feedback loop.
    - orangepurple 4y ago
      On what visa do these students move and work on in the US? The US visa process is extremely onerous
      - simonh 4y ago
        There are 65k H1-B visas issued every year. The FAANG all have offices in Europe so they can put grads to work there until the visa comes through. Of course some companies are ramping up their dev capacity in Europe due to the shortage of grads in the US, that's why Facebook announced thousands of the devs they're hiring for the Metaverse will be in Europe.
      - shagie 4y ago
        I believe it would be the H1-B. Australia has the E-3 visa and Canada and Mexico have the TN visa.
      - atwood22 4y ago
        Many people come over on an L1 visa. A U.S. company will higher a foreign worker, have them work in a foreign office for one year, and then they qualify for an L1 visa.
    - ejanus 4y ago
      How do you break that circle?
      - JumpCrisscross 4y ago
maeln 4y ago
The trading cost of a currency is hardly impacted by one industry outperforming. Financial policies have a much stronger impact when it comes to currencies. Right now, the U.S and the E.U (and its member) are not handling the current rise in inflation the same way, after also not handling the COVID relief efforts in the same way. Just look at the graph[1] the fall of the EUR as started since January 2021. [1] https://www.xe.com/currencycharts/?from=USD&to=EUR&view=5Y https://www.xe.com/currencycharts/?from=USD&to=EUR&view=5Y
password1 4y ago
Please burst your bubble and consider that there is WAY more going on in the world than tech and software. The idea that you can point at something as complex as monetary economics and say "I know what's happening and I can trace it back to 15 years" is absurd and over-simplistic.
- YetAnotherNick 4y ago
  No big sector has seen similar level of YoY growth like tech. STOXX 600 is almost flat for last 20 years. While S and P 500 and Nasdaq rose 5-10 times over that period. While tech is not everything for the economy, it seems tech is everything for economy growth in past 30 or so years.
  - oezi 4y ago
    But stock growth and economic growth doesn't necessarily go hand in hand. Much of the stock market growth came from Central Bank policy. Stock market growth is also something that isn't necessarily benefitting the country where a stock is listed. A european investor can buy Apple stock and participate the same was an an American one.
  - cma 4y ago
    If workers get more pay, it can take from profits and share values go down, but the economy can still go up. Same if industries just gets more competitive, the economy can go way up with no change or with a loss in profit.
  - benhurmarcel 4y ago
    That tech stock growth doesn't translate to any benefit for the average citizen.
    - s1artibartfast 4y ago
      No, but it is a proxy for growth of profit, goods and services, and jobs
    - 4y ago
CaptArmchair 4y ago
No. It's a reflection of how financial markets value regional economies that use / back those currencies. Over the past 15 years, Europe experienced: * The Great Recession. * A Sovereign Debt Crisis which lasted well into 2014. * Increasing competition from new economies in Asia, mainly China. * Brexit. * The Pandemic. * And now an unprecedented energy crisis. Also, the EU had expanded swiftly in the '00s allowing many of the former Eastern Bloc countries to join the union. Arguably, one does not simply integrate national economies in a single market zone under a single currency. It takes years to align towards common policies, while dealing with the many challenges posed by cultural and political differences. Let's not forget that the initial raison d'etre of the EU - such as it was conceived by Schumann and Churchill - was to ensure sustained stability and peace across the continent in the wake of World War II. In a way, the EU has been instrumental in protecting the continent from worse consequences given the turbulent waters the bloc has navigated over the past 15 years. But it hasn't come out of all of that unscathed. In order for the EU to recover, it needs to invest in infrastructure and people. A massive challenge which is encumbered by the significant debts most European nations have been shouldering thus far. You, on the other hand, using American technology to connect with the world and assert that "software is eating it", well, that's - historically - just one expression of American hegemonic power after World War II. In regard to the EU that's expressed military - through NATO - and economically through countless trade agreements which have led to tight integration (see: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en https://policy.trade.ec.europa.eu/eu-trade-relationships-cou...). Proliferation of US technology across the continent is just one expression of that relationship between the EU bloc and the US.

by mg 4y ago

ladyanita22 4y ago

I'd bet it has much more to go with the US shale oil industry. In Europe you can't do fracking

