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#1 | ||
High School Varsity
Join Date: Jul 2003
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Falling Dollar
http://service.spiegel.de/cache/inte...343449,00.html
I do some freelance programming for a company in California and when I started, I was getting around £23/hr (from $35/hr). Now, it's more like £17.50 -> £18. So obviously, I want the dollar to improve for selfish reasons, but I guess a low dollar encourages tourism - its very cheap to visit the states just now. What are your opinions on the dollar's fall? |
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#2 | |
The boy who cried Trout
Join Date: Oct 2000
Location: TX
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Quote:
It helps drive up the price of a gallon of gasoline. ![]() |
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#3 |
Head Coach
Join Date: Oct 2000
Location: North Carolina
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From what I can tell, it is good for American manufacturers because it lowers the cost of producing goods here, but it is bad for American citizens because we have less money relative to the rest of the world.
And it is good for the short term health of the economy because it decreases manufacturing costs, but bad for the long term health of the economy because it will force interest rates to rise as we need to borrow more and more money and hurt people's retirements because their homes and other investments will be worth less. (*For all of the talk about Social Security, most people's main retirement income is their home. Accordingly, a falling dollar should concern people more than private accounts.) I am hoping that someone who actually knows stuff will let me know if I am right or wrong about my assumptions stated above. *EDIT--I see that maybe I should have clicked on the link above and seen that the linked story pointed out that very fact. I guess that he is reading or writing the same stuff that I have been reading about the issue. Last edited by albionmoonlight : 02-28-2005 at 08:47 AM. |
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#4 |
Grizzled Veteran
Join Date: Dec 2003
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2 min econ summary:
Falling Dollar = Happy Exporters, unhappy Importers, can be alleviated with higher interest rates, makes goods more competitive on world markets For a primarily export based economy (like much of Asia, or Japan), a falling currency isnt neccessarily a bad thing - they would prefer it as such. Sure, it hurts when you have to repay debt denominated in another currency (aka Indonesia or the Philippines), but in a case like Japan, any debt they have would be yen denominated anyway. A rising currency also is not a good thing, ceterus paribus. It can hurt an economy trying to grow its way out of recession. On the other hand, if you have large swaths of debt, a rising currency can reduce your burden, given that the debt is denominated in other terms. |
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#5 |
SI Games
Join Date: Oct 2000
Location: Melbourne, FL
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A cheap currency is both good and bad for a countries economy, producers which don't rely on imports can export their products and be much more competitive than normal outside of their home country.
However any product which relies upon imported items (be it steel, computer parts or whatever) suddenly finds themselves in an awkward position as they're paying more for goods which they can't sell for more internally .... (and on a personal note it sucks if you go on holiday from a country with a poor exchange rate ...) |
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#6 |
College Benchwarmer
Join Date: Oct 2004
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The US is a net importer, so it is generally a bad thing to have a weak dollar.
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#7 |
College Benchwarmer
Join Date: Jan 2003
Location: Cincinnati, OH
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You can also take steps to protect your income through use of dollar derivatives. It's a little complicated, but if you're loosing 20% of your income due to fx fluctuations, I'd really look into learning about it. It's -not- expensive to protect yourself.
On another note, I'd expect the dollar to strengthen soon, as a lot of the activity was caused by S. Korea's recent mumbling about changing the amount of $$ it holds. The markets took a big hit, as well as the fx rate. They are not following through on their announcement, so a rebound would not be unexpected. |
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#8 | |
Coordinator
Join Date: Jul 2003
Location: Here and There
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Quote:
I don't think the dollar rising or falling would impact your salary in that way (assuming you live in the US). What it likely is either lack of demand for your position, or an increase in the supply of programmers. |
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#9 |
High School Varsity
Join Date: Jul 2003
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I live in the UK but since my client is a US company, I gave them a dollar / hr rate.
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#10 |
Pro Starter
Join Date: Sep 2003
Location: Toledo - Spain
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It affects a lot my bussines as i'm paid in $$ from the sponsors i promote but i live in Spain. So right now i'm earning a 30% less than i would past year with same results. At least i can get some profit from paying hosting and freelaces as i pay them in $ too, but i would preffer an euro at least equal to the $ insted of the current 1.30 exchange.
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