Monday, March 10, 2003
Another Dubya policy success(?)
First things first—I don’t pretend to know a thing about economics. I signed up for a macroeconomics course once, in the spring semester of 1970; Kent State ended the course prematurely, and I happily accepted the “Pass” that my school gave for all courses that term. Never tried econ again.
As I watched the US stock markets take still another tumble today, on the third anniversary of the NASDAQ’s all-time high, I happened to hear a news report that mentioned that the euro is currently valued at somewhere in the neighborhood of $1.10. Somehow, that tidbit of information triggered something in my brain, which spurred me into a bit of web-surfing.
You see, I have an ex-sister-in-law and ex-brother-in-law who are in the business of international tourism. They run group ski tours to Austria, enviro-tours to Central America, stuff like that. I learned that a not-insignificant part of their profitability actually arises from what can only be called currency speculation. When groups pre-pay for their airfare, hotels, and so forth, the tour operators have a good bit of leeway, often several months, in deciding when to move those funds from US dollars into local currency. That decision can spell the difference between black numbers and red numbers on their company’s bottom line.
I recollected that when I discussed such matters with my ex-in-laws about a year ago, the euro was hovering somewhere below a dollar, so I was surprised to hear that it’s now about 20% higher than it had been the last time I noticed it. That got me to wondering just what’s been happening to the exchange rate between the currencies of the United States and its European partners under the economic policies of our current regime.
A bit of googling took me to OANDA.com, The Currency Site, where I found downloadable data on the dollar-euro exchange rate. I obtained and graphed those numbers for the time period of January 20, 2001 - March 11, 2003 ... in other words, during the presidency of George Walker Bush.
The plotted data can be seen here:
It is clear that the exchange rate bounced around in a fairly narrow range during Dubya’s first year in office (the euro was between $0.84 and $0.94 the whole time) . Just a momentary wobble was seen on 9/11—the euro went for $0.9068 on the 10th, $0.8994 on the 11th, back up to $0.9150 on the 12th. While the battle raged in Afghanistan, with the Taliban collapsing and al-Qaeda on the run, the dollar strengthened and the euro decreased in value. On the day of GWB’s first State of the Union address on January 29, 2002, one euro could be obtained for $0.8627.
Then came the “Axis of Evil” speech. As the agenda of the Project for a New American Century moved into high gear, so too did the value of the euro begin to skyrocket (meaning, of course, that the dollar was weakening in comparison with Europe’s currency). The euro reached $0.90 on April 27, $0.95 on June 19, and achieved parity with the dollar on July 16. It then steadied at around $0.98 for about four months ... until just about exactly the day on which UN Resolution 1441 was passed. The euro actually exceeded a dollar in value on November 6 and continued to rise rapidly, reaching $1.05 on January 11, and $1.10 on March 8, 2003.
Since George W. Bush took office, the euro’s value against the dollar has risen by 18.3% (8.6% annualized). But recall that the euro actually declined in value by a bit under eight percent during his first year in office, prior to the first SOTU speech. Since the Axis of Evil, there’s been a huge 27.8% increase (25.1% annualized) in the relative value of the euro.
Again, I don’t pretend to know what this means, or even if it has any meaning at all. As I said at the outset, I know nothing whatsoever about economics.
But from this layman’s eyes, it sure looks as though the dollar (the currency of George W. Bush’s United States) has been significantly weakened over the past year in comparison to the euro (the currency of Jacques Chirac’s France and Gerhard Schroeder’s Germany). Not only that, the increasing pace of change in currency strength appears to coincide remarkably well with milestones of Dubya’s pathological fixation with Saddam Hussein.
↑ Close ...
Posted by N in Seattle on 03/10 at 10:10 PM
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