Dollar at all time low against Euro

[Idaho]

So does this mean that Europe is winning the struggle for economic supremacy?

With the US economy looking like it's going to nose-dive, is it the time where Europe provides the stable spring board for the new economies of China and India to move into pole position?

[pevergreen]

The AUD is also at a 23 year high.

Still not as good as the Euro though, and with the probable change in governemnt in a few weeks, our economy could take a downturn.

Im of the opinion the australian economy is about to die.

But as for the Chinese economy, it needs to stabalise before it can be revolutionary IMO.

[Fragony]

Since when is a cheap dollar good for us?

[LittleGrizzly]

i now currency being worth little makes exports more likely and gives you a nice exchange rate for going on holiday ect. but what are the downsides ?

[Fragony]

i now currency being worth little makes exports more likely and gives you a nice exchange rate for going on holiday ect. but what are the downsides ?

Inflation, but america can just lower the whatsitcalled, can basicly keep printing them. And if it falls, so do we.

[CBR]

Since when is a cheap dollar good for us?
When oil is $90+/barrel


CBR

[Beirut]

The :canada: dollar is worth $1.07 US.

I think I'm going to buy Vermont. :sunny:

[Husar]

i now currency being worth little makes exports more likely and gives you a nice exchange rate for going on holiday ect. but what are the downsides ?
It actually gives you a very bad exchange rate for going on holidays.

1 US Dollar = 0.68910 Euro

1 Euro (EUR) = 1.45117 US Dollar (USD)

That's the current exchange rate from here (http://www.oanda.com/convert/classic?lang=en), as you can see, you will get only 0.68 Euros for one Dollar. Considering that what costs 200$ in the US, costs 200€ here very often, sometimes even more, you end up with little money on a trip to Europe.

[LittleGrizzly]

you end up with little money on a trip to Europe.

but if im already in europe i'd have a lovely handful of dollars :beam: my friends going outto us soon as well lucky bast

[Idaho]

The reason the dollar is so low is that very few investors will touch it with a bargepole. The US economy is about to go tits-up for a long recession. The general opinion is that there will be a world slow-down, but perhaps Europe will have a slower and softer down-turn.

[Fragony]

Keeping it low has always been a concious strategy, mercentalism thingy.

[Papewaio]

That's a dangerous game to play. You can either have small natural corrections over time or something large breaks... interference with supply and demand (which the value of the dollar is about) tends to result in the second version.

The US dollar will be truly in unstable ground when oil contracts are signed off in the Euro...

[Idaho]

That'll be the shift that shows the US century is truely at an end - when oil is quoted in Euros rather than dollars.

[Fragony]

Yeah it is but we have all the reason to nurse it, China owns how much? 800 billion dollar? Netherlands about 300 billion, same with England Germany and France we can't allow it to fall. No fun for the american common man who will feel it in his wallet but America being the economic playground it is.. It would be bad but it isn't going to happen.

[Rodion Romanovich]

So does this mean that Europe is winning the struggle for economic supremacy?

No, Europe is heading towards a nose-dive too, but perhaps scheduled a bit later than the American one. China is going to win the struggle, as long as both America and Europe remain so self-destructive by allowing extreme growth of corruption and expenses at a time when income is expected to decrease by some percent.

[Crazed Rabbit]

The reason the dollar is so low is that very few investors will touch it with a bargepole. The US economy is about to go tits-up for a long recession. The general opinion is that there will be a world slow-down, but perhaps Europe will have a slower and softer down-turn.

LoL!

CR

[Mikeus Caesar]

Being British is always cool - cheap crap can be ordered from America. It also means if you buy games over Steam like i do, you make big savings.

Orange Box (physical copy) - £35

Orange Box (over steam) - £25

[Don Corleone]

Gee Idaho, you really do have a big blindspot, where supposed bad news for the US is concerned. Why would the Federal Reserve pour gas on the fire, lowering interest rates, if a weaker dollar was truly hurting the US economy right now?

