How has it come about that so many of the world's major commodities (oil,
aircraft, etc) are priced in in US dollars ?
Is it difficult to change this ?
I'm wondering why Airbus don't change to pricing their planes in euros.

Jim Hawkins

"Jim Hawkins"  wrote in message 
news:qJ_1j.273207$1l2.28616@newsfet01.ams...
> How has it come about that so many of the world's major commodities (oil,
> aircraft, etc) are priced in in US dollars ?
> Is it difficult to change this ?
> I'm wondering why Airbus don't change to pricing their planes in euros.
>

I thought that strange too, maybe Boeing sell their planes in Euros!

The US was once the world's largest economy, and thus perceived to have the 
safest currency.

As the dollar's purchasing power has declined relative to other currencies, 
many large dollar holders are worried that there might be a better medium of 
exchange, and are concerned that their 'pieces of paper' won't be worth a 
lot. You can see the result on the price of oil. You now need more $ paper 
per barrel.

Ultimately, all currencies based on paper become worthless, or at least as 
low as the value of that piece of paper. So at some point, the owners of the 
oil and aircraft might ask for payment in something with more worth. (Euros, 
Gold etc), unless they can be 'persuaded' otherwise. Persuasion might 
include an aircraft carrier on their doorstep, or other means to ensure that 
confidence is not breached, if it is not already.

It's a matter of how close that dollar becomes to only being able to buy 
another similar sized piece of paper as to how long confidence in it will 
survive. The price is manipulated by the central bank increasing or 
decreasing liquidity and interest rates to rein in or relax the number of 
dollars in circulation, as well as demand for the purchases and sales of the 
currency. E.G. I want to build a factory in Arizona, I need to buy dollars, 
thus putting the dollar price up. I want to sell that factory and convert my 
money into Pounds/Euros etc, it has the opposite effect.

If I can't get the required transport and education I need for my product 
and workers, then this helps to reduce demand for the dollar by making it 
less likely that I would build the factory and thus need dollars in the 
first place. So you can see at least one factor that might weigh against any 
currency. You can see that there is a snowball effect as the currency 
becomes worth less, then any foreign investment has a tendency to pull out 
due to lowered returns and a flight to safety, dragging the currency down 
and making other investers start to pull their money out. At some point, 
theoretically,  investment in the US/dollar will become a good idea again.

Long term, the dollar may disappear and be replaced by an alternative 
(shared with Canada/Mexico maybe) currency, that same way that most of 
Europes' have.

"super"  wrote in message
news:13kjn835ms4d413@corp.supernews.com...
>
> "Jim Hawkins"  wrote in message
> news:qJ_1j.273207$1l2.28616@newsfet01.ams...
>> How has it come about that so many of the world's major commodities (oil,
>> aircraft, etc) are priced in in US dollars ?
>> Is it difficult to change this ?
>> I'm wondering why Airbus don't change to pricing their planes in euros.
>>
>
> I thought that strange too, maybe Boeing sell their planes in Euros!
>
> The US was once the world's largest economy, and thus perceived to have
> the safest currency.
>
> As the dollar's purchasing power has declined relative to other
> currencies, many large dollar holders are worried that there might be a
> better medium of exchange, and are concerned that their 'pieces of paper'
> won't be worth a lot. You can see the result on the price of oil. You now
> need more $ paper per barrel.
>
> Ultimately, all currencies based on paper become worthless, or at least as
> low as the value of that piece of paper. So at some point, the owners of
> the oil and aircraft might ask for payment in something with more worth.
> (Euros, Gold etc), unless they can be 'persuaded' otherwise. Persuasion
> might include an aircraft carrier on their doorstep, or other means to
> ensure that confidence is not breached, if it is not already.
>
> It's a matter of how close that dollar becomes to only being able to buy
> another similar sized piece of paper as to how long confidence in it will
> survive. The price is manipulated by the central bank increasing or
> decreasing liquidity and interest rates to rein in or relax the number of
> dollars in circulation, as well as demand for the purchases and sales of
> the currency. E.G. I want to build a factory in Arizona, I need to buy
> dollars, thus putting the dollar price up. I want to sell that factory and
> convert my money into Pounds/Euros etc, it has the opposite effect.
>
> If I can't get the required transport and education I need for my product
> and workers, then this helps to reduce demand for the dollar by making it
> less likely that I would build the factory and thus need dollars in the
> first place. So you can see at least one factor that might weigh against
> any currency. You can see that there is a snowball effect as the currency
> becomes worth less, then any foreign investment has a tendency to pull out
> due to lowered returns and a flight to safety, dragging the currency down
> and making other investers start to pull their money out. At some point,
> theoretically,  investment in the US/dollar will become a good idea again.
>
> Long term, the dollar may disappear and be replaced by an alternative
> (shared with Canada/Mexico maybe) currency, that same way that most of
> Europes' have.
>
>
>