cloutchaser 4y ago
Its both really. In Europe you can’t do innovation, or it’s an order of magnitude more expensive.
- FranzFerdiNaN 4y ago
  You mean you cant do innovation without dumping the cost on society. Someone is paying for the price difference.
  - simonh 4y ago
    Nobody is willing to pay the price difference, that's why scaling up big tech in Europe natively doesn't happen. If someone were paying it, then we would have big tech natively in Europe, and we haven't.
    - ElCheapo 4y ago
      Could you give an example of a technology that needs to be scaled up in Europe?
      - simonh 4y ago
        Competitors to Microsoft, Apple, Google, Facebook, Amazon/AWS, Netflix. The only thing we have that's even vaguely comparable that started in Europe is Spotify and it's 1/3 the size of Netflix, which itself is the smallest of the US tech giants.
        ElCheapo 4y ago
        You have listed many companies that do many different things so I don't really know what you mean. But in any case, how would a natively European competitor benefit Europe? Are we talking about money, jobs or what exactly?
        simonh 4y ago
        Money, jobs, IP, skills, influence. As I pointed out in another thread, Europe loses a lot of top IT/CS graduates to the US every year because they can earn 3x to 5x the money.
  - cloutchaser 4y ago
    There's a lot of examples of tech unicorns that have no negative effect on society, yet were all created in either the US, China or the UK. Your argument is just plain wrong and can be disproven with a few examples.
- simonh 4y ago
  You can do innovation, the problem is scaling up to the mass market. The EU is supposed to be a massive single market at scale to rival the US and China, and in some ways it is, but it still has a fragments cultural and legal landscape. The gravitational pull of the US on European dev talent is really hard to ignore. Every year the cream of European IT graduates move to the US because that's where the big companies and top paying jobs are. It's a powerful self-reinforcing feedback loop.
  - orangepurple 4y ago
    On what visa do these students move and work on in the US? The US visa process is extremely onerous
    - simonh 4y ago
      There are 65k H1-B visas issued every year. The FAANG all have offices in Europe so they can put grads to work there until the visa comes through. Of course some companies are ramping up their dev capacity in Europe due to the shortage of grads in the US, that's why Facebook announced thousands of the devs they're hiring for the Metaverse will be in Europe.
    - shagie 4y ago
      I believe it would be the H1-B. Australia has the E-3 visa and Canada and Mexico have the TN visa.
    - atwood22 4y ago
      Many people come over on an L1 visa. A U.S. company will higher a foreign worker, have them work in a foreign office for one year, and then they qualify for an L1 visa.
  - ejanus 4y ago
    How do you break that circle?
    - JumpCrisscross 4y ago

maeln 4y ago

The trading cost of a currency is hardly impacted by one industry outperforming. Financial policies have a much stronger impact when it comes to currencies. Right now, the U.S and the E.U (and its member) are not handling the current rise in inflation the same way, after also not handling the COVID relief efforts in the same way. Just look at the graph[1] the fall of the EUR as started since January 2021. [1] https://www.xe.com/currencycharts/?from=USD&to=EUR&view=5Y https://www.xe.com/currencycharts/?from=USD&to=EUR&view=5Y

password1 4y ago

Please burst your bubble and consider that there is WAY more going on in the world than tech and software. The idea that you can point at something as complex as monetary economics and say "I know what's happening and I can trace it back to 15 years" is absurd and over-simplistic.

YetAnotherNick 4y ago
No big sector has seen similar level of YoY growth like tech. STOXX 600 is almost flat for last 20 years. While S and P 500 and Nasdaq rose 5-10 times over that period. While tech is not everything for the economy, it seems tech is everything for economy growth in past 30 or so years.
- oezi 4y ago
  But stock growth and economic growth doesn't necessarily go hand in hand. Much of the stock market growth came from Central Bank policy. Stock market growth is also something that isn't necessarily benefitting the country where a stock is listed. A european investor can buy Apple stock and participate the same was an an American one.
- cma 4y ago
  If workers get more pay, it can take from profits and share values go down, but the economy can still go up. Same if industries just gets more competitive, the economy can go way up with no change or with a loss in profit.
- benhurmarcel 4y ago
  That tech stock growth doesn't translate to any benefit for the average citizen.
  - s1artibartfast 4y ago
    No, but it is a proxy for growth of profit, goods and services, and jobs
  - 4y ago

CaptArmchair 4y ago

No. It's a reflection of how financial markets value regional economies that use / back those currencies. Over the past 15 years, Europe experienced: * The Great Recession. * A Sovereign Debt Crisis which lasted well into 2014. * Increasing competition from new economies in Asia, mainly China. * Brexit. * The Pandemic. * And now an unprecedented energy crisis. Also, the EU had expanded swiftly in the '00s allowing many of the former Eastern Bloc countries to join the union. Arguably, one does not simply integrate national economies in a single market zone under a single currency. It takes years to align towards common policies, while dealing with the many challenges posed by cultural and political differences. Let's not forget that the initial raison d'etre of the EU - such as it was conceived by Schumann and Churchill - was to ensure sustained stability and peace across the continent in the wake of World War II. In a way, the EU has been instrumental in protecting the continent from worse consequences given the turbulent waters the bloc has navigated over the past 15 years. But it hasn't come out of all of that unscathed. In order for the EU to recover, it needs to invest in infrastructure and people. A massive challenge which is encumbered by the significant debts most European nations have been shouldering thus far. You, on the other hand, using American technology to connect with the world and assert that "software is eating it", well, that's - historically - just one expression of American hegemonic power after World War II. In regard to the EU that's expressed military - through NATO - and economically through countless trade agreements which have led to tight integration (see: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en https://policy.trade.ec.europa.eu/eu-trade-relationships-cou...). Proliferation of US technology across the continent is just one expression of that relationship between the EU bloc and the US.