What's the US's biggest economic concern right now? Oh, I don't know, a huge, massive trade imbalance with China? Oil imports? OPEC trades oil in dollars. China pegs the Yuan to the dollar so that they never feel the impact of their trade surplus. How do we slow down both drags on our economy? Discourage exporters from shipping goods to your country. How do we do that? Allow our currency value to fall.

This comes up every 10 or 12 years or so. The last time the U.S was going 'tits up' as Idaho says, and all you little Euros were smugly breaking out victory champagne was 1993, and we were doing it to discourage Japanese real estate speculation. Now granted, it was a bit painful for us... but how's that Japanese real estate speculation going? How is the Japanese banking industry in general, for that matter? :skull:

[Ice]

Gee Idaho, you really do have a big blindspot, where supposed bad news for the US is concerned. Why would the Federal Reserve pour gas on the fire, lowering interest rates, if a weaker dollar was truly hurting the US economy right now?

What's the US's biggest economic concern right now? Oh, I don't know, a huge, massive trade imbalance with China? Oil imports? OPEC trades oil in dollars. China pegs the Yuan to the dollar so that they never feel the impact of their trade surplus. How do we slow down both drags on our economy? Discourage exporters from shipping goods to your country. How do we do that? Allow our currency value to fall.

This comes up every 10 or 12 years or so. The last time the U.S was going 'tits up' as Idaho says, and all you little Euros were smugly breaking out victory champagne was 1993, and we were doing it to discourage Japanese real estate speculation. Now granted, it was a bit painful for us... but how's that Japanese real estate speculation going? How is the Japanese banking industry in general, for that matter? :skull:

Don, Don....

Stop trying to use logic. LOGIC IS BAD.

Remember, when one country's currency is worth more than then another's, it is a direct correlation to economic growth.

That's probably why the pound has always been worth more than the dollar. Great Britain has always had a superior economy.

Can you atleast try to make up these accusations with facts?

I'm going to admit, I'm not entirely sure what the full effects of a weak dollar will be, but exchange rates are a very complex thing and trying to simplify them like this is ridiculous.

I can tell you one thing for sure. Traveling to Europe right now if you are an American, blows. Save your money and travel domestically.

[Incongruous]

Gee Idaho, you really do have a big blindspot, where supposed bad news for the US is concerned. Why would the Federal Reserve pour gas on the fire, lowering interest rates, if a weaker dollar was truly hurting the US economy right now?

What's the US's biggest economic concern right now? Oh, I don't know, a huge, massive trade imbalance with China? Oil imports? OPEC trades oil in dollars. China pegs the Yuan to the dollar so that they never feel the impact of their trade surplus. How do we slow down both drags on our economy? Discourage exporters from shipping goods to your country. How do we do that? Allow our currency value to fall.

This comes up every 10 or 12 years or so. The last time the U.S was going 'tits up' as Idaho says, and all you little Euros were smugly breaking out victory champagne was 1993, and we were doing it to discourage Japanese real estate speculation. Now granted, it was a bit painful for us... but how's that Japanese real estate speculation going? How is the Japanese banking industry in general, for that matter? :skull:

Where is all this hate coming from Don?
I don't think anyone has been firing potshots at the U.S.A, this wont end up being another case of anti-americanism will it?

[Ice]

Where is all this hate coming from Don?
I don't think anyone has been firing potshots at the U.S.A, this wont end up being another case of anti-americanism will it?

From my knowledge, Idaho has a past history of being blatantly Anti-American.

Again, just from my personal knowledge.

[English assassin]

Where is all this hate coming from Don?
I don't think anyone has been firing potshots at the U.S.A, this wont end up being another case of anti-americanism will it?

Hmm, dunno, Idaho is one of my favourite iconoclasts, (mwah, we prefer to call it free thinking rather than anti american) but I think Don called this one about right. Cheap dollar doesn't equate to economic victory for the Eurozone in any way that I understand. The "downside" is not being able to sell anything to America. Its another form of protectionism, really.