Thanks, 'super',  for taking the trouble to explain things to an economic
ignoramus.
What's stopping the Iranians carrying out their threat to set up a
Euro-traded oil bourse ?
How was it that George Soros was able to wreak the havoc he did to the pound
sterling ?  Simply by selling a vast amount of sterling ? Or was there some
other mechanism ?
Could some speculator do the same to the dollar ?

Jim Hawkins

"Jim Hawkins"  wrote in message 
news:n0D2j.309292$1l2.55712@newsfet01.ams...
>
> "super"  wrote in message
> news:13kjn835ms4d413@corp.supernews.com...
>>
>> "Jim Hawkins"  wrote in message
>> news:qJ_1j.273207$1l2.28616@newsfet01.ams...
>>> How has it come about that so many of the world's major commodities 
>>> (oil,
>>> aircraft, etc) are priced in in US dollars ?
>>> Is it difficult to change this ?
>>> I'm wondering why Airbus don't change to pricing their planes in euros.
>>>
>>
>> I thought that strange too, maybe Boeing sell their planes in Euros!
>>
>> The US was once the world's largest economy, and thus perceived to have
>> the safest currency.
>>
>> As the dollar's purchasing power has declined relative to other
>> currencies, many large dollar holders are worried that there might be a
>> better medium of exchange, and are concerned that their 'pieces of paper'
>> won't be worth a lot. You can see the result on the price of oil. You now
>> need more $ paper per barrel.
>>
>> Ultimately, all currencies based on paper become worthless, or at least 
>> as
>> low as the value of that piece of paper. So at some point, the owners of
>> the oil and aircraft might ask for payment in something with more worth.
>> (Euros, Gold etc), unless they can be 'persuaded' otherwise. Persuasion
>> might include an aircraft carrier on their doorstep, or other means to
>> ensure that confidence is not breached, if it is not already.
>>
>> It's a matter of how close that dollar becomes to only being able to buy
>> another similar sized piece of paper as to how long confidence in it will
>> survive. The price is manipulated by the central bank increasing or
>> decreasing liquidity and interest rates to rein in or relax the number of
>> dollars in circulation, as well as demand for the purchases and sales of
>> the currency. E.G. I want to build a factory in Arizona, I need to buy
>> dollars, thus putting the dollar price up. I want to sell that factory 
>> and
>> convert my money into Pounds/Euros etc, it has the opposite effect.
>>
>> If I can't get the required transport and education I need for my product
>> and workers, then this helps to reduce demand for the dollar by making it
>> less likely that I would build the factory and thus need dollars in the
>> first place. So you can see at least one factor that might weigh against
>> any currency. You can see that there is a snowball effect as the currency
>> becomes worth less, then any foreign investment has a tendency to pull 
>> out
>> due to lowered returns and a flight to safety, dragging the currency down
>> and making other investers start to pull their money out. At some point,
>> theoretically,  investment in the US/dollar will become a good idea 
>> again.
>>
>> Long term, the dollar may disappear and be replaced by an alternative
>> (shared with Canada/Mexico maybe) currency, that same way that most of
>> Europes' have.
>>
>>
>>
>
> Thanks, 'super',  for taking the trouble to explain things to an economic
> ignoramus.
> What's stopping the Iranians carrying out their threat to set up a
> Euro-traded oil bourse ?

