syruppy

Friday Outlook: Commodities, Emerging Markets

When trying to determine the optimum value of the dollar on the world stage, the following is what all Americans should know about Europe. They do not believe in lowering the price of a good, and profit by selling more at a lower margin (the Euro mindset is related to the sort of zero-sum thinking that pervades anti-capitalists thought here). Euro-thinking leads them to try to get utmost profit from every single unit they sell, as there are only so many units that they intend to sell, that can be sold. The idea of increasing the popularity of an item by lowering the price—thereby increasing its value—is anathema: that would only mean hiring and training more employees and accepting some business risk. In other words, Euro-thinking is much like that among the members of the oil cartel, except that Europeans, if at all possible, do not want to buy anything from you, and do not ever want a bill from you for everything you do that benefits them around the world. These simple facts of life are why dollar-Euro exchange rates are meaningless.