Traveling to Europe right now if you are an American, blows. Save your money and travel domestically.

Case in point.

[Roman_Man#3]

The :canada: dollar is worth $1.07 US.

I think I'm going to buy Vermont. :sunny:

YEAH!!!!

Canada always gets forgotten, which is odd considering it's the best country.

[Louis VI the Fat]

Meh, oil prices are in $$, so good news for us. And I have already planned a holiday in America next September, so that's more good news.

It is bad news for European exports. But nothing special. As for any doom scenarios: maybe.
Let's hope the devaluation really stimulates the American economy. If not, than the lowered interest rates will only fuel inflation and further weaken the dollar. And confidence in the dollar. Combine that with the troubles in the housing and credit market, and there will be a problem. Which is bad news for Europe, any recession will hit as hard here as across the Atlantic.
As to the real gloom and doom scenario's (Iraq, debt, deficit spending, Dollar collapse, skyrocketing oil prices): well, I, for one, welcome our new Chinese overlords.

[Don Corleone]

Where is all this hate coming from Don?
I don't think anyone has been firing potshots at the U.S.A, this wont end up being another case of anti-americanism will it?


First, I didn't say anything that stated or implied I hated anyone. I like Idaho. He makes good points, which is more than I can say for some people. Just because I disagree with him vehemently at times doesn't mean that I dislike him. I bet he'd be a great guy to have a pint or 2 with and get red-faced with in real life.

Second, what I said, if you'll read, is that Idaho was giddy about the US taking a downturn, an area for which he has a blindspot. As proof of my statement, I offer the following:


With the US economy looking like it's going to nose-dive, is it the time where Europe provides the stable spring board for the new economies of China and India to move into pole position?

As I read it, the US will tumble into 3rd world nationhood in Idaho's eyes, leaving Europe, China and India to dominate the world economic sphere. (Btw, Idaho, where does Japan lie in your fantasy? Buried with us?)


The reason the dollar is so low is that very few investors will touch it with a bargepole. The US economy is about to go tits-up for a long recession. The general opinion is that there will be a world slow-down, but perhaps Europe will have a slower and softer down-turn.
Translation: The most highly valued security exchanges in the world are being shunned, as are investments being traded there. In truth, it is the U.S.'s overindulge in treasury securities that's driving the dollar down, not a mass exodus from our financial markets.

Now, Bopa, I conclude with simple question. Can you explain to us where in my post, this one or the first, that you see the hatred you accuse me of?

[Don Corleone]

Hmm, dunno, Idaho is one of my favourite iconoclasts, (mwah, we prefer to call it free thinking rather than anti american) but I think Don called this one about right. Cheap dollar doesn't equate to economic victory for the Eurozone in any way that I understand. The "downside" is not being able to sell anything to America. Its another form of protectionism, really.


It is, but not against you guys. I think its an attempt to force China to stop tying their currency to ours, to allow us a chance to balance out our trade deficit. I'm not sure how it will work out. With Japan, you had a large base of domestic (in Japan) investors, that were demanding exporters bring their profits home. With China, I don't think there will be the same push. They can ride out the devaluation as long as we can, possibly longer.

On the plus side, I'm actually really happy to see it. If this doesn't cure the average American's addiction to credit cards, nothing will. We should finally start to see a shift up in domestic savings. Let the industry and government spending carry the economy for a while. God knows, the consumer economy has been the gas in our engine for too long. We need to pay down personal debt for a while.

[Don Corleone]

I'm going to admit, I'm not entirely sure what the full effects of a weak dollar will be, but exchange rates are a very complex thing and trying to simplify them like this is ridiculous.

I can tell you one thing for sure. Traveling to Europe right now if you are an American, blows. Save your money and travel domestically.

-Any country that doesn't similarly devalue their currency will see their exports rise in cost in American markets. What's more, foriegn exporters will see their profits shrink when they try to convert the devalued dollars back to their higher currency.

