The euro and the dollar are a penny away from parity for first time in 20 years
lite.cnn.com
lite.cnn.com
>>The pound is also down to $1.19 which is amazingly low. This might be due to the European malaise mentioned in the article or from the ongoing Brexit disruption...
But this isn’t the only thing going on, lots of governments are giving actual weapons to Ukraine as well. If he was rational, sadly that appears to be a big if, that would probably help deter Putin too.
the only nation that's going to profit from the war in Ukraine is the US... increased NATO membership... increased arms sales... increased dependence on US for oil and gas supplies... etc. etc.
Downvote away as you always do. I know that even supposedly intelligent Americans have a total mental block when it comes to accepting that your country might actually be the cause of a lot of the trouble in the world --if not directly, then behind the scenes, fanning the flames. Unfortunately we'll all be dead and gone by the time the official documents relating to this period in time are declassified. But, boy are your grandchildren going to laugh at how gullible you all were!
[1] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
The ECB has stopped bond buying as of July 1st. https://www.reuters.com/markets/rates-bonds/ecb-ends-bond-bu...
The BoE stopped expanding QE in December and started tightening in March. https://www.bankofengland.co.uk/monetary-policy/quantitative...
[1] https://tradingeconomics.com/euro-area/central-bank-balance-...
[2] https://tradingeconomics.com/united-kingdom/central-bank-bal...
The BoE balance sheet stopped going up as of December and has been going down since March. (You can see this if you switch to the 1Y view of your chart.)
Edit: this is not a "minor economic pain" for Europe and might reach extreme consequences later this year.
On the other hand, the US have played extremely well, gaining on all fronts (increased influence through enlarged Nato and, increased weapons sales, increases oil/gas profits), while China is left in an awkward position. Only downside seems to have been the push for alternatives to dollar/western-centric financial system.
is rather unfair I think - there are very good reasons why an unpleasant action might be necessary
LNG is not going to suffice. There isnt even the port capacity to bring it in. Rationing would have to be extreme just to ride out the winter. And then what?
Hitting the economic self destruct button so that Ukraine reserves the right to join NATO doesnt look so appealing any more.
If supplies where dropping 80% Germany would be facing real issues, but that's not the scale we are talking about.
In general, basic self-interest in geopolitics means to always to something only with a clear upside for yourselves (duh)
With the energy prices as they stand, the UK for example is heading for a social and potentially humanitarian disaster this winter. I don't see how "being firm against Putin" or "Ukraine" justify it.
This a ridiculous absurd assumption. Russia has massive supply issues for just about everything, including defense related industries.
>In general, basic self-interest in geopolitics means to always to something only with a clear upside for yourselves (duh)
[Citation needed]. If the downsides for your enemy are massive it makes sense to take a hit your self. In fact Putin did count on the west to continue it's cynical way of doing business like it did after all the previous Russian wars (Chechnya 1/2, Georgia, Syria, Crimea, Donbass). I'm sure, if the EU could have made the threat of doing what it did later, this would have deterred the invasion. It just didn't have any credibility due to past decisions. But now future threats should be take more seriously. This might stabilize the world as a hole.
>I don't see how "being firm against Putin" or "Ukraine" justify it.
The next winter is going to suck and most people might not have realized that. But speaking of humanitarian disasters, this is our best bet to avoid a way, way bigger humanitarian disaster in the baltics.
What extra justification is needed?
The Commissioner of the President of Ukraine for Children's Rights Daria Gerasimchuk on the Polish TV channel "Belsat" exposed fake Ukrainian propaganda about the alleged violence by the Russian military against Ukrainian children. Proof: https://www.youtube.com/watch?v=GfUBRGUH-Kc
The Prosecutor General's Office of Ukraine has not a single confirmed fact of violence so far.
Europe (EU/Nato) is not at risk of attack by Russia. It's not clear why Finland would suddenly be at risk.
What is happening is a continuation of the fall of the USSR when Russia lost very big and was hastily written off. Russia has somewhat recovered and is asserting its claims and interests. While we should hold firm when this clashes with our own, saying that Russia should be beaten into submission is not going to work and is only going to perpetuate conflicts.
As it stands Russia is going to take the Donbas, and it took Crimea back in 2014. So the question is where we go from there. They are not going to hand those territories back to anyone. So we need to negotiate spheres of influence backed by serious force as was the case before the fall of the USSR.
The proposal to have a neutral Ukraine was sensible provided all parties are very seriously held to their word.
