Posts Tagged ‘Euro’

The Value of a Dollar-It’s more than just 100 Cents

Wednesday, March 4th, 2009

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The value of our dollar depends strongly on the values of the dollars of other countries, exchange rates and interest rates. The interest rate in the United States from the Federal Reserve dropped to 4.75% in September 2007. Other banks around the world did not follow when this happened. This means that the European Central Bank (the home of the euro) has a higher interest rate right now than the Federal Reserve. Basically holding a Euro in your hand would be worth more in interest than holding a dollar in your hand. At this time in the dollar’s life, which would you choose?

Because of this difference in interest rate, other countries around the world are thinking like you and I are. They’re diversifying their holdings from dollars to Eruos and even British pounds for this same reason. In a supply and demand aspect, this situation causes there to be a large supply of dollars making them worth less. This loss in value caused the oil industry to charge higher prices, hence the skyrocket this past summer. Other countries don’t want the dollars they get for oil so they exchange them for Euros. It’s an endless cycle that has only gotten worse, despite understanding the root of the problem.

The dollar dropping is a double edged sword. On one hand, many manufacturers want to produce their products in factories in the United States, bringing us jobs. The reason manufacturers want to bring their factories here because it’s so cheap to run because of the low dollar value yet they can sell them overseas for the value of the Euro. On the other hand, the low dollar causes inflation. We know how bad that can be. Everything becomes more expensive in order to make up for the dollar value going down. Companies still want to make a profit on their goods so the cost of everything rises.

In order to get bonds to sell, they will be cheaper and have higher interest rates. These interest rates correlate to mortgage rates which don’t seem to be dropping anytime soon. Our weak dollar is also scaring away foreign investors who are now afraid to own stock in US companies. Foreign nations who have a lot invested in the dollar have the ability to cause a nuclear financial meltdown for the United States. They could easily exchange their dollars for something else, releasing our money into circulation, causing the value to plummet.

All in all, yes the dollar is worth 20 times less than it was in 1913 but a year or two ago, we knew that and we were used to it. Right now, on top of the 20 times less, it is losing more value in front of our eyes. I’m no one to give financial information but now that you know about the value of the U.S. dollar, just watch what you do with it. Buy and sell carefully because this is a delicate time for our economy.

The Dollar Bill and The US Economy

Monday, November 10th, 2008

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Throughout history, the dollar bill has seen the best and worst of times, and the current economic state ofdollar bill economy the country leaves very little to say about the positive impacts it once had in the international markets. The trillion dollar question that’s been running through the minds of so many today is: will the US dollar continue to decline in value or will it elusively begin to rise against all odds and obstacles, and make a come back again, more stronger and resilient than ever?

The value of the dollar bill declines when it loses its value in correlation to other foreign currencies. This results in diminished purchasing power on foreign trade, which will surely increase the price of imports, further causing inflation. When this happens, foreign investors will begin to sell of their US holdings, and the imminent crumbling of the financial market will ensue. It doesn’t help that the country’s current deficits amounting to trillions of dollars is owed to foreign countries through heavy lending, neither.

Due to this and much more, the dollar has lost almost half its value in the last decade alone, further fuelling speculation amongst creditor nations that the United States Government isn’t doing all it can in supporting the US dollar, partly because a weaker dollar would mean that the United States will not have to fork out as much money to pay back their creditors. The drawback to this is, these countries, realizing this, would revert their reserves to other more stable currencies like the Euro to minimize their loses. If this continue on the value of US investments will begin to erode, further invigorating inflation and the collapse of the US dollar.

The introduction of the Euro could also mean the probable replacement of the dollar as the preferred major international reserve currency, as is seen in the current oil trading markets which are proposing the use of the Euro instead of the dollar to aid trade. One of the largest investors of the US dollar is Japan, which means that in the case of an economic surge, the country, in its interest, could sells off its US holdings, increasing the national prime lending rate and strengthening the yen against the dollar.

treasury buildingGiven all these, many financial experts say that the US dollar will not continue to collapse because it is backed by the US government, making it the world’s safest reserve currency. Thanks to the emerging of more and more sophisticated financial markets today, the US dollar has also become a universal medium of exchange, and a transition to another currency seems all too bleak. Another reason why the US dollar will probably remain its hold globally is because it is currently the only currency accepted in any oil contracts, a source of energy that the entire world is so dependable on.

In short, it is not in the best interest of the international communities to allow the US dollar to collapse, as so much has been vested in it, and for credible reasons. This alone would ensure the strength and prosperity of the dollar bill in the many years to come.

EuroTraq - European Currency Trackers

Saturday, October 18th, 2008

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EuroTraq (www.eurotraq.com) is a multi-purpose website with the objective of finding out, in eurotraqchronological order, where a particular Euro bill has been and who it used to belong to, as the banknote continues to travel great distances around the globe. EuroTraq not only collects this information for fun, but also for statistical reports on the dissemination of the Euro, which depending on the subject matter, can be very telling.

The site was launched to the public on April 12, 2002, after months of rigorous planning and preparations. Since then, more features and application have been added to the site by its developers for more functionality and ease of use, making the site very user friendly.

Due to the fact that EuroTraq has had such an international presence since its launch, the developers have registered the site under numerous domain names, and these includes: www.eurotraq.info, www.eurotraq.nl, www.eurotraq.com, www.eurotraq.net, www.eurotraq.org, www.eurotraq.biz, www.eurotraq.be, www.eurotraq.de, www.eurotraq.at, www.eurotraq.it, www.eurotraq.ch, and www.eurotraq.li.