-Credit markets will begin to tighten here at home, which should lead to a slowdown in domestic consumer spending as a whole, but also a decrease in personally held debt (some good, some bad).

-The US will find it somewhat harder to meet foreign obligations (not just interest payments, but things like leases on real estate, etcetera).

But the desired affect, a shift in the trade defecit with China.... I'm not so sure that will happen. China makes things we want... trinkets made cheaply. Our domestic manufacturing base is more geared towards high value products, something that Chinese consumers just aren't demanding. Besides, we're not going to out-protectionist the Chinese. You're not allowed to actually sell things to them directly. You have to set up a hybrid company with a domestic company, and the domestic Chinese company has to have a 51% or more stake. That's where companies like Putien & TD-Tech come from. Motorola and Ericsson and Nokia aren't allowed to sell into China directly.

[Papewaio]

It will give rise to the Ugly European tourist traveling to the US. :laugh4:

Never as bad as the Aussie tourists though. :embarassed:

[Don Corleone]

It will give rise to the Ugly European tourist traveling to the US. :laugh4:

Never as bad as the Aussie tourists though. :embarassed:

I thought that Europeans (and Aussies) were afraid to travel to the US, because of all the shootings in our streets. :laugh4:

[PanzerJaeger]

For comparison purposes..


Country GDP/ Real Growth Rate/ Per Capita


European Union 11,650/ 2.4/ 26,900

China 7,262/ 9.1/ 5,600

United States 11,750/ 4.4/ 40,100

France 1,737/ 2.1/ 28,700

Germany 2,362/ 1.7/ 28,700

United Kingdom 1,782/ 3.2/ 29,600

Zimbabwe 24/ (-)8.2/ 1,900

Tuvalu 0.01/ 3/ 1,100

http://education.yahoo.com/reference/factbook/countrycompare/gdp/1a.html


I honestly don't know what to think about the falling value of the dollar.. which doesn't say much for my business classes.

What Don said seems to make sense though. The Fed is certainly not comprised of idiots.

With fairly equal GDPs and economic growth rates of 4.4 to 2.4, Im not sure how the Euro is winning the battle for economic supremacy.

[Samurai Waki]

This actually makes a lot of sense. Don has hit on most of what I think the Feds want out of the devaluation.

[Ser Clegane]

For comparison purposes..


Country GDP/ Real Growth Rate/ Per Capita


European Union 11,650/ 2.4/ 26,900

China 7,262/ 9.1/ 5,600

United States 11,750/ 4.4/ 40,100

France 1,737/ 2.1/ 28,700

Germany 2,362/ 1.7/ 28,700

United Kingdom 1,782/ 3.2/ 29,600

Zimbabwe 24/ (-)8.2/ 1,900

Tuvalu 0.01/ 3/ 1,100

http://education.yahoo.com/reference/factbook/countrycompare/gdp/1a.html


Not directed at PJ but more venting into the general direction of sources on the internet:
Is it so difficult to present data in a less sloppy way? Am I blind or does the table lack any hint at what year the data is referring to?
If I look at wikipedia (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28real%29_growth_rate) a real growth rate of 3.3% is listed for the US in 2006 and 2.9% for the EU.
The numbers apparently come from the Economist Intelligence Unit (http://www.viewswire.com/index.asp?layout=VWAllCountryVW3&rf=0) which gives the following 2007+2008 growth estimates/forecasts:

USA - 2007: 1.8%; 2008: 1.2%
EU - 2007: 2.7%; 2008: 2.4%

It should benoted though that I did not see at which specific date these forecasts were published (and I should also add that I had the pleasure to work with EIU commodity price forecasts, which were ... uhm ... not of the best quality to say the least).

On the overall issue - I think it is in the interest of the EU and the US to have exchange rates fluctuate within a certain bandwidth without any of the two currencies getting to stromg or two weak. Currently we seem to get to the end of such a band and it remains to be seen how healthy a further decline of the USD will be for the global economy.
Given the current structure of the global economy we should not be interested in healthy US and EU economies on either side of the pond and I am certainly not looking forward to a potential longer "decline" of the US economy (considering that estimating long-term trends has a lot of crystal-ball-reading anyway :shrug:)

[HoreTore]

One of the advantages of living in an oil-country is that whenever your economy goes down, ours goes up! The downside, however, is that when you're going up, we're going down...