Lastly, we should remember that Crimea used to be Russian until very recently and that Ukraine is very special for Russia, so it's far from obvious to me that what they are doing there means they plan to attack/invade other neighbouring countries afterwards...
It's not that we're now suddenly at risk, it's more that we were at risk all the time and now we finally understand it.
Also the highly visible "special operation" allows Russia a whole new level of pressuring us into various things. The message we're seeing is "if we decide to fuck you up, we don't much care if a bunch of our boys get hurt in the process". Which pretty much renders useless any "credible defense deterrent" which isn't an existential threat to them.
> like turning public opinion into agreeing to join Nato in some countries
The change of public opinion as result of the actions we've seen was such an obvious consequence, it makes me wonder if it wasn't one of the effects Putin wanted to get out of this campaign.
Finland, which kept relatively good relations with the USSR throughout the Cold War had actually been at extreme risk all along and must join Nato right now. Right... well at least they have a long border with Russia, not like Sweden... As long as they order F-35s everything's cool, I guess.
It's probably something that's hard to understand from a comfy armchair half a world away, so I guess that's an excuse for the condescending tone.
There is a farmer's revolt in Netherlands that's not covered by American media for some reason, but dw and Politico is: https://www.politico.eu/article/police-fire-dutch-farmer-pro...
This is the exact wrong time to do these things. First, you need a strong economy and a backbone that can sustain sustainable practices. Otherwise, the cost of climate change is acceptable over literal starvation, insurrection (Sri Lanka) and other destructive effects in the society.
Has anyone done serious and with good faith, balance and ROI of some of these climate change policies? Note that I am not challenging the validity of CC science, just the economic policies. I hope that its open for debate.
At the moment Europe is going through a self-inflicted crisis that is not justified, be it by security or "the environment".
It may be reasonable to decrease dependency on Russia but the sensible way is to have alternatives in place first.
Edit: Baltic states are in Nato, so my comment fully applies to them.
Saying that "Russia did invade Ukraine so they could attack Nato" is equivalent to saying "the US invaded Iraq so they could attack China". It is plainly a rhetorical fallacy.
I didn't, but nevertheless there's a difference between "it's irrational because the cost is higher than the benefit" and "it's irrational because there's no benefit to getting your ass kicked".
EDIT: Finland was also part of Russia.
The alternative is letting Putin continue to believe that his vision of Russian irredentism — which could very easily go right though my home in Berlin and not stop for a further 100 miles or so — is something the rest of us will sit back and allow.
Putin started a war, even if he hasn't officially called it one yet. Hopefully it will be stopped before he does call it that, but nothing about his decision to invade Ukraine appears either rational or connected with reality.
Maybe if Germany had Russian-majority areas, had started banning the use of Russian, and had violent demonstration clashes resulting in neo-Nazis burning ethnic Russian supporters and seperatists alive - https://en.wikipedia.org/wiki/2014_Odessa_clashes
I don't support Putin or the invasion at all, but it's not like he just invaded out of the blue. Ukraine also failed to allow Donetsk and Luhansk to hold independent referendums for secession - https://en.wikipedia.org/wiki/Minsk_agreements#Elections_in_...
The situation is nowhere near as black and white as just "Putin madman". A peaceful compromise around referendums and the right to self-determination would have been the best outcome, but now we should be neutral and put the stability of our own countries first.
Even more unfortunately, at that level propaganda is beyond my ken to reliability disabuse, and I know full well that hawks want me to fear more than I need to.
Yet it is the locals he's claiming to want to liberate who are shooting his troops, the cities he's saying he wants to save that are being flattened by his missiles.
Reminds me of the stories of Afghanistan, where we blew up weddings and then were surprised the locals didn't like us.
It's a massive win for the US, the arms exports too.
No, it’s not. Half our politicians are pissed we’re spending $40 billion.
Unfortunately, this article is representative of the kind of aimless search for an answer to the simple question of how the US dollar can be surging like this at a time of domestic inflation the likes of which haven't been seen in four decades and gargantuan budget deficits.
What the article does not mention is US dollar-denominated debt taken out by foreign entities. As the dollar rises, these entities must scramble to find the dollars to service the debt, driving the dollar still higher and so on. This seems like a strange thing to do (borrow in someone else's currency, specifically US dollars), but it is very, very common.
If this dynamic sounds familiar, it's because it's called a "short squeeze." Those foreign borrowers have shorted the US dollar by borrowing and then immediately spending the proceeds. If the dollar falls, the borrowers make out like bandits (sell high, buy low). But when the dollar rises, they come under pressure and must cough up assets to sell to buy... more US dollars (sell low, buy high).
