If Euro is supposed to be valued higher, why are Europeans asking for Dollars ?!

Discussion in 'Economy' started by 52ndStreet, Nov 16, 2011.

  1. 52ndStreet
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    52ndStreet VIP Member

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    Can some explain to me now that their is this debt crisis in Europe, why are many european economist and central bankers asking for U.S. dollars to prop up the Euro.?
     
  2. Vengeance
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    Vengeance Romans 12:19

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    This is a short and neccesarily undetailed explanation but hopefully it'll be helpful-

    1) To increase the pure volume of currency in the system as digital money is erased in bad debts.

    2) The US dollar is the worlds reserve currency, see Invetopedia link for a brief explanation:

    Reserve Currency Definition

    3) With a weakening Euro, USD are widely anticipated to increase in relative strength or more bluntly, to depreciate less and be more redeemable in the long term. This is a situation that is purely evaluated moment to moment and changes continually as conditions change.
     
    Last edited: Nov 16, 2011
  3. Toro
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    They aren't trying to prop up the price of the euro. What they want is to be able to meet their dollar liabilities of European banks and corporations. The Fed executes a dollar for euro currency swap with the ECB who then supplies dollars to meet the liabilities. The swap fixes the euro/dollar price, and the swap is unwound and dollars paid back to the Fed with the Fed receiving an interest rate from the ECB. This is done to contain a liquidity crisis, which could take down European, and thus most likely American banks.
     
    Last edited: Nov 16, 2011
  4. 52ndStreet
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    52ndStreet VIP Member

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    I hear talk of the Euro replacing the dollar , as the worlds "reserve" currency?.
    How could this happen, with so many European countries carry so much debt, and
    unable to pay back loans. And talk of a Euro collasp.

    People are still asking for U.S. dollars, over the Euro as a hedge against a Euro collasp.!?

    Whats going on here.?
    Why is the U.S. dollar still wanted by many throughout the free, and unfree world.?
    Is the U.S. Dollar still king of currencies?
     
    Last edited: Nov 16, 2011
  5. Vengeance
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    Vengeance Romans 12:19

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    In my opinion, the Euro is not a candidate to replace the dollar, now less than ever. There has been lots of talk of replacing the USD as reserve currency, even some notable attempts made so far with no good results for those who tried it. One of the prime contenders at present is a unit called the SDR (Special Drawing Rights) issued by the International Monetary Fund, Google it for a far more detaled description than I could possibly give you.

    If you're interested in the mechanics of the dollar in particular and money in general, I reccomend to you (or anyone) that they spend a few minutes watching any of the money related G Edward Griffin videos on Youtube and if that piques your interest, pick up a copy of his book The Creature From Jekyll Island- A complex but fascinating read.
     
    Last edited: Nov 16, 2011
  6. 52ndStreet
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    52ndStreet VIP Member

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    My question also is, if the Euro, and Euroup were in this much trouble, why would they even suggest replacing the U.S. dollar with the Euro?, as the worlds reserve currency?.
    I will check into your recommendations, the book and the you tube video.
     
  7. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    The European Union was just away to implode all those countries economies and solidify them under one Global Bank.
    The aforementioned SDR is a Fiat currency as well because it will be printed in massive numbers as is Dollars are here and backed by nothing.
    It's just a trick to bankrupt countries and get them to give up their sovereignty (independence) to International Bankers.

    The best thing to do with a Huge Debt that cannot be paid off is to write it off. The International Bankers don't want that because they'll take the hit. They want YOU and ME to pay for THEIR LOSSES.

    They created 1.5 Quadrillion (1,500 Trillion) in derivative debt and now they want us to pay for it? How do they do that?: They get paid off politicians like Papandreous in Greece to sign the country onto that Banker debt. The crooked politicians put tax hikes and austerity measures in place so that they can pay off the banks! But the debt is mathematically impossible to pay off so what will the bankers demand? Everything!

    Do you see why we must oppose both tax hikes and benefits cuts? The cuts won't go to pay off OUR NATIONAL DEBT, no! It'll go to pay off the International Bankers Debt! We'll be in debt bondage for the rest of our lives!

    Are you beginning to understand why the Gov't never seems to listen to the people? Do you see why the Courts and our Politicians always seem to side against us, the US Citizens whom they are suppossed to be serving? It's because they're bought and paid for! They're totally corrupted!

    But they are Masters at playing us off against each other to keep us distracted aren't they?
     
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  8. 52ndStreet
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    So this SDR IMF currency, when is it supposed to be introduced to the world, what happens to the U.S. dollar after this SDR currency is introduced.?What happens to the Euro currency after this SDR currency is intorduced.?
     
  9. Toro
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    The SDR is not a currency. It is a basket of currencies of which the US dollar is the largest component. It has been around for decades.
     
  10. Vengeance
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    Vengeance Romans 12:19

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    That is correct. What is different is it's proposed usage as a form of currency , the wiki touches on this point under Alternative to US dollar

    Special Drawing Rights - Wikipedia, the free encyclopedia
     
    Last edited: Nov 17, 2011

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