Apart from the aforementioned Aircraft Carriers, not much. But it's not 
actually in their own interest to bring the dollar down, because then so 
does their income.
I think I'mADinnerJacket might get a bit of a short term kick out of such a 
move, but the stuff I've read says it would be bad for Iran longer term. And 
does Iran want a shed load of Euros anyway? I doubt many Iranians want to 
buy German Sausage, although they might like the cars. If most of their 
their imports are priced in Dollars, e.g. Machinery, pharmaceuticals or 
whatever, then it's all pointless. I think Russia is a big trading partner, 
and probably the Chinese. What currency do THEY want/accept for Iranian 
imports?

> How was it that George Soros was able to wreak the havoc he did to the 
> pound
> sterling ?  Simply by selling a vast amount of sterling ? Or was there 
> some
> other mechanism ?

Exact same situation as Northern Rock. Both were fundamentally overvalued. 
And thus vulnerable to short selling.
Let's take your house as an example. You could say it was worth £Billion. It 
might well be in a number of years, so the market might go crazy and start 
speculating that the trading value of the house is worth £Billion. Then 
George Soros comes along and short-sells your house, because he looks at the 
fundamentals such as wages in your area etc. By the action of short selling, 
the rest of the market starts to look more closely at the massive trades 
against the item, and starts to re-evaluate things for themselves. This is 
what happened to NR and the Pound. George Soros realised "The Emporer had no 
clothes", in a market unprepared for the one-day 'raid' that Soros 
performed. Where he really made his money was from UK Government buying back 
the GBP to try to keep the exchange rate within the ERM limits. It was like 
a tug of war where the Gvt keep letting more and more rope out, and Soros 
keeping taking more and more saying 'That'll do nicely!" His anticipation of 
this action led to the huge profit.

In a way it's taking advantage of a price disparity, only most people assume 
that it only works for rising prices. E.g. A share in a company that has 
just discovered the secret of eternal youth is likely to go UP, and you're 
the only person who knows this so you buy the shares going 'long', rather 
than the shorting that Soros did.

> Could some speculator do the same to the dollar ?

Warren Buffet already has a while back, but I think his timing was out. His 
was more of a long-term option than a one-day smash-and-grab, though.

Others speculators are doing it constantly. Multi-$billion hedge funds 
routinely bet on small differences in value, as not all the differences or 
potential profits are on the scale that Soros saw.

The big ones make it to the headlines.You've also got to realise that no-one 
is *doing* anything to the dollar, share or whatever. They're just taking 
advantage of a market anomoly, i.e Over or underpriced relative to a sane 
value. That said, since the Chinese own zillions of dollars, they could ask 
for them all to be converted into Euros, and I have a strong feeling that 
this would trash the dollar! The trouble with such a trade is getting rid 
before the price of Euros goes crazy, leaving you with lots of dollars now 
worth even less. Best way is to trickle them out, and this is one of the 
factors leading to the slowly shrinking dollar. The Pound is only doing 
marginally better too, against the dollar it looks good, but not much else.