[Tribesman]

Am I blind or does the table lack any hint at what year the data is referring to?

It doesn't lack it , the years used for the data (depending on the country) vary from 1998-2006 .
The figures from that source are almost identical to the ones you post from Wiki ...well apart from the fact that the 2.9 is US and the 3.3 is EU (both 2006)...so by almost identical I mean opposite .

[Ser Clegane]

It doesn't lack it , the years used for the data (depending on the country) vary from 1998-2006 .
The figures from that source are almost identical to the ones you post from Wiki ...well apart from the fact that the 2.9 is US and the 3.3 is EU (both 2006)...so by almost identical I mean opposite .

But where is the year actually mentioned in the table? Is the "World factbook" they are referring to the CIA Factbook? I checked their website, they still list the 2006 numbers for EU and the US as "estimates" which would explain the difference to EIU - but that still differs from the 4.4% for the US and 2.4% for the EU given in the Yahoo table.

Perhaps I am just getting a bit too anal about that issue... :beam:

[Tribesman]

But where is the year actually mentioned in the table? Is the "World factbook" they are referring to the CIA Factbook?
Look at the very very last line on Panzers link . It gives the year and the source , though the source then (as it does now) uses a mixture of different years figures in the same tables , and heavily relies on *estimates .

So to sum up , it is a table based on a table that uses different years presented in the same years issue and has large numbers of estimates (also from various years)...which means for a factual representtion and corelation of figures the "factbook" isn't very factual (in a useful context) .

[Ser Clegane]

Look at the very very last line on Panzers link . It gives the year and the source

Ah ... found it
:bow:

(apparently I am only almost blind).

Well, Yahoo might at least consider updating the table a little bit as they are using the CIA Factbook from two years ago as a source...

EDIT: And no matter what source they use, Yahoo should still list the respective years in the table. :whip:

[Tribesman]

And no matter what source they use, Yahoo should still list the respective years in the table.
But if they did that people would look at it and go "this is rubbish it uses different years in the same table" :2thumbsup:

[Geoffrey S]

Meh, in the nineties the Dollar was supposedly losing to the Euro; but longer term, as long as the US has the strongest economy it's going to bounce back, again and again, and the Feds are perfectly aware of that. Short term, perhaps a few local issues, but nothing the US hasn't been able to handle before. Only thing that really needs sorting out is the massive debt, but I'd be very surprised if the next administration won't make short work of tackling that like last time.

[Rodion Romanovich]

I thought that Europeans (and Aussies) were afraid to travel to the US, because of all the shootings in our streets. :laugh4:
Yes, I'm even afraid of buying American food, in case there's lead in it :grin: :wink:

[Tribesman]

Meh, in the nineties the Dollar was supposedly losing to the Euro;
In the nineties ??????


Yes, I'm even afraid of buying American food, in case there's lead in it
No that is only American food that has been outsourced to China:laugh4:

[IrishArmenian]

And your nearly loosing to the Dram! Nearly meaning it is only ~324 dram to the dollar.

[SwordsMaster]

That's where companies like Putien & TD-Tech come from. Motorola and Ericsson and Nokia aren't allowed to sell into China directly.

Oh, but Ericsson is Swedish, and Nokia is Finnish, so I can't see how they can't sell to China, specially since both of them do already and have huge interests in the Far East and Southeast Asia.

[Don Corleone]

Oh, but Ericsson is Swedish, and Nokia is Finnish, so I can't see how they can't sell to China, specially since both of them do already and have huge interests in the Far East and Southeast Asia.

