Does Euro:USD exchange rate affect import beer prices much?

I'd wager the Euro:USD exchange rate doesn't affect prices nearly as much as the Shelton Brothers exchage rate affects them.

 

All I know is Belgian beer is the highest in price at Total wine I have ever written down. as compared to last year all the beer is higher not cheaper, so I would say shipping is the bigger factor, the cost of Fuel.

Euro is down but I never seen it effect prices much and I watch and record prices.

 

Yes he is losing, because the declining dollar requires he use more of them to meet the Euro cost.

This is essentially inflation for the US consumer and inflation is not a good thing, although in this beer scenario the inflation could simply be avoided. (We could consider any strengthening of the dollar as disinflation in this beer scenario.)

The flip side of this is US exports are more competitive, a euro buys more US goods.

 

Having live in Gemany a while back, the exchange rate was something that you learned. Currencies fluctuate. Both the Dollar and Euro have gone down, and as the Euro has been sliding faster, the dollar has gained by losing less.

Might be a good time to head back to Europe.

 

You have it backwards. The dollar isnt decling, the euro is.

Something that would have cost $1.45 last year, costs $1.25 today. You use less dollars to meet the Euro cost, not more.

 

So in the past 6 mos gold is down, copper is down, lots of food commodities (corn, soy, wheat etc.) are up, the euro is down, the japanese yen is up, the gbp is even, coffee is down, lumber is about even but quite volatile, and I could go on forever telling you about what is really happening in the commodity market and illustrating how it does not show what you think it does. Inflation is down from a "high" of just under 4% a year ago to about 1.75% in a time when inflation would actually be preferable because it would spur some investment, spending, and hiring.

So tell me again how the dollar is doing.

If you want to pretend to talk with some authority on economics please do at least 5 minutes of research to backup what you have to say. Newscasters pontificating on the finer points of not knowing shit about shit does not count.

 

You're using less dollars than you were, but you are still using more dollars than if the ER was 1:1.

The recent decline in the euro has only eased the inflation, not eliminated it. That's why I mentioned disinflation.

If I beat a person over the head with a baseball bat 60 times/hour and then drop it back to 50 times/hour they will feel some relief but in terms of the effect on their life expectancy is it really relief?

 

http://en.wikipedia.org/wiki/Purchasing_power_parity

 

Look at this chart, as the curve goes down, the Dollar is buying more Euros.
http://finance.yahoo.com/echarts?s=EURUSD=X Interactive#symbol=;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Edit - that means it is getting stronger vs the Euro

 

Inflation is down from a "high" of just under 4% a year ago to about 1.75% in a time when inflation would actually be preferable because it would spur some investment, spending, and hiring.

How are QE and TWIST working out as far as spurring growth, not too good.

Just what we need, more money in the system when no one is in a position to use it.

You're a freaking genius.

 

No problem with the dollar getting stronger vs the Euro.

If the Yanks are beating the Mets 3 to 1 and the Mets score a run one can certainly say the Mets are coming back, what they can't say is the Mets are winning.

 

Really? What's your baseline for what growth would be without those two programs? You think we would be in the same or a better position if we didn't have as much liquidity in the market? You think that changing the age of the debt that the fed holds to decrease long term interest rates is not something that would spur long term investment? Where did you study economics? Liberty university? I hear they're fully un-accredited.

Look at hiring in the private sector. It is growing at approximately the same rate it was before the recession. The lag on employment would be the public sector which QE and TWIST do not effect.


But back to the OP's question

The exchange rate effects beer prices in the short term, but not in the long term. Since prices are sticky in the short term as the dollar becomes stronger, beer becomes cheaper because European breweries are not adjusting their prices daily as the exchange rate fluctuates. Over time however, they will be relatively stable because if (for example) the euro sees 100% inflation over the next 10 years and the USD sees 0% inflation over the same period the euro will be about 1/2 as valuable vs. the dollar. Breweries will without a doubt change their pricing so that we are still spending the same amount of money on their bottles.

 

Agold,

Consumers are hunkering down. They've seen their home values and retirement savings smashed and many are underemployed or worse. There's a lot of negativity regarding the future, and it's dragging on and on. The consumer isn't going to be there for Uncle Sam, to borrow the "new" money the Fed is creating and use it to grow the economy...at least not right away, although we're already 3, 4, or 5 years into this. You might say this isn't a typical cycle, there's no appetite for "risk".

Some feel QE is meddling, or worse a way to "support" deficit spending. In either case, the debt/GDP ratio is ballooning and when it hits approximately 90% growth begins to be negatively negatively impacted...the US is close to or past that point now. So you have poor growth prospects, potential higher rates to maintain Treasury bonds' attractiveness, and possibly high inflation.
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I don't doubt the dollar getting stronger, with all the EU collapse talk.

All I was saying was, for a US consumer the "unfavorable" ER makes him pay out more dollars for something in Euros.

 

Consumer spending in the past month has not been great, but that indicator is so volatile that I wouldn't use that as an indicator of how people feel about the economy. I would however like to note that the US economic confidence index is at its highest point since the start of the recession.

QE is meddling? Wow. Would you consider congress passing a law meddling or would you consider the supreme court issuing a ruling meddling? QE is the fed's job. They have a mandate to control unemployment and inflation, and this is a tool they have to control unemployment. And as much as people think that we need to reign in spending right now, that is the last thing that we need. When you are coming out of a recession you need deficit spending to spur growth. The problem is not the deficit spending now, but the deficit spending 5 years ago when everything was going well.

Also, our 1 year bond rates are at 0.2%. Even with our huge debt, paying for servicing that debt is not a worry. And that 90% number you cited is BS. The paper was discredited when the underlying correlation was more closely examined. Specific cases show that in this case (as in many) correlation does not equal causality. T bills are the safest investment on the face of the planet right now. No way we have to worry about potential higher rates for the foreseeable future. Where does this assertion come from that we will have high inflation? A guess? Thats cool.

What it seems that you mean by saying that the exchange rate is unfavorable is that it takes more than a dollar to buy one euro. So would you consider the yen to be a trash currency since it takes 79 of them to buy 1 dollar? If tomorrow it took 78, it would be doing better, but they would still be losing? It has been one of the strongest currencies over the past few years and has been beasting the USD and the euro. Read the wiki article I posted on PPP before you talk about an "unfavorable exchange rate".

Please stop.

 

Not sure. I did find it odd. I'll look into it.

Edit:
I think it actually might be an error in the data entry. Found another source and it looks like it is not quite as high as that site mistakenly indicated and I mistakenly repeated. It took a bit of a tumble with some of the stuff going down in the Eurozone, but has been much better than it has been in the past years, which I think the other source accurately depicts.

 

When you are coming out of a recession you need deficit spending to spur growth.

Ok, so where's the growth and why is it taking so long to show up?

Growth coming out of economic downturns is typically much more robust and the downturns don't last so long.

 

Here in Michigan things are looking up, mainly because we were so far down for so long, and had the worst unemployment in the country. First in, first out?

Got to run, going to a groundbreaking for a production brewery. Craft Beer is also in a growth mode here.

 

ST Creme Brulee was released?