Why the 20% market drop is actually much worse than it seems

[shiv]

Not only has the market dropped 20% but the value of the currency that operates in that market has dropped 15%. So what looks like 20% drop is actually a 30% loss in value.

Someone correct me if I'm wrong.

 

[GarnetPild]

Not only has the market dropped 20% but the value of the currency that operates in that market has dropped 15%. So what looks like 20% drop is actually a 30% loss in value.

Someone correct me if I'm wrong.

 

[Rebarcock.]

Where are you getting 15% drop in dollar value? I would have thought it more than that.
I read this week that the ruble was up 11% vs the petrodollar. Best performer of all countries. Lets go Brandon.
Fucking adults in the room huh?

 

[ChicagoFats]

Not only has the market dropped 20% but the value of the currency that operates in that market has dropped 15%. So what looks like 20% drop is actually a 30% loss in value.

Someone correct me if I'm wrong.

Relativity. What has the dollar dropped 15% against?

 

[shiv]

Where are you getting 15% drop in dollar value? I would have thought it more than that.
I read this week that the ruble was up 11% vs the petrodollar. Best performer of all countries. Lets go Brandon.
Fucking adults in the room huh?

I was just estimating really.

I think the idea I'm trying to get out is that The Crash has already happened and going conservative in investments or staying conservative could be near financial suicide at this point

 

[shiv]

Relativity. What has the dollar dropped 15% against?

I think I see where you are coming from, but tell me more

 

[VosFrost]

Dollar is the strongest it’s been against all major currencies in a long time, quick look at Bloomberg charts

GBP: USD strongest since May 2020(Brexit dipped below 1.15)

EUR: USD strongest since March 2017. If we break much lower, will be strongest since 2003

JPY: USD strongest since 1998

This will continue as the US aggressively raises rates while the rest of the world stays behind. It will also continue as US remains as haven currency during times of conflcit(especially since that’s been stripped from the Yen)

Edit: source, I work in the currency markets

 

[ChicagoFats]

I think I see where you are coming from, but tell me more

Bascially what @VosFrost said. Dollar has been strong recently, not sure its dropped 15%. I don't track currencies that much so he will know a lot better than i do.

 

[VosFrost]

Bascially what @VosFrost said. Dollar has been strong recently, not sure its dropped 15%. I don't track currencies that much so he will know a lot better than i do.

To note, if Ukraine dies down and the ECB starts raising rates, as expected, USD will “depreciate” 15-20% over the next year from current levels.

Additional color, a weaker dollar is good for domestic manufacturers as their goods will be more competitive internationally as the buying power of the dollars allows us to buy more internationally.

A stronger dollar makes it difficult for those companies to be competitive.

 

[shiv]

To note, if Ukraine dies down and the ECB starts raising rates, as expected, USD will “depreciate” 15-20% over the next year from current levels.

Additional color, a weaker dollar is good for domestic manufacturers as their goods will be more competitive internationally as the buying power of the dollars allows us to buy more internationally.

A stronger dollar makes it difficult for those companies to be competitive.

Thanks man. Always great to have experts in the room

 

[American Deplorable]

The dollar is up actually as other posters have pointed out.

 

[shiv]

Can we say the the purchasing power of the dollar has decreased? At least nationally, or is that not true

 

[VosFrost]

Can we say the the purchasing power of the dollar has decreased? At least nationally, or is that not true

Its nuanced, obviously a US Dollar can buy less today than a year ago.

I’d consider 3 specific categories:

1. Strength of a currency, generally based on comparing it to other currencies. Supply and demand definitely plays a role.

2. The supply of that currency - how much new currency have we “created” recently?

3. The cost of goods and services - this is increasing as raw materials and labor increase.

 

[Rebarcock.]

Bascially what @VosFrost said. Dollar has been strong recently, not sure its dropped 15%. I don't track currencies that much so he will know a lot better than i do.

I think he is actually meaning purchase power but maybe that is just me

 

[Rebarcock.]

Bascially what @VosFrost said. Dollar has been strong recently, not sure its dropped 15%. I don't track currencies that much so he will know a lot better than i do.

I think he is actually meaning purchase power but maybe that is just me

 

[shiv]

Its nuanced, obviously a US Dollar can buy less today than a year ago.

I’d consider 3 specific categories:

1. Strength of a currency, generally based on comparing it to other currencies. Supply and demand definitely plays a role.

2. The supply of that currency - how much new currency have we “created” recently?

3. The cost of goods and services - this is increasing as raw materials and labor increase.

How much new currency has been created recently?

 

[tiderollsonu]

I tied my shoes this morning

 

[Rebarcock.]

How much new currency has been created recently?

6-8 trillion since covid iirc
Hell it may be more. I quit counting. Pretty sure we are 30+trillion in debt was 20 when Hussein left iir

 

[VosFrost]

How much new currency has been created recently?

6-8 trillion since covid iirc
Hell it may be more. I quit counting. Pretty sure we are 30+trillion in debt was 20 when Hussein left iir

There’s a great chart and stat that we’ve printed X% of all currency in the past 5 years.