Right. The Chinese aren't anti-American in their protectionism, they're anti-non-Chinese. In order for a company based anywhere in the world (including Panasonic or NEC) to sell products in China, they have to setup a legal corporation in which they partner with a Chinese company that's in the same business (for wireless communications electroncis, you're talking Huawei and ZTE). The Chinese partner has to have a 51% controlling interest. When you see actual Motorola or Ericsson facilities in China, they're for export only. They can't sell a Nokia router in China, but they can manufacture them for export (back to Finland, or to some 3rd company).

As long as they can continue to get away with it, China's actually being pretty smart about the whole thing. And it's not like they don't have valid reasons for doing what they're doing. They watched what happened in the mid to late 90s in Indonesia and Malaysia very carefully, and they're not going to let the same sorts of things happen to them.

As a (you're Spanish right?) Spanish company, Indra could set up a facility in China tomorrow. They could transfer their manufacturing of their satellite communications channels over there. But anything they made there, as Indra, they'd have to export back out of China (Singapore, Japan, anywhere but China). If Indra wanted to sell their products in China, they'd have to form a legal corporation with a Chinese company and give the Chinese partner a controlling interest. Then Indra could sell their products in China.

[Geoffrey S]

In the nineties ??????
D'oh. I meant in general and in particular against European currencies. Please forgive that slipup.

[Don Corleone]

D'oh. I meant in general and in particular against European currencies. Please forgive that slipup.

Right. Don't you guys remember all the boasting about the Deutschemark, that even reunification couldn't halt its climb against the dollar?

[SwordsMaster]

Right. The Chinese aren't anti-American in their protectionism, they're anti-non-Chinese. In order for a company based anywhere in the world (including Panasonic or NEC) to sell products in China, they have to setup a legal corporation in which they partner with a Chinese company that's in the same business (for wireless communications electroncis, you're talking Huawei and ZTE). The Chinese partner has to have a 51% controlling interest. When you see actual Motorola or Ericsson facilities in China, they're for export only. They can't sell a Nokia router in China, but they can manufacture them for export (back to Finland, or to some 3rd company).

As long as they can continue to get away with it, China's actually being pretty smart about the whole thing. And it's not like they don't have valid reasons for doing what they're doing. They watched what happened in the mid to late 90s in Indonesia and Malaysia very carefully, and they're not going to let the same sorts of things happen to them.

As a (you're Spanish right?) Spanish company, Indra could set up a facility in China tomorrow. They could transfer their manufacturing of their satellite communications channels over there. But anything they made there, as Indra, they'd have to export back out of China (Singapore, Japan, anywhere but China). If Indra wanted to sell their products in China, they'd have to form a legal corporation with a Chinese company and give the Chinese partner a controlling interest. Then Indra could sell their products in China.

Ok, I see what you mean.

I was referring more to the service area of Ericsson for example. I know a few people that work for Ericsson and have spent long periods stationed there on different projects. Nothing to do with manufacturing, more engineering and consulting type stuff though.

Huawei is actually one of Ericsson's biggest competitors in quite a few markets, not just in China...

So you're right, the chinese are playing it very smart.

[Geoffrey S]

Right. Don't you guys remember all the boasting about the Deutschemark, that even reunification couldn't halt its climb against the dollar?
Remember probably isn't quite the right word in my case, but yes:

Meh, in the nineties the Dollar was supposedly losing to the Euro European currencies; but longer term, as long as the US has the strongest economy it's going to bounce back, again and again, and the Feds are perfectly aware of that. Short term, perhaps a few local issues, but nothing the US hasn't been able to handle before. Only thing that really needs sorting out is the massive debt, but I'd be very surprised if the next administration won't make short work of tackling that like last time.

