MicrostockGroup

Boy, there used to be a time when we (Canadians) earned U.S. $ we were really doing good.  In the recent past it was worth 40 cents more than our dollar. 

Our dollar is high, but U.S. is also low.   Has it had much on everyone's earnings in other places - Great Britain, etc. much?

Here's the news today - I NEVER thought I'd see this again:  (Hey Leaf - as an ExPat you may be interested in this....)


Canadian dollar hits parity with greenback
Updated Thu. Sep. 20 2007 1:40 PM ET

The Canadian dollar reached parity Thursday morning with the U.S. currency for the first time in nearly 31 years.

The loonie was supported by lofty commodity prices, a strong domestic economy and concerns about a U.S. economic slowdown.

At 10:58 a.m. EDT, the loonie rose as high as US$1.0004 before backing off to 99.86 cents US -- up 1.36 cents US from Wednesday.

If someone in Canada earned $500 at the height of USD/CAD, it would make $800CAD. Now it's only 500. How about that?

I'm in the U.S. and this has been weighing heavily on my mind.  Not because of the falling dollar, but because I have an eary feeling that some (ok at least one) of the micros may be making money on us through arbitrage.

I know of a couple micros that have various foreign sites.  Per the TOS, on some sites, the contributer is to be paid a percentage of revenue.  If the agency is charging customers 2 Euro for an image in France, and $2USD for an image in the US, then why am I only getting 33 cents USD on a French sale?  Wouldn't it be 33% of the 2 Euro (which would be more than 33 cents USD)?  The other side of this is why would a customer buy from an agency with a site in France if they can buy the same images cheaper from that same agency on a US based site (in USD).  I need to think about this a bit more but it's a theory.

This wouldn't apply to Shutterstock or Dreamstime or Bigstock, etc. because either customers have to pay in USD or the TOS specifically states a pre-determined dollar amount (Shutterstock is 25 cents or 30 cents USD).

Talking of inflation, the Zimbabwe situation is why Greenspan has warned this week of possible double digit interest rates in the years ahead.  Currency devaluation risks importing inflation, particularly in a country like the US which has a huge trade imbalance.  Think about it - if the USD drops 10% suddenly all the foreign goods in the shops cost 10% more......and if that gets out of control..........

US friends can expect mortgage rates of 9%, 11% or higher sometime in the next three or four years.  What that will do to the housing market doesn't bear thinking about, given its already fragile state.

Not good.

Yingyang, cycles repeat.  We are presently in 1968.  Be warned.

Given that a huge part of my sales in FT are from Europe, I would love to receive those credits in euros....

Regards,
Adelaide

I don't believe there is palpable connection between choice in the next (or last for that matter) election and current USD devlaluation. Forces that are in play here are way beyond the scope and timeframe of efforts of any given government. Think of it in terms of housing situation which plays significant role here; of Feds polcies in inflation control; stock market fluctuations, etc etc. It would be way too flatering for any President or Senate or else to consider them one of factors of such scale.

Sorry, will have to respectfully disagree here... Evaluate the cost of war on macroeconomic scale and you'll see that it, well, leaves a dent but not much more than that. Also, and majorly, things like annual budget are very fleeting when we are talking about such macro-trends. When CAD was at 1.60 vs USD, did Canada go to war, or had unbalanced budget? In fact, Canada has balanced budgets for what, 25-30 years now? And fights mostly mosquitos in prairie provinces not spending on military anything above amounts bordering with indecent. Yet CAD went to historic lows - with strong economy, decent employment numbers... It wasn't until oil prices exploded and CAD became seen as resource-pegged currency that it went up.

If you are talking about trading deficit (which is far from straightforward thing), housing credit crunch (and all related credit issues), questionable Feds rate regualtion policy (matter of separate and very involved discussion), China USD reserves, possible unpegging of oil from USD by oil-producing countries in Middle East, and couple dosens things of this scale - then yes, I'll agree that they are singificant factors. Current President is merely blip on radar of these things, I'll venture to suggest that whoever hypotetically won last election or two - situation with USD would have been exactly the same as today. Just as Clinton didn't have much, if anything, to do with stock market surge in 1998-2000, Dubya had nothing to do with its crash in 2001. Consider also huge inertia of these things, they take quite a while to wortk their way through the system - in other words, economic mistakes of last c year won't reflect in events and reaction of this or next, and when we are talking about these long term trends, count in decades and use geopolitic terms

I understand common desire to put all the blame on widely disliked President... but this one is misplaced, IMO. Not because he did something right about that, but simply because it takes much longer and greater "social engineering" or mistaken economic policies to influence such huge economy as USA's. I could site some concrete examples to illustrate the thesis but heck, it has nothing to do with photography, and I think I wrote way too much about it already to bore you all to death

I am not talking about particular study. It's a rate cut or hike that takes about 18 month to work its way through the system, yes - which makes monthly Feds decisions very questionable approach as I said earlier - so, when we are talking about currency trend over last 4-5 years, when should the influencing factors start?

And war and its impact on economy... umm, at the risk to offend people of good will I will still have to suggest anyone interested to have a look at market's reactions on war announcement... spring of 2003 is the latest example.

Anyway, you can't ignore example of Canada in this comparison. Closest neighbour, very similar economy trends, strong interconnection. My example of what happened with CAD over last 10 years is relevant to show that a lot of factors you attribute USD downtrend to simply didn't exist north of border, yet currency  depreciated very significantly. Even without any further analysis that alone would be enough to question the validity of those factors, don't you think?

The US$ is the most overvalued currency on the globe.

The government has a terrible spending problem with defence, and the sub-prime mortgage market has burned a lot in the finance sector.

Yeah you are right Lizard. nobody cares ... lol

Sorry but I don't see analysis, I see hyperbole. You're using the Canadian economy to extrapolate what effects the US economy yet as you yourself pointed the Canadian economy is heavily dependent on oil (and logging), whereas the US economy is predominately a service economy. That would seem to indicate that what is good for Canada (high oil prices) is bad for the US. I'd like to see either actual empirical evidence or an academic article before you convince me.

P.S. I looked at the spring of '03 and the US dollar depreciated drastically over the months following announcement. How does that help your case?

Pixart, you missed the point I am afraid... I said: "When CAD was at 1.60 vs USD, did Canada go to war, or had unbalanced budget?". We werne't anywhere near Afgan when CAD was that low, that was my point.

yingyang, sorry, I meant STOCK market reaction, not currency, should have elaborate. As for the rest, sorry, it becomes way too involved. I could cite a lot of analysis, but as you can appreciate we are restrained by a framework of forum devoted to completely different topics...  What you see as hyperbole is simply an analogy to show that your reasoning doesn't work in another place with similiar situation, in attempt to keep the discussion of highly complicated topics on a essily understood for non pros level. Also, every time it comes to Bush, US vs whoever, emotions run so high that it's kind of hard to maintain coldblooded discussion. So I'll bow out on this, with just one advice from somone who makes a living trading various markets: if you think popularity of a current president is a serious factor in currency valuiation, do not try to trade Forex