 

[Rebarcock.]

There’s a great chart and stat that we’ve printed X% of all currency in the past 5 years.

Wellwerewaiting.gjf

 

[American Deplorable]

Can we say the the purchasing power of the dollar has decreased? At least nationally, or is that not true

This would be more accurate.

The dollar has grown in strength since COVID because demand has skyrocketed.

The cost of goods and services going up is pretty much baked into every day life. The reason people notice inflation right now is only because it’s higher than normal.

 

[shiv]

Its nuanced, obviously a US Dollar can buy less today than a year ago.

I’d consider 3 specific categories:

1. Strength of a currency, generally based on comparing it to other currencies. Supply and demand definitely plays a role.

2. The supply of that currency - how much new currency have we “created” recently?

3. The cost of goods and services - this is increasing as raw materials and labor increase.

So based on these three categories, where do you see that we stand?

 

[dirtytoeddawg]

Not only has the market dropped 20% but the value of the currency that operates in that market has dropped 15%. So what looks like 20% drop is actually a 30% loss in value.

Someone correct me if I'm wrong.

Not to mention an entirely new market (historically wise) just shed over a trillion in value. Crypto

 

[shiv]

Not to mention an entirely new market (historically wise) just shed over a trillion in value. Crypto

Where does that trillion go? That's got to be entire countries stepping out of the market

 

[VosFrost]

So based on these three categories, where do you see that we stand?

Overall USD weakening but not til 2023/2024.

US Dollar will correct to ~1.15-1.20 for EUR, 1.28-1.35 for GBP.

JPY will come back to 1.20. The global central banks will drive a lot of that as everyone battles inflation .

 

[shiv]

Overall USD weakening but not til 2023/2024.

US Dollar will correct to ~1.15-1.20 for EUR, 1.28-1.35 for GBP.

JPY will come back to 1.20. The global central banks will drive a lot of that as everyone battles inflation .

So do you trade currencies or provide analysis or something?

 

[VosFrost]

So do you trade currencies or provide analysis or something?

Currency sales / risk management for major bank.

How can companies manage their international risk and make foreign currency payables and receivables as efficiently as possible?

For a generic example, imagine Ford has 100MM in EUR deposits that are earning negative 50 bps. What happens if EUR depreciates 5% or 10% or 20%? How does that affect their bottom line and how do they manage that risk?

 

[shiv]

Currency sales / risk management for major bank.

How can companies manage their international risk and make foreign currency payables and receivables as efficiently as possible?

For a generic example, imagine Ford has 100MM in EUR deposits that are earning negative 50 bps. What happens if EUR depreciates 5% or 10% or 20%? How does that affect their bottom line and how do they manage that risk?

Very cool. You and @ChicagoFats should put your heads together and make us all billionaires

 

[hmt5000]

Relativity. What has the dollar dropped 15% against?

Every commodity and service on Earth.

 

[GarnetPild]

This would be more accurate.

The dollar has grown in strength since COVID because demand has skyrocketed.

The cost of goods and services going up is pretty much baked into every day life. The reason people notice inflation right now is only because it’s higher than normal.

Yeah, like 5-10x higher than normal...a couple percent is normal, but not shit like we are seeing today.

Technically the dollar may be strong, compared to other currencies, but average Americans' dollars are just buying goods and services locally...where their value has plummeted in the last couple of years.

 

[Tell_Sackett]

How much new currency has been created recently?

A whole lot....

 

[American Deplorable]

Yeah, like 5-10x higher than normal...a couple percent is normal, but not shit like we are seeing today.

Technically the dollar may be strong, compared to other currencies, but average Americans' dollars are just buying goods and services locally...where their value has plummeted in the last couple of years.

This is why we gotta start making stuff from start to finish here in The US again. It would give The US consumer and producer much more control over changes in price.

There is plenty of work force who have a desire / demand to upgrade into these sorts of jobs to boot. Add on the desire from the broader American public for local production and it’s obvious which direction things should be trending.

God bless Donald Trump for being brave enough to tap into this sentiment!

 

[Zgdaf]

 

[Cheddarwurst]

Currency sales / risk management for major bank.

How can companies manage their international risk and make foreign currency payables and receivables as efficiently as possible?

For a generic example, imagine Ford has 100MM in EUR deposits that are earning negative 50 bps. What happens if EUR depreciates 5% or 10% or 20%? How does that affect their bottom line and how do they manage that risk?

If you were cash heavy, could you explain what you’d do with your money like you were telling a 4 year old?

 

[shiv]

If you were cash heavy, could you explain what you’d do with your money like you were telling a 4 year old?

 

[Rebarcock.]

This would be more accurate.

The dollar has grown in strength since COVID because demand has skyrocketed.

The cost of goods and services going up is pretty much baked into every day life. The reason people notice inflation right now is only because it’s higher than normal.

Saluda alm bgahata

Green
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