This entry was posted
on
Monday, October 6th, 2008 at
11:55 p10 and is filed under
Uncategorized .
You can follow any responses to this entry through the
RSS 2.0 feed.
You can leave a response, or trackback from your own site.
2 Responses to “Do you think America should join EURO Money?”
I don’t think that US will give up Dollar and adopt Euro currency.
As we all know, everything in business there is demand and supply, it be car, housing, product, etc. Currency has its own demand and supply as well. The most imperative reason for the decrease value of Dollar is high debt of the U.S. government.
If a person has high debts, a bank won’t lend the money to him/her because it won’t know if the debtor will have ability to pay money back. A person with high debt has low financial flexibility.
The same goes to the government. Thank to the unthoughtful governing of the current government, the debt level rises without a stop. The $700 billion bailout makes it even worse even though there is no choice than to make the financial sector liquid with this bailout. Back to the point, with increasing debt US government has less flexibility to invest in projects, pay interest, pay dues than if it had less debt. Surely the government can print more money but it would increase inflation. Inflation happens if money supply is higher than money demand.
Remember again, Dollar currency has its own demand and supply. Many investors fear that US government won’t be able to pay interest on US Treasury bills, US Treasury bonds and in other securities, therefore they turn to Euro. Europe, I think, has less debts than USA and therefore has higher financial flexibility to pay interest on financial securities.
Dollar value will be high again if the US government clean up its financial mess. The most crucial process is to lower debts. As I told in another thread, US government and the people don’t know how to save money and to manage money well. They think money is endless. They think greed is cool and money doesn’t stink but it doesn’t buy happiness.
October 7th, 2008 at 11:55 p10
I’ll give a comment some day this week. What is your opinion? Would like to hear it.
October 9th, 2008 at 11:55 p10
I don’t think that US will give up Dollar and adopt Euro currency.
As we all know, everything in business there is demand and supply, it be car, housing, product, etc. Currency has its own demand and supply as well. The most imperative reason for the decrease value of Dollar is high debt of the U.S. government.
If a person has high debts, a bank won’t lend the money to him/her because it won’t know if the debtor will have ability to pay money back. A person with high debt has low financial flexibility.
The same goes to the government. Thank to the unthoughtful governing of the current government, the debt level rises without a stop. The $700 billion bailout makes it even worse even though there is no choice than to make the financial sector liquid with this bailout. Back to the point, with increasing debt US government has less flexibility to invest in projects, pay interest, pay dues than if it had less debt. Surely the government can print more money but it would increase inflation. Inflation happens if money supply is higher than money demand.
Remember again, Dollar currency has its own demand and supply. Many investors fear that US government won’t be able to pay interest on US Treasury bills, US Treasury bonds and in other securities, therefore they turn to Euro. Europe, I think, has less debts than USA and therefore has higher financial flexibility to pay interest on financial securities.
Dollar value will be high again if the US government clean up its financial mess. The most crucial process is to lower debts. As I told in another thread, US government and the people don’t know how to save money and to manage money well. They think money is endless. They think greed is cool and money doesn’t stink but it doesn’t buy happiness.