In today's world dollar strength is a sign of a distressed world economy. Selling assets to buy US currency to service debts is not sustainable. So the long-term picture for the US is not rosy, even less so for the rest of the world. A lot of debts will be defaulted on because the squeeze squashes borrowers like bugs. In the intermediate term, however, the dynamic of a rising dollar and distressed world economy can work very much to the benefit of the US. The stock and bond markets can soar as capital floods into US markets, driven by the far higher return potential compared to the rest of the world. This in turn can severely distort the economic picture, causing catastrophic policy mistakes and private mis-readings of the economic picture.
Countries need to buy dollars to buy oil. That’s why dollar is rising.
That alone is enough to set off a declining trend in the euro vs the dollar.
War destroys stuff, even as the numerical quantity of money remains the same.
Neutrality is looking really, really nice right about now. We could keep the gas flowing via NS2 and get some stability back.
Right now we're using coal for electricity again, and that's much worse than using NS2 in the short term.
Yeah, now, sure millions might freeze to death and die of hunger in the next (few) winter(s) / year(s) but at least politicians can’t deny the problem exists any longer so it will eventually get solved.
For what? So corrupt Ukrainian oligarchs can skim off their gas transit fees (see Naftogaz and Burisma) instead of corrupt Russian ones, all assisted by far-right paramilitaries (on both sides)? We don't have to take a side in every conflict, especially when it demands so much sacrifice.
Let's say EUR/USD reaches parity for 2 hours during the trading day and I'm in Europe -- for those two hours are my transactions 1 to 1 or is there a lag of a few hours? Or is the "on the ground" exchange rate representative of the previous closing price?
US Bank A maintains an account with British Bank B but it’s dollar account
Now an American business with account in Bank A is paying a British contractor $100 in Bank B
So Bank B is going to subtract $100 from Bank A’s Dollar denominated account and add GBP 84 to the British contractors account. What happens in between? How did those dollars become pounds?
Having two parties and two banks makes it a bit complicated. If you think of a guy behind a desk in an airport trading cash - you give him $100 and get £84, the guy behind the desk started with £84 and now has $100. (The next customer might pay £87 to get $100 - the desk makes a small profit and both customers have exchanged what they wanted)
Clearly if the price changes can be reported with such high precision, it needs to be based on a solid value from an exchange or a set of real exchanges instead of an aggregate of all the airport guys exchanging cash.
(For that matter, even the airport guys don’t set their own prices. They set a commission on top of the day’s forex rate)
The currencies themselves are merely entries in a (bank) ledger for an account denominated in the given currency.
The same with shares, options and other intangibles; they are records in institutions that are empowered to hold them.
1. What/Where is this market? What’s the forex equivalent of NYSE or NASDAQ
2. Even If both the banks hold the other country’s currency, (which in most cases they won’t), how do they know what the exchange rate is.
See here for more details: https://en.wikipedia.org/wiki/Foreign_exchange_market
They lock in exchange rates for the whole day, based on rates yesterday. Don't know precisely what hour it's locked in, or if it's an average for the whole day, or some other calculation.
I think I calculated that they are charging ~1-2% premium on top of the market rate. CSR has no fees beyond that for foreign currency purchases.
I can't think of anything offhand but I bet someone clever could, and make some money doing it.
The actual price you get for your transactions depends on who you're transacting with.
If you use a Visa or a Mastercard, generally there is fee taken by those companies, about 0.5% and then your bank may take a further cut, usually about 3%. There are many cards that don't take the 3%.
You may find that the transaction is reported to you initially near the spot price, less the 0.5%, but you'll see a different amount on your statement because the settlement of the transaction takes place at a different time (maybe 2 days later) and a different exchange rate. The reason for this is that the parties involved want to avoid exchange rate risk so they take the market rate when they actually account for the payment.
In the US we also feel the effects, but not as much.
It might be time for the US to help Europe monetarily with this, to share the pain as it were.
I'm not happy to pay more for things, but I'm willing to do it because it's the right thing to do.
Am I incorrect, are these comments from Europeans minority views, or is sentiment really starting to shift?
We'll play our part, because we have to.
Some like Hungary are Putin puppets.
Other countries have a strong no-war culture, e.g. in Germany and Italy the sentiment is more split.
Additionally, countries such as Italy or France have historically harboured a sizeable amount of people who dislike NATO and the US, so they naturally flock to the "this is a colonial war by the US" camp.
If anything, it's surprising the EU has reacted in such a coordinated way.