> Jim Hawkins
>
>
>
>
>
>
>
>

"super"  wrote in message
news:13km8eho3cio5cc@corp.supernews.com...
>
> "Jim Hawkins"  wrote in message
> news:n0D2j.309292$1l2.55712@newsfet01.ams...
>>
>> "super"  wrote in message
>> news:13kjn835ms4d413@corp.supernews.com...
>>>
>>> "Jim Hawkins"  wrote in message
>>> news:qJ_1j.273207$1l2.28616@newsfet01.ams...
>>>> How has it come about that so many of the world's major commodities
>>>> (oil,
>>>> aircraft, etc) are priced in in US dollars ?
>>>> Is it difficult to change this ?
>>>> I'm wondering why Airbus don't change to pricing their planes in euros.
>>>>
>>>
>>> I thought that strange too, maybe Boeing sell their planes in Euros!
>>>
>>> The US was once the world's largest economy, and thus perceived to have
>>> the safest currency.
>>>
>>> As the dollar's purchasing power has declined relative to other
>>> currencies, many large dollar holders are worried that there might be a
>>> better medium of exchange, and are concerned that their 'pieces of
>>> paper'
>>> won't be worth a lot. You can see the result on the price of oil. You
>>> now
>>> need more $ paper per barrel.
>>>
>>> Ultimately, all currencies based on paper become worthless, or at least
>>> as
>>> low as the value of that piece of paper. So at some point, the owners of
>>> the oil and aircraft might ask for payment in something with more worth.
>>> (Euros, Gold etc), unless they can be 'persuaded' otherwise. Persuasion
>>> might include an aircraft carrier on their doorstep, or other means to
>>> ensure that confidence is not breached, if it is not already.
>>>
>>> It's a matter of how close that dollar becomes to only being able to buy
>>> another similar sized piece of paper as to how long confidence in it
>>> will
>>> survive. The price is manipulated by the central bank increasing or
>>> decreasing liquidity and interest rates to rein in or relax the number
>>> of
>>> dollars in circulation, as well as demand for the purchases and sales of
>>> the currency. E.G. I want to build a factory in Arizona, I need to buy
>>> dollars, thus putting the dollar price up. I want to sell that factory
>>> and
>>> convert my money into Pounds/Euros etc, it has the opposite effect.
>>>
>>> If I can't get the required transport and education I need for my
>>> product
>>> and workers, then this helps to reduce demand for the dollar by making
>>> it
>>> less likely that I would build the factory and thus need dollars in the
>>> first place. So you can see at least one factor that might weigh against
>>> any currency. You can see that there is a snowball effect as the
>>> currency
>>> becomes worth less, then any foreign investment has a tendency to pull
>>> out
>>> due to lowered returns and a flight to safety, dragging the currency
>>> down
>>> and making other investers start to pull their money out. At some point,
>>> theoretically,  investment in the US/dollar will become a good idea
>>> again.
>>>
>>> Long term, the dollar may disappear and be replaced by an alternative
>>> (shared with Canada/Mexico maybe) currency, that same way that most of
>>> Europes' have.
>>>
>>>
>>>
>>
>> Thanks, 'super',  for taking the trouble to explain things to an economic
>> ignoramus.
>> What's stopping the Iranians carrying out their threat to set up a
>> Euro-traded oil bourse ?
>
> Apart from the aforementioned Aircraft Carriers, not much. But it's not
> actually in their own interest to bring the dollar down, because then so
> does their income.
> I think I'mADinnerJacket might get a bit of a short term kick out of such
> a move, but the stuff I've read says it would be bad for Iran longer term.
> And does Iran want a shed load of Euros anyway? I doubt many Iranians want
> to buy German Sausage, although they might like the cars. If most of their
> their imports are priced in Dollars, e.g. Machinery, pharmaceuticals or
> whatever, then it's all pointless. I think Russia is a big trading
> partner, and probably the Chinese. What currency do THEY want/accept for
> Iranian imports?
>
>> How was it that George Soros was able to wreak the havoc he did to the
>> pound
>> sterling ?  Simply by selling a vast amount of sterling ? Or was there
>> some
>> other mechanism ?
>
> Exact same situation as Northern Rock. Both were fundamentally overvalued.
> And thus vulnerable to short selling.
> Let's take your house as an example. You could say it was worth £Billion.
> It might well be in a number of years, so the market might go crazy and
> start speculating that the trading value of the house is worth £Billion.
> Then George Soros comes along and short-sells your house, because he looks
> at the fundamentals such as wages in your area etc. By the action of short
> selling, the rest of the market starts to look more closely at the massive
> trades against the item, and starts to re-evaluate things for themselves.
> This is what happened to NR and the Pound. George Soros realised "The
> Emporer had no clothes", in a market unprepared for the one-day 'raid'
> that Soros performed. Where he really made his money was from UK
> Government buying back the GBP to try to keep the exchange rate within the
> ERM limits. It was like a tug of war where the Gvt keep letting more and
> more rope out, and Soros keeping taking more and more saying 'That'll do
> nicely!" His anticipation of this action led to the huge profit.
>
> In a way it's taking advantage of a price disparity, only most people
> assume that it only works for rising prices. E.g. A share in a company
> that has just discovered the secret of eternal youth is likely to go UP,
> and you're the only person who knows this so you buy the shares going
> 'long', rather than the shorting that Soros did.
>
>> Could some speculator do the same to the dollar ?
>
> Warren Buffet already has a while back, but I think his timing was out.
> His was more of a long-term option than a one-day smash-and-grab, though.
>
> Others speculators are doing it constantly. Multi-$billion hedge funds
> routinely bet on small differences in value, as not all the differences or
> potential profits are on the scale that Soros saw.
>
> The big ones make it to the headlines.You've also got to realise that
> no-one is *doing* anything to the dollar, share or whatever. They're just
> taking advantage of a market anomoly, i.e Over or underpriced relative to
> a sane value. That said, since the Chinese own zillions of dollars, they
> could ask for them all to be converted into Euros, and I have a strong
> feeling that this would trash the dollar! The trouble with such a trade is
> getting rid before the price of Euros goes crazy, leaving you with lots of
> dollars now worth even less. Best way is to trickle them out, and this is
> one of the factors leading to the slowly shrinking dollar. The Pound is
> only doing marginally better too, against the dollar it looks good, but
> not much else.
>
>   super




