What Would Stop Stores From Trading In Euros?

Kylon · Expert Joined: Aug 12, 2005 Posts: 803

What would stop companies like Walmart from trading in Euros, and demanding Euros as payment?

What would stop companies from paying their employees in Euros?

Why not simply switch to another currency that's more stable?

What's to stop banks from storing money in Euros?

Then they can inflate all the money they want, and they won't be screwing the average American Joe.

What do you think?

joeltrout

My guess would be the fact that 99% of Americans dont have any euros.

It would be suicide for American companies in the US to demand something other than dollars from American consumers.

joeltrout
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steam_cannon · Expert Joined: Dec 28, 2006 Posts: 2425 Location: MA

Kingcoal

Tyler_JC

Is this really a disaster?

Is the currency "falling apart"?

If you happen to travel to Europe very frequently, yes it could be a big problem. But the impact on consumer prices in the US has been limited because imports from the EU do not account for a very large % of our GDP.

Mexico, China, Japan, and Canada account for fully 1/2 of America's international trade.

Against the Mexican peso, the Dollar has actually gained in value over the past 5 years. The Yuan has only increased by about 8%. The Yen is basically flat although we have sunk below the lows of 2005. The Canadian dollar has gained dramatically...and it's killing them leading to an economic slowdown in the Canadian manufacturing sector. That's what happens when 80%+ of your exports go to a country against which you are losing your competitive edge.

The Dollar has declined most rapidly against the Euro and Gold.

Fortunately, no one is asking America to pay its debt in gold so we don't have to discuss this one.

The Eurozone has a significant trade deficit and a sizable current account deficit. Don't believe me, try to name one large or medium sized country in Europe with a budget surplus.

The Euro is gaining in value because the dollar is declining (and is only allowed to decline against a few free currencies)...the Euro is not gaining in value because the European Union's economy is robust and growing strongly or because the EU has its fiscal house in order because it doesn't.

Comparatively high interest rates in Europe are pushing up the currency valuation but if it is not based on economic fundamentals, they are sitting themselves up for a decline.

Long Story Short.

Businesses are not going to trade in Euros because their suppliers aren't European. Their employees are unlikely to accept Euros because they have nothing to buy with them.

I have 13 Euro and 83 cents sitting on my desk that I'm considering trading for $15 (an abysmally low exchange rate) because I can't buy anything with this stuff and banks don't take change. Unless I can find one of these "We Take Euros" stores, I'm screwed.

You would need to see inflation hit levels at Zimbabwe levels for domestic American economic activity to shift over to Euros. And based on our trade patterns, it's more likely that we would see a shift to Canadian dollars. At least we can drive (ride ponies) to Canada in a few hours to find a willing customer base for Loonies.

[if this post rambles, forgive me, I'm sick and extremely stressed out]
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Blacksmith

To put it simply the legal currency in the United States is the greenback, (all debts public and private), to demand payment in any other currency would be illegal.

Now that does not apply to debts incurred in foreign countries where local money must be used unless there is an agreement to accept some mutual acceptable currency.
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Drake · Tar Sands Joined: Jan 04, 2008 Posts: 34

Nickel

misterno

No currency comes close to US dollar in terms of circulation volume in the world and reputation. Everybody knows America.

Now the only currency that can come close is Chinese Yuan. Not now but in the near future. They have the name, they have the economy they have the influence all over the world not as much as US but it is getting there.

Nickel

Moped

The National Guard.....
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