> It might be time for the US to help Europe monetarily with this, to share the pain as it were.
That would be very much appreciated.
And for energy generation we can fall back to coal, which is easier and quicker to reactivate than nuclear energy. Not nice in terms of CO2, but the most practical solution right now.
But natural gas itself is still required for industry and domestic heating in most of Europe, and that cannot be solved in the 3 months remaining to winter.
They have voted in the 80s to ban nuclear power as well, and now energy costs are through the roof. It will be an awful, expensive winter over there importing French nuclear electricity and Russian gas.
AFAIK there is no movement whatsoever to reconsider that referendum. Last I checked Italians are very much against it.
But the referendum doesn't matter right now anyway, there is no way to rush through electrification of domestic heating and industry and build functional nuclear power plants in ~4 months.
So the only question is what to do regarding gas sources or shortages.
FWIW, France is currently importing energy from Germany, and will be doing that until the winter, because they shut down many reactors for maintenance, the futures for electricity in France were > €1200/MWh last week.
The first referendum was 6 months after Chernobyl, the second one 3 months after Fukushima. No wonder the outcome was overwhelmingly against it. Demagogy in its purest form.
Didn’t see that today, sadly, but I did find this: https://www.amazon.com/Images-SI-Uranium-Ore/dp/B000796XXM
Waiter: Un café? Un dessert?
Elderly lady tourist: I'm sorry, in English?
Waiter: A coffee? A dessert?
A bit like "the French have no word for entrepreneur" (-- George w. Bush, alledgedly)
He says “I can tell you that the prime minister [Blair] never heard George Bush say that, and he certainly never told [his friend] Shirley Williams that President Bush did say it. If she put this in a speech, it must have been a joke.”
While Blair / Campbell have an obvious interest in denying this (it's not good to be rude about other countries leaders), we might reasonably be suspicious of Campbell's denial.
This is still useful if our interest is "When was this said?" because we know Shirley Williams talks about it, so e.g. if some future historian is wondering about a claim Trump said this to Johnson, they've got this record that well, this particular "American Presidents are idiots" quote certainly pre-dates that.
There a lot of interesting turns of phrase where that is primarily what we care about - did Franklin say that stuff about hanging together or hanging separately? Perhaps not. This play on words does however seem to originate in that period, you won't find it much earlier than the American Revolution, while by the 19th century it's commonplace.
I'm somewhat the defacto interviewer at my company for latino interviewees because of my time in south america. I don't even speak spanish barring enough to survive, but I can understand their english better than my peers. When they asked how I was understanding what they said, I didn't even realize I was the only one getting it.
I think people in general should hang out in strange lands to get your brain to be more flexible to different kinds of inputs even if you don't plan learning a new language.
I'm kind of the opposite of you. My hearing is extremely sensitive to a fault and picks up more than I even want. I'll say that I'm easily overwhelmed when there is a lot of competing noise though.
And that's leaving out that the articles make it harder. If you don't speak French, knowing where the spaces go in uncafe isn't automatic (although written as one word it is much easier than verbally).
I recommend everyone try it before you judge the elderly lady.
Although, I may have been able to figure it out from context (end of a meal, sitting down at a coffee and desert place)
I mean, lots of us have trouble understanding various British accents, before slang even enters the game.
His French is excellent. I really loved the early seasons, where he was teaching French to a Glaswegian woman. French with a Glasgow accent is baffling and beautiful.
The pronunciation of "café" is more similar to English, but spoken at conversational speed it can still be hard to parse. The article and the word flow together; it would sound like "ahcuhfay" (with the last syllable sort of fading out).
I'm still learning French. I watch French language films with the subtitles on, because even when I know 100% of the vocabulary I often can't follow the spoken words without a nudge to provide context.
French is a lovely language, but it's conspicuously mushy. They French are aware of it. There are many language resources that over-enunciate as an educational tool.
So I sympathize with the elderly tourist. Those words are very similar on the page, but in a noisy cafe I could see myself confused as well.
You can reveal it by going to your user settings and changing "showdead" to "yes".
Personally I only flag spam and hate speech, but some people get really upset by certain posts and will flag them rather than (or in addition to) downvoting.
With enough flags the post becomes "dead" and then you can't reply to it, and it's hidden by default. It's possible to un-flag it with the "vouch" option.
I think flagged posts are often reviewed by dang (a moderator).
FX rates are mostly driven by (real) investment flow and expectations of future growth. Absolute and relative levels of interest rates tend to reflect that as well though there are some speculative flows that will chase carry trades.