Sorry 'super', but I don't understand the jargon:-

> Let's take your house as an example. You could say it was worth £Billion.
> It might well be in a number of years, so the market might go crazy and
> start speculating that the trading value of the house is worth £Billion.
> Then George Soros comes along and short-sells your house, because he looks
> at the fundamentals such as wages in your area etc. By the action of short
> selling, the rest of the market starts to look more closely at the massive
> trades against the item, and starts to re-evaluate things for themselves.

What is 'short selling' ?   How can someone do it to my house ?   Surely
only I can sell it.

> E.g. A share in a company that has just discovered the secret of eternal
> youth is likely to go UP, and you're the only person who knows this so you
> buy the shares going 'long', rather than the shorting that Soros did.

What is  'going long' ?   'shorting' ?

Jim Hawkins

"Jim Hawkins"  wrote in message 
news:A2H2j.258400$pd2.118015@newsfet01.ams...
>
> "super"  wrote in message
> news:13km8eho3cio5cc@corp.supernews.com...
>>
>> "Jim Hawkins"  wrote in message
>> news:n0D2j.309292$1l2.55712@newsfet01.ams...
>>>
>>> "super"  wrote in message
>>> news:13kjn835ms4d413@corp.supernews.com...
>>>>
>>>> "Jim Hawkins"  wrote in message
>>>> news:qJ_1j.273207$1l2.28616@newsfet01.ams...
>>>>> How has it come about that so many of the world's major commodities
>>>>> (oil,
>>>>> aircraft, etc) are priced in in US dollars ?
>>>>> Is it difficult to change this ?
>>>>> I'm wondering why Airbus don't change to pricing their planes in 
>>>>> euros.
>>>>>
>>>>
>>>> I thought that strange too, maybe Boeing sell their planes in Euros!
>>>>
>>>> The US was once the world's largest economy, and thus perceived to have
>>>> the safest currency.
>>>>
>>>> As the dollar's purchasing power has declined relative to other
>>>> currencies, many large dollar holders are worried that there might be a
>>>> better medium of exchange, and are concerned that their 'pieces of
>>>> paper'
>>>> won't be worth a lot. You can see the result on the price of oil. You
>>>> now
>>>> need more $ paper per barrel.
>>>>
>>>> Ultimately, all currencies based on paper become worthless, or at least
>>>> as
>>>> low as the value of that piece of paper. So at some point, the owners 
>>>> of
>>>> the oil and aircraft might ask for payment in something with more 
>>>> worth.
>>>> (Euros, Gold etc), unless they can be 'persuaded' otherwise. Persuasion
>>>> might include an aircraft carrier on their doorstep, or other means to
>>>> ensure that confidence is not breached, if it is not already.
>>>>
>>>> It's a matter of how close that dollar becomes to only being able to 
>>>> buy
>>>> another similar sized piece of paper as to how long confidence in it
>>>> will
>>>> survive. The price is manipulated by the central bank increasing or
>>>> decreasing liquidity and interest rates to rein in or relax the number
>>>> of
>>>> dollars in circulation, as well as demand for the purchases and sales 
>>>> of
>>>> the currency. E.G. I want to build a factory in Arizona, I need to buy
>>>> dollars, thus putting the dollar price up. I want to sell that factory
>>>> and
>>>> convert my money into Pounds/Euros etc, it has the opposite effect.
>>>>
>>>> If I can't get the required transport and education I need for my
>>>> product
>>>> and workers, then this helps to reduce demand for the dollar by making
>>>> it
>>>> less likely that I would build the factory and thus need dollars in the
>>>> first place. So you can see at least one factor that might weigh 
>>>> against
>>>> any currency. You can see that there is a snowball effect as the
>>>> currency
>>>> becomes worth less, then any foreign investment has a tendency to pull
>>>> out
>>>> due to lowered returns and a flight to safety, dragging the currency
>>>> down
>>>> and making other investers start to pull their money out. At some 
>>>> point,
>>>> theoretically,  investment in the US/dollar will become a good idea
>>>> again.
>>>>
>>>> Long term, the dollar may disappear and be replaced by an alternative
>>>> (shared with Canada/Mexico maybe) currency, that same way that most of
>>>> Europes' have.
>>>>
>>>>
>>>>
>>>
>>> Thanks, 'super',  for taking the trouble to explain things to an 
>>> economic
>>> ignoramus.
>>> What's stopping the Iranians carrying out their threat to set up a
