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Crisis

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2008.10.23 | 02:21
Coordinates: Absurdistan, Central Europe

Could someone please explain to me, that if there’s a financial crisis all over the place, but it started in the USA and they still aren’t feeling well according to the stock markets and all kinds of news bits I hear…

How the heck is it possible that the USD is strengthening against pretty much every other currency?

So much, that though they were on par with CAD a little while ago, it’s about 1.25–1.30 CAD to one USD now.

And of course I have to live in one of the, what, three countries that get trampled over in this. USD from 140 to 210 HUF a piece, EUR from 240 to 280 HUF a piece, GBP from 300 to 350 HUF a piece. Nice, isn’t it?

There go my plans of getting a laptop. Soon enough you can’t get rubbish for 200k if this keeps on going.

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Comments {13}

Balinares

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from: balinares
date: 2008.10.23 09:09 (UTC)
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Well, the thing to understand about speculation is that it is not about betting on the inherent value of things. No, it's about betting on what the other players will bet.

What this here means is that speculators are betting other speculators will keep betting on the dollar. Not an unreasonable bet altogether; culturally, the US are more likely to stop at nothing to be the top dog on the pile of rubble, so it makes sense to bet other speculators will bet that way too.

Might be a bit shortsighted, though, if you ask me. It's mountains of dollars, not euros, that are sleeping in China's coffers, and it's thus the dollar that China is holding by the balls.

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