According to the site, the serial numbers on a Euro bill are made up of one capital letter followed by eleven digits. Euro bills are not always printed in the same country that issues them into circulation, which thanks to the inception of the European Union, made this a possibility. Like the US dollar, each serial number on the Euro bill is distinctive in nature, which means that there are no two notes which are exactly alike. EuroTraq uses these serial numbers to locate these banknotes and will map out, in the form of statistics, graphs, and reports, the course of its journey as it travels the globe.

The site also informs its users that the letters on the serial numbers stands for the country of issue, and in alphabetical order, notes with the letter L are said to come from Finland, the letter M from Portugal, the letter N from Austria, the letter P from Netherlands, the letter R from Luxembourg, the letter S from Italy, the letter T from Ireland, the letter U from France, the letter V from Spain, the letter X from Germany, the letter Y from Greece, and those printed with the letter Z are from Belgium.

eurotraq euro billsEuroTraq encourages its users to continue supporting the site by registering as many banknotes as they possibly can. The site also urges it users to include the website address on the notes they wish to track before spending them. Although, unlike other currency tracking sites which approves the use of ink-stamps and penned messages, EuroTraq requests that its user mark the bills using a pencil instead, as to not propagate any legal issues. This is also largely because it is against the law to permanently mark banknotes in Europe.

For users who has large amount of banknotes to enter, the site also provides a mass input page, which is a special page that users can input large amounts of serial numbers at one go, making it so much easier compared to refreshing the single entry page over and over again.

EuroTraq currently has over 44 thousand bill entries and the total value of bills tracked to date is reaching almost a million Euros! According to its statistics page, a EUR 5 banknote was tracked on the site a record 42 times!

EuroBillTracker – The leading Euro Bank Note Tracking Website

Friday, October 10th, 2008

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eurobilltrackerThe EuroBillTracker website has been tracking Euro banknotes circulating the globe since early 2002. Said to be inspired by the Where’s George website of the United States, the site was created by Philippe Girolami and managed by an international non-profit team. The growth of the site is credited to active users who take care of the forums, translate the site, provide email support, and handle various other tasks. This free to use website is developed with the sole purpose of tracking Euro banknotes as it travels around the globe.

Basically, what the site does is extract various disseminated information by generating graphs and statistics, ultimately notifying its users as the Euro currency makes its way around the world. It also literally tracks Euro banknotes by informing a user who originally enters a banknote information into the system and subsequent users with the same banknote information, by email, on its whereabouts, at any given time. It also statistically ranks various other related details such as the most number of notes entered by a user, best countries in term of frequency of tracking, as well as which countries are the notes most settled in.

Typically, a user enters information of their Euro banknotes on the site and if a note is already registered, the user is notified immediately on its historic whereabouts, and anytime that particular note is entered again on the system, an email notification will be sent to whoever that has entered the information of that particular note - past, present and future. Currently, more than 46000 notes are registered, on an average, at the website every day, and since its launch, a little more than 50 million notes have been tracked.

Due to its popularity, a community of trackers, from the higher volume tracking countries, was started up to help support the site, especially in the Benelux countries, Finland, and Slovenia. Ironically, the number of users from the more populated nations such as France, Spain, and Ireland have been low.

This community has also been organizing annual pan-European meetings since 2004, and in August 2008, a conference was held in Ljubljana, to discuss its bright future. Due to its success, it is now consented that a new pan-European meeting be held every six months. Apart from these yearly international engagements, local national gatherings at various levels have also been organized in support of its effort.

Currently, the website is said to be administered by a non-profit organization called The European Society for EuroBillTrackers, which has its headquarters in Belgium. This outfit was said to have stemmed from a principal disagreement with the founders and webmasters of the site, causing a split of the EuroBillTracker website late in 2007, but was later integrated back into a single site in January 2008.

To date, the number of users registered on the site have exceeded over 130000, and the total value of all Euro banknotes entered so far is well over the billion mark, a very encouraging statistic indeed. Here’s to wishing the same success for our site here at TrackDollarBills :)

The US Dollar As The Leading International Reserve Currency

Monday, September 22nd, 2008

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euros us dollarsThe US dollar has always been the most imperative reserve currency in the world, to date at least. So significant is the US dollar bill in its trade that it is said that up to 70 percent of international currency reserves today is made out of the US dollar. This is probably the reason why the United States can afford to run higher global trade deficits and get away with it, its because of the much delayed impact this has on its economy. This “float” illusion also ultimately gives the US dollar bill enough time to recuperate, and in doing so helps to absorb some of the brunt of a financial crisis.

The reason the US dollar gained such an acclaimed reputation is due to it consistency in strength, making it a favorite amongst international traders. It was so commonly used in international trade that nations began stockpiling US currency as a indefinite form of bailout. The stash also directly helps strengthen export competitiveness within these countries, although this would also directly result in the weakening of their own respective currencies. Another advantage to stockpiling the US dollar is the fast and great inflows of capital it creates, which ultimately helps its intention in buffering against any impending financial predicaments.

This wasn’t always the case though, the US dollar did not have as much international presence as it does today early in the century, and this is why many experts say the US economy crashed back in 1929, during the great depression, because the world wasn’t as dependant on it as it is today.

Even essential commodities like gold and oil are priced in US dollar to create a more common global denominator, eliminating unhealthy trade competition, and many countries retain the currency as a means to ease trade.

The US dollar was initially established as a reserve currency principally because the US flooded the world with economical but quality manufactured goods, forcing international markets to have US dollar ready-at-hand. This is no longer the case these days, US made goods are now expensive and countries like Japan produce higher quality goods for fraction of the price.

Today, the US dollar is slowly loosing its appeal as the preferred reserve currency globally, thanks to the introduction of the Euro, arguably a much more stable currency, although continuous debates follows those who may think otherwise. Whatever it may be, I think the US dollar will preserve its status as the number one reserve currency for a long long time to come.