A blog by an American expatriate living in the heart of New Europe


"It's a lateral transfer" -- George W. Bush, 43rd President of the United States
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  Name:
  Gustav
  Location:
  Warsaw, Poland

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*roundtrip ticket

Sunday, December 05, 2004

Breaking up is hard to do

According to this Friday's lead article on EU Business Online, when it comes to the transatlantic relationship, Bush has finally come to his senses.

A cheap dollar can't do it all to close the trade deficit.

The Economist has an interesting article on the dollar's decline as the world's reserve currency.

As long as I've been here, I've calculated złoty's to dollars at a rate of approximately 4 to 1. One złoty was always worth about one quarter.

Friday, the dollar closed at 3.1466 złoty.

11 Comments:



Blogger Andrew said...

Should have kept my money in Zloty.

12/06/2004 08:42:00 PM  


Blogger Gustav said...

One good thing about the strong złoty is that plane tickets are cheap. Gustav will make it home for Christmas.

You might be interested Andrew, that Belka and the NBP are fighting over what to do about the strong złoty. (PM)Belka and (Deputy PM and Econ Min) Hausner think intervention is needed, whereas cheif central Banker Leszek Balcerowicz believes intervention is a bad idea, and thinks the złoty will return to reasonable levels on their own. Interestingly, his vice president, Krzysztof Rybinski, has repeated that the złoty is overvalued and he's right.

From Interfax:

Belka said:
"The appreciation worries not only the government but also the management of the central bank," Belka said. "In the nearest time I will ask the governor of the central bank and I will invite the Monetary Policy Council and the central bank's management for a meeting [to discuss] the exchange rate policy and what can we do in an environment where the zloty has very rapidly appreciated in the past few months."

The Polish currency has been strengthening as of Poland's entry to the EU on May 1, 2004. The zloty has gained over 17% to the dollar and over 11% to the euro from the beginning of the year.

-------

Rybinski believes that American speculators are pushing the złoty higher than it should be. The economy here is doing well, but not that well.

With the dollar so low, people seem to be looking to "hot" currencies- making exports to the U.S. very difficult. It could really slow down this emerging "Polish tiger."

12/06/2004 10:45:00 PM  


Blogger Andrew said...

I am thiking about becoming one of those American speculators- the WIG is much outperforming to NASDAQ. See this chart.
I am pretty convinced that the US is a country past its prime. Will our generation as a whole ever be able to have the same standards of living as our parents? How about Poles of this generation?

12/07/2004 09:03:00 PM  


Blogger Andrew said...

Here is the link to that promised chart
http://quote.bloomberg.com/apps/cbuilder?ticker1=WIG20&exch1=IND&ticker2=NAS&exch2=US&ticker3=&exch3=US&range=1y%3AOne+Year&type=gp_line2%3ALine+Graph&Submit.x=40&Submit.y=7&Submit=Submit

12/07/2004 10:17:00 PM  


Blogger wafflestomper said...

i like the icon on the address line! 20 bonus style points to gustav! that makes you tied with redneck even when you factor in his bonus for putting his record collection back in the crates. tie goes to gustav because redneck is saying to himself "what icon?"

12/08/2004 07:23:00 PM  


Blogger Gustav said...

Nothing wrong in speculating, Andrew, capitalism depends on risk. Just be careful. Make your money and get out, the złoty is gaining not only against the dollar, but against the euro, and I'm not so sure it should be, at least not that much. I think the złoty is in for a correction soon. For my part, I will be buying undervalued dollars with my overvalued złotys.


I am pretty convinced that the US is a country past its prime. Will our generation as a whole ever be able to have the same standards of living as our parents?


Pshaw, my friend, don't be so pessimistic. Standards of living are increasing all the time, although wages and salaries may not be living up to our parents' standards. There's still time, and I believe in America as a concept. Things will get better. Bad leaders and tough times come and go-- Something special about America remains. (feel free to heave now if that was a bit too cheesy for you) I do beleive, however, that America's time as the lone superpower may be fading. The EU is becoming stronger, and we all know about emerging China. I estimate it's the natural course of events, but we'll have to learn to live in such a world. "You're either with us or against us" will be a much more difficult line to take.


