orangedog
Navin R Johnson
I'm reading more often about the prediction that the Euro is set to depreciate over the next few years... one forecast put it at about $1.01, another said it will dissolve. One money manager flat out declared that Greece will default between now and three years.
I may be the eternal optimist, but I think there is still a chance for the US to right its financial ship. I don't mean for this to get too political, but assuming we take the right steps (without me defining those right steps), it seems logical to me that the dollar could increase in desirability against the Euro. Private sector activity will of course be a key driver as well.
So what does that mean for our online habit? Seems to me that all else equal, a product produced in Europe will drop in cost for US buyers - things like French and Italian wine come to mind.
However, CCs aren't produced in Europe - otherwise they'd be ECs (tip your waitress) - so is there really much of an impact for us? Day to day, probably not... a small move might benefit us. However, if a supplier in Europe has to buy from Cuba, they will just pay more in Euros, meaning the price for their customers will increase in Euros... this means we'll pay the same in Dollars. Suppliers in other countries who charge in Euros will likely take a similar path - for example, a Chinese operation will pay Cuba using Yuan, and if they charge in Euros, they will just increase the cost in Euros, keeping the Dollar cost steady. Essentially this is the law of one price.
The alternative I can think of is true price deflation, meaning that a decrease in the value of the Euro reduces the international discretionary spending for Europeans, and if they are a large enough market, Cuba will have to respond by lowering prices to continue volume (considering the profit trade-off, of course). Then, the cost in Euros wouldn't increase in the same way the currency deflates, meaning on a dollar basis we win.
Problem is the same thing that happened to wine - and to a lesser degree whisky - could happen to cigars. Namely, the influx of the Chinese buyer. There have been some red flag reports and articles coming out of China too, but if that materializes into a slowdown it could be a longer time coming.
Any thoughts on this? A lift of the embargo could make it all moot - but who knows, right?
I may be the eternal optimist, but I think there is still a chance for the US to right its financial ship. I don't mean for this to get too political, but assuming we take the right steps (without me defining those right steps), it seems logical to me that the dollar could increase in desirability against the Euro. Private sector activity will of course be a key driver as well.
So what does that mean for our online habit? Seems to me that all else equal, a product produced in Europe will drop in cost for US buyers - things like French and Italian wine come to mind.
However, CCs aren't produced in Europe - otherwise they'd be ECs (tip your waitress) - so is there really much of an impact for us? Day to day, probably not... a small move might benefit us. However, if a supplier in Europe has to buy from Cuba, they will just pay more in Euros, meaning the price for their customers will increase in Euros... this means we'll pay the same in Dollars. Suppliers in other countries who charge in Euros will likely take a similar path - for example, a Chinese operation will pay Cuba using Yuan, and if they charge in Euros, they will just increase the cost in Euros, keeping the Dollar cost steady. Essentially this is the law of one price.
The alternative I can think of is true price deflation, meaning that a decrease in the value of the Euro reduces the international discretionary spending for Europeans, and if they are a large enough market, Cuba will have to respond by lowering prices to continue volume (considering the profit trade-off, of course). Then, the cost in Euros wouldn't increase in the same way the currency deflates, meaning on a dollar basis we win.
Problem is the same thing that happened to wine - and to a lesser degree whisky - could happen to cigars. Namely, the influx of the Chinese buyer. There have been some red flag reports and articles coming out of China too, but if that materializes into a slowdown it could be a longer time coming.
Any thoughts on this? A lift of the embargo could make it all moot - but who knows, right?