>>> Euro-traded oil bourse ?
>>
>> Apart from the aforementioned Aircraft Carriers, not much. But it's not
>> actually in their own interest to bring the dollar down, because then so
>> does their income.
>> I think I'mADinnerJacket might get a bit of a short term kick out of such
>> a move, but the stuff I've read says it would be bad for Iran longer 
>> term.
>> And does Iran want a shed load of Euros anyway? I doubt many Iranians 
>> want
>> to buy German Sausage, although they might like the cars. If most of 
>> their
>> their imports are priced in Dollars, e.g. Machinery, pharmaceuticals or
>> whatever, then it's all pointless. I think Russia is a big trading
>> partner, and probably the Chinese. What currency do THEY want/accept for
>> Iranian imports?
>>
>>> How was it that George Soros was able to wreak the havoc he did to the
>>> pound
>>> sterling ?  Simply by selling a vast amount of sterling ? Or was there
>>> some
>>> other mechanism ?
>>
>> Exact same situation as Northern Rock. Both were fundamentally 
>> overvalued.
>> And thus vulnerable to short selling.
>> Let's take your house as an example. You could say it was worth £Billion.
>> It might well be in a number of years, so the market might go crazy and
>> start speculating that the trading value of the house is worth £Billion.
>> Then George Soros comes along and short-sells your house, because he 
>> looks
>> at the fundamentals such as wages in your area etc. By the action of 
>> short
>> selling, the rest of the market starts to look more closely at the 
>> massive
>> trades against the item, and starts to re-evaluate things for themselves.
>> This is what happened to NR and the Pound. George Soros realised "The
>> Emporer had no clothes", in a market unprepared for the one-day 'raid'
>> that Soros performed. Where he really made his money was from UK
>> Government buying back the GBP to try to keep the exchange rate within 
>> the
>> ERM limits. It was like a tug of war where the Gvt keep letting more and
>> more rope out, and Soros keeping taking more and more saying 'That'll do
>> nicely!" His anticipation of this action led to the huge profit.
>>
>> In a way it's taking advantage of a price disparity, only most people
>> assume that it only works for rising prices. E.g. A share in a company
>> that has just discovered the secret of eternal youth is likely to go UP,
>> and you're the only person who knows this so you buy the shares going
>> 'long', rather than the shorting that Soros did.
>>
>>> Could some speculator do the same to the dollar ?
>>
>> Warren Buffet already has a while back, but I think his timing was out.
>> His was more of a long-term option than a one-day smash-and-grab, though.
>>
>> Others speculators are doing it constantly. Multi-$billion hedge funds
>> routinely bet on small differences in value, as not all the differences 
>> or
>> potential profits are on the scale that Soros saw.
>>
>> The big ones make it to the headlines.You've also got to realise that
>> no-one is *doing* anything to the dollar, share or whatever. They're just
>> taking advantage of a market anomoly, i.e Over or underpriced relative to
>> a sane value. That said, since the Chinese own zillions of dollars, they
>> could ask for them all to be converted into Euros, and I have a strong
>> feeling that this would trash the dollar! The trouble with such a trade 
>> is
>> getting rid before the price of Euros goes crazy, leaving you with lots 
>> of
>> dollars now worth even less. Best way is to trickle them out, and this is
>> one of the factors leading to the slowly shrinking dollar. The Pound is
>> only doing marginally better too, against the dollar it looks good, but
>> not much else.
>>
>>   super
>
>
>
>
> Sorry 'super', but I don't understand the jargon:-
>
>> Let's take your house as an example. You could say it was worth £Billion.
>> It might well be in a number of years, so the market might go crazy and
>> start speculating that the trading value of the house is worth £Billion.
>> Then George Soros comes along and short-sells your house, because he 
>> looks
>> at the fundamentals such as wages in your area etc. By the action of 
>> short
>> selling, the rest of the market starts to look more closely at the 
>> massive
>> trades against the item, and starts to re-evaluate things for themselves.
>
> What is 'short selling' ?   How can someone do it to my house ?   Surely
> only I can sell it.