[PanzerJaeger]

Not directed at PJ but more venting into the general direction of sources on the internet:
Is it so difficult to present data in a less sloppy way? Am I blind or does the table lack any hint at what year the data is referring to?
If I look at wikipedia (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28real%29_growth_rate) a real growth rate of 3.3% is listed for the US in 2006 and 2.9% for the EU.
The numbers apparently come from the Economist Intelligence Unit (http://www.viewswire.com/index.asp?layout=VWAllCountryVW3&rf=0) which gives the following 2007+2008 growth estimates/forecasts:

USA - 2007: 1.8%; 2008: 1.2%
EU - 2007: 2.7%; 2008: 2.4%



Ugh.. I guess we're losing then. 1.2% is pathetic. Sorry for the bad link.. :shame:

[Don Corleone]

Ugh.. I guess we're losing then. 1.2% is pathetic. Sorry for the bad link.. :shame:

Well, no. But it does tell the same tale that our currency values do on the surface, that our economic growth is plateuing ahead of Europe's. That's understandable, for a variety of reasons. Even annual GDP growth is not always a great indicator of the health of an economy. If you don't believe what I'm saying, look up the annual GDP growth of the US economy from 1928-1929. Personally, when it comes to GDP growth, normalized for inflation, I think 3 year running averages make more sense. Makes things like real-estate booms (or busts) flatten out and tells a better story about the overall soundness of an economic system.

[Xiahou]

Ugh.. I guess we're losing then. 1.2% is pathetic. Sorry for the bad link.. :shame:
I wouldn't get too excited about those figures either. They're just forecasts and are often wrong. Show me the hard facts instead. The US economy grew at 3.8% in the second quarter of 2007 after a weak 1st quarter and the housing slump, so far, hasn't been as devastating as many thought it would be. I wouldn't be surprised at all to see the final number for 2007 significantly higher that that projection. link (http://www.bloomberg.com/apps/news?pid=20601103&sid=alO23IFA2mCM&refer=us)

[Ser Clegane]

I wouldn't get too excited about those figures either. They're just forecasts and are often wrong.

Indeed forecasts are just ... well ... forecasts. They certainly reflect a certain sentiment and of course (almost) everybody likes forecasts as they create the illusion that you can develop solid plans for the future - but in the end GDP and similar forecasts are (at least in my experience) not much more reliable than weather forecasts that might be reasonably reliable for the next day but then quickly seems to deteriorate into guessing and/or extrapolation (at least they seem to have the same accuracy as guessing ~;))

[Productivity]

Shamelessly stolen from a blog I read, potential troubles ahead for the USD, as supermodels flee (http://www.bloomberg.com/apps/news?pid=20601087&sid=aCs.keWwNdiY&refer=home) the USD for the Euro.

Or maybe not. (http://www.cnbc.com/id/21641711)

*of all the strange things to find on Cato...

[Idaho]

I would apologise for provoking a reaction - but as you all know, I like a healthy, hearty debate ;)

The American century will end at some point, it's a question of when. Just as the British century did, and the Spanish. Some of those lasted longer than a century of course...

What I find interesting is predicting or looking back to see the zenith.

I have always thought the first gulf war was the US zenith, and what we are seeing subsequently is the steady and inevitable decline. Europe has made a late, and fairly mild mannered, bid at the top slot by consolodating it's individual economies - but even with the internal divisions, it'll never do it. The best it can hope for is to maintain steady growth while maximising it's ties with the old power (US) and the new powers (India and China).

As to Japan - and interesting one. I think Japan is to the US like Portugal was to Spain in the 16th century.

[Papewaio]

If it was the NATO economic block then they could go toe to toe with China for the next couple of generations.

Economic power is approximately equal to number of people x education.

China has a lot of people but not a very high base education. The valuable expensive stuff in the economy is either coming from the educated sectors (trades included) or the entertainment sector. Education will take a while to grow. I think that the Education sector is easier to grow in comparison to outgrowing the number of people in China or India. And education, and more importantly inventions are easily spread from country to country.

So China has the advantage of being able to gain IP (legit or not) far more easily then the rest of the world can increase in population.

=][=

I do think that there 51% company ownership should be reciprocated around the world and any Chinese companies wishing to sell overseas should do so through a joint venture that is owned by at least 51% of the local countries company (and one that is not expat Chinese by the by).