How about Poles of this generation?Signs are that things are getting better-- The government is on the right track as far as privatization and (yes) lower taxes. Wages are set to rise next year by four or five percent. Even Polish coal is profitable!. Still, unemployment can't seem to drop below 18 percent-- too many structurally unemployed if you ask me. This country simply has too many farmers. Something will have to be done with them, or we'll have to just wait until they die off. Until then, wages will remain low and unemployment high. But eventually, eventually, more investment will mean higher wages and better goods for Poles.

122 Km of highway is going to be built next year (twice as much as last year)-- can you believe it?!

Re: Your Nasdaq/WIG 20 chart-- extremely interesting, but it only covers one year-- a year in which EU entry has fuelled Polish optimism and a flood of investment, also a year in which high oil prices and an election have fuelled uncertainty in the US. None of that will last. The WIG 20 is also a bluechip index, and the Nasdaq is a tech index. Here is the WIG 20 against the Dowand here is the WIG against the Dow. You can see that the Dow didn't do so well throughout the year, but that lately it's caught up. I still think there's hope for us yet. . .

For those of you bewildered by all this, the WIG is the main index on the Warsaw Stock Exchange. Something like the Dow on the NYSE. If y'all are interested, here's the WSE's site in English.

12/08/2004 11:09:00 PM  


Blogger Gustav said...

Thanks stomper, I was hoping the folks at home would notice the icon. I worked hard on it. Wanted one for a long time and found that if you fiddle around on the internet enough, you can find some directions on how to do it. Since I'm a bleeding-heart liberal, I'll share my secrets with Red, if he asks nice.

Stomper, have you discovered the wonders of tabbed browsing? The icon in the address line also appears on the tabs, making them much easier to navigate if you've got 20 or so tabs open (not enough room for text). The icon should also appear in your favorites/bookmarks sidebar. I've found that on some versions of explorer, however, it doesn't. Not sure why.

Why did Red get rid of the album collection?

12/09/2004 12:02:00 AM  


Blogger Andrew said...

The WIG is down today. : )

Yes, Polish farms are on a neccessary and inevitable path to consolidation, but it is too bad, the Polish countryside is really nice.

I really hope though that these diplaced farmers don't all end up selling junk on the streets of Warsaw.

122KM of highway is alot, especially at the pace of Polish construction. I watched the replacement of the tram tracks from the balcony at Plac Nar. Lets just say that it was Boom times for U Bola's beer sales.

Glad you have joined the ranks of firefox users Gus, and I agree, nice, tab pic.

12/09/2004 08:14:00 PM  


Blogger wafflestomper said...

gustav - fully use the tab function on mozilla and its there in the folder holding my favorite links... only not at work! 'adblock' is my favorite tool in firefox. if you have blog ads, i can't see them. nice to kill some of the flashing crap that hotmail seems to like, too.

i think rt got rid of the records because it took too long to download for some. i have cable modem, and i would still have to wait for photobucket to finish downloading before i could bring up a comment box. rt gave up too early on firefox, but i think he likes his spell checker in ie. my friend had his blank homepage in ie hijacked by oztv and it was a motherbear undoing that one. oztv took control of his ie search too and seems to have done a little bit of code changing there - we haven't been able to figure out how to undo that one.

i think you'd have to refer to that is a tab'by' pic, andrew.

12/09/2004 10:29:00 PM  


Blogger Andrew said...

Your right, stomp, its a Tab'by' pic. Hahaha. My favorite extensions are EggOn, an egg timer, and on a more serious note Search Status, which displays Alexa ranks for each page. Gonna try adblock.

12/09/2004 11:09:00 PM  


Blogger Gustav said...

Although I switched to Mozilla/Firefox long ago, you guys are so far ahead of me. Andrew, can you let me in on what EggOn is? Where can I find this ad block?

For those interested (i.e.Andrew): Gustav spoke with one of the board members of the U.S. ExIm Bank today. Seems the U.S. is highly willing to lend to LOT at extremely advantageous rates, if only they decide to buy the new Boeing 7E7, and not the Airbus A380. They also believe that it might be a good idea for the Poles to give all other European businesses the finger and use their newly gained EU structural funds to pay for waste-management, telecom, and transport development provided by American businesses. Hey, at least you've got to give it to the Bush admin for trying to close the trade gap. The bank offers no funding to American companies who want to import Polish goods, despite their name.

Using taxpayer dollars to fund the purchase of American goods by other countries: Is this not wealth redistribution, with the wealth laundered through another country?

12/09/2004 11:50:00 PM  

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