Going long is buying a share or good or currency or property and holding 
onto it whilst it (hopefully) increases in value, and then selling for a 
(hopefully) profit. You also get any dividend that the company pays per 
share, whilst you hold the share. I.E. A share of the profits.

Going short is borrowing the share, that you sell for it's current price and 
then buy back at a (hopefully) lower price before returning it to the 
lender. You can't really do it with houses very easily, it was just a 
hypothetical example. You would have to ask someone to move out, sell their 
house for them, and then buy it back at a cheaper price, and then move them 
back into their old house, and then split the profit you make. Anyone who 
sells at the top of a housing market and rents until prices come down is 
effectively 'going short' on the housing market.

>
>> E.g. A share in a company that has just discovered the secret of eternal
>> youth is likely to go UP, and you're the only person who knows this so 
>> you
>> buy the shares going 'long', rather than the shorting that Soros did.
>
> What is  'going long' ?   'shorting' ?
>
> Jim Hawkins
>

You can check wikipedia or the rest of the web for exact definitions.

Jim Hawkins wrote:
> "super"  wrote in message
> news:13km8eho3cio5cc@corp.supernews.com...
>> "Jim Hawkins"  wrote in message
>> news:n0D2j.309292$1l2.55712@newsfet01.ams...
>>> "super"  wrote in message
>>> news:13kjn835ms4d413@corp.supernews.com...
>>>> "Jim Hawkins"  wrote in message
>>>> news:qJ_1j.273207$1l2.28616@newsfet01.ams...
>>>>> How has it come about that so many of the world's major commodities
>>>>> (oil,
>>>>> aircraft, etc) are priced in in US dollars ?
>>>>> Is it difficult to change this ?
>>>>> I'm wondering why Airbus don't change to pricing their planes in euros.
>>>>>
>>>> I thought that strange too, maybe Boeing sell their planes in Euros!

Convenience.  Most international mega-large businesses will trade in US 
dollars and manage the foreign exchange risk themselves.  Likewise for oil.

There is no economic imperative (yet) to have a second global currency. 
  But China might change that in the longer-term.

>>> How was it that George Soros was able to wreak the havoc he did to the
>>> pound

>> This is what happened to NR and the Pound. George Soros realised "The
>> Emporer had no clothes", in a market unprepared for the one-day 'raid'
>> that Soros performed. Where he really made his money was from UK
>> Government buying back the GBP to try to keep the exchange rate within the
>> ERM limits. It was like a tug of war where the Gvt keep letting more and
>> more rope out, and Soros keeping taking more and more saying 'That'll do
>> nicely!" His anticipation of this action led to the huge profit.

I think this is a fair description of the history.

To emphasise, political stupidity is all above defying economic gravity. 
  When politicians think they are Gods, it's a one-way bet to easy 
money.  That's what Soros did.  He made millions.  Good for him: he 
saved the UK investment base by forcing the UK government to abandon its 
incompetent, stupid, small-penised attempt to nail economic jelly to the 
ceiling.


-- 

mjt

A supporter of http://www.taxpayersalliance.com/, fighting to stop the 
government ripping off the taxpayer.

Tax cuts v public services?  No!  Tax cuts *for* better public services.