/finance/ - Finance

>>53 (OP) 
As someone living in the funnier part of Europe, I've warmed up to the idea of joining the eurozone, because in practice it would mean a lot less inflation and lower interest on loans. The European central bank has a policy of doing absolutely nothing for the most part, so we don't even have to worry about some sinister plot on their part. And if worst comes to worst, we can always just switch back to our own currency, but it would be backed by an economy that could grow stronger over the years due to the aforementioned lower inflation and interest.

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A remnant of French colonialism that there a ton of African states that use one of two currencies pegged to the Euro, the West African Franc and the Central African Franc. Originally both of them were pegged to the French Franc, and you need 100 of either to get one a single French Franc. Then in late the 90s it was time to introduce the Euro, and so the franc was pegged to it at 6.55957 to €1. This means to this day 1 Euro is worth 655.957 of either African francs, so 1 eurocent is the equivalent of 6.55957. 

Honestly, this might not be that bad of a deal for them. True, they can't just do whatever they want with these currencies, but they don't have to worry about inflation, and doing nothing is usually the best economic policy.

>>68
https://en.wikipedia.org/wiki/Maltese_scudo
There is one more currency pegged to the Euro: the Maltese Scudo. It is the official money of the Knights of Malta (Malta itself uses the Euro). It is worth exactly €0.24, which is a bit strange until you read that it is also subdivided to 12 tari, therefore it would be better to say that a single tari is worth 2 eurocents.

Today american dollar surpassed euro in value.

I guess it has two parts: for one, investors would rather keep their money in the currency of a superpower, as opposed to the currency of a glorified economic alliance with a war on its doorstep and mounting problems caused by shortages. The other part is that European countries suddenly have to import a lot more energy from new sources, and the world market prefers burgerpesos over europesos, so they have to exchange a lot of the latter for the former. Add these two together, and there's a lot euro for sale. I don't think that we'll have a sudden and dramatic collapse come winter, but I can imagine it steadily losing even more of its value.

>>115
Maybe I'm just awfully optimistic, but the current situation of switching to non-Russian oil&gas might only cause a relatively short disturbance overall. There's plenty of both under the North Sea, the Black Sea, and the Mediterranean Sea, and the former two are currently untapped. It'll cause quite a lot of geopolitical arm wrestling, but once they offshore rigs are there and the pipelines are ready, cheap hydrocarbons will be back on the European menu. Until then, we will have to either put up with a big recession or a small collapse as governments around the continent toppled.

Of course, I might be completely wrong about those untapped resources, and by next year I won't be posting here because I'll have no electricity.

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Turkey and Russia are about to make some deals where the Turks pay in Roubles.

The britbongs did a Margaret Thatcher and the pound dropped again.

>>182
What did they do exactly? I know that they are in the process of replacing all the paper banknotes with polymer ones, and then soon they will replace those with the ones that have the head of the new honcho, but I assume you are not speaking about either of these.

>>185
The Truss Admin. cut taxes on the wealthy in the middle of record high inflation, leading to even more inflation as spending increased, citing what basically amounts to "it'll trickle down". I don't know anything about britbong politics, but even her own party seems to hate the idea

>>186
So that's what's up. I've seen headlines criticizing "tax cuts" to the point that the IMF is publicly telling them it's a terrible idea, but I had no idea what had gotten everyone so worked up about it, given that I thought I'd also seen a bunch of other countries cut taxes without any fuss as a way to ease cost of living.
But now I read that these particular tax cuts come in the form of eliminating the highest income tax bracket and removing a cap on bonuses for bankers.

By all indicators, the local economy here is about to hit a brickwall at high speed, and both the government and the national bank are run by clowns, and yet the local monopoly money is actually getting stronger. It's still around 10% weaker against the €uro compared to January, but not that long ago the difference was more than 20%. I of course had to invest in € some of my monopoly money, and as it stands I'm actively losing money with that investment.

Can someone confirm my understanding on historic american money/finance is correct? 

Silver and Gold Certificates were paper notes that various private banks would ask the Treasury for directly, when they had a dearth of notes but did have the silver and gold to back them up. Anyone who had one could ask for the equivalent amount of gold or silver and the bank in question was legally required to give them the gold or silver (assuming they had it on hand).

Treasury Notes were issued to banks directly who asked for them (like the certificates), except the banks didn’t need the equivalent gold or silver to back them up and any individual who held them couldn’t request an equivalent amount of gold or silver from a bank (individuals could obviously trade gold and silver with them if they wanted to, just weren’t legally required to accept it).

Federal Reserve Notes are issued by the Fed to banks who ask for them as a loan, and in return those banks are required to pay interest to the Fed with the hopes the interest will offset inflation. 

Is this right?

>>214
And in the weeks and months since that it turned around to the point that I'm losing money by keeping it in euro. 
>>222
As far as I understand you are correct, but American banking is the kind of mess where you can get lost for a lifetime, and I don't have any actual books on this subject.

I have seen some posts about one US bank in California going through some problems. I doubt this is enough to influence the of the banking sector or trigger anything 2008 level. Why are people so excited about it?

>>226
Because after COVID and the whole Ukrainian happening the world economy is in a bit of a disarray, so people except bad things to happen, therefore they are looking for the signs of those bad things finally starting to happen. Apparently this is what happened:
>the bank in question kept nearly all of its money in bonds
>bonds have a fixed interest rate*, a face value and a market value
>the face value and a market value are different, because bonds released at different times can have different interest rates, and you don't want to pay $100 for a bond with a face value of $100 and a 5% interest rate if you can instead pay for a bond that has a face value of $100 and an interest rate of 10%
>if a central bank raises the interest rate then bonds released after the raise have to have a higher interest rate
>this means that bonds released before the raise go down in market value simply because they are not as good an option
>in this case you can either keep your old bonds and accept that you get less money overall
>or sell them at a discount to someone who doesn't mind the lower interest rate, and use the proceedings to buy newer bonds
Now, the bank wanted to sell its older bonds and buy newer ones, but doing so would have lead to some temporary losses as they'd have to sell them at a discount. To make up for that loss they wanted to sell some of their shares, except that investors assumed they must be in trouble, and so they too started selling the shares, turning it into a self-fulfilling prophecy. 

*The actual interest rate might be tied to something else, so it can fluctuate overall, but again, it is tied to something else, and it's not just up to the whims of whoever release the bonds to randomly set a new interest rate, so you can have some expectations about how much those kind of bonds might pay down the lane.

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>>224
The euro doesn't have a good future. I can't get rid of my euros fast enough.

>>226
SVB was basically THE bank to go to for vaporware and tech company loans. They also heavily used ESG in determining if you got lending money or not. Roughly 90% of their customers were tech businesses who shouldn't have qualified for FDIC. Them alone collapsing isn't a big deal but SVB has caused all the other woke nonsense banks to reassess their assets which is causing runs on the banks.

While not apparent at the time of your post, the feds have also promised people with money in SVB UNLIMITED INSURANCE for all their bad decisions which incentivizes the Chinese and other bad actors to buy into SVB in order to try and buy American debt on the cheap.

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>>230
> bad actors
You already have the baddest of actors in charge of the State Department and Federal Reserve. What the chinese do or don't do won't have any significant effect in the grand scheme. At most they'll manage to make a few bucks and maybe afford to buy some more tonnes of gold to shore up their BRICS system.
In fact, Biden just veto'd a new bill that was against ESG investing. So expect the woke stuff to remain in place all across the board in american firms.
Credit Suisse also just went bust, but it was being badly managed for a long time, so it's not a big surprise. And also it has the woke virus.