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Once again the Dollar has hit a new low

and as it looks, this is not the end - what can we do

     
6:24 pm on Sep 12, 2007 (gmt 0)

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Its incredible how a country can let there currency fall so mutch, almost 40% in 5 years, soon i can buy Microsoft.

Now the problem, we who are dependent on advertisers from USA are in deep pain, 40% down in earnings just be cause of the currency and still no real alternative in Europe, also the companies like casale valueclick... must expect some publishers to run away, but then again where? there is no alternative in europe, with a strong currency.

Its realy a blow to the income, this dollar issue.

6:37 pm on Sept 12, 2007 (gmt 0)

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It's a plot to take over the world. As more and more economies come to rely indirectly on revenue from AdSense, the more unstable those economies become, until they eventually collapse. With all the other currencies collapsed, the dollar once again goes through the roof. With an even comparatively larger capitalization (because of the stronger dollar), Google can swoop in and buy up all those countries.

Bruhahahaha!

6:43 pm on Sept 12, 2007 (gmt 0)

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Its realy a blow to the income, this dollar issue

LOL - Try owning a house in the US.

7:07 pm on Sept 12, 2007 (gmt 0)

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Google=World Domination! In Google We Trust, all others must pay cash, devalued
of course!...KF
7:32 pm on Sept 12, 2007 (gmt 0)

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well I dont mean google in special, i just mean many suffer from this low dollar and there are no alternative.
9:21 pm on Sept 12, 2007 (gmt 0)

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In Google We Trust

"Venimus, Vidimus, Googlus"- "We came, we saw, we Googled" :)
9:42 pm on Sept 12, 2007 (gmt 0)

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Too bad Google AdSense doesn't pay in gold, then we wouldn't have to worry about currency shifts in value.
10:44 pm on Sept 12, 2007 (gmt 0)

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many suffer from this low dollar and there are no alternative.

If you do enough business, (to justify the purchase of at least a single contract) you might consider hedging with dollar/euro futures contracts or options. Although used by some for speculation, your situation is exactly what these were primarily designed for.

Farmers use futures contracts and options to protect themselves against fluctuations in crop prices. Companies like BMW use them to avoid having to raise their prices drastically when currency markets fluctuate.

Well, you are a web farmer, and the prices you have to worry about are ad prices, which are primarily priced in dollars.

Options in particular might be suitable. You choose the direction, buying a "put" or "call", and pay a premium, which you can consider "insurance". The maximum you are out is the premium. (Note that futures contracts are a different animal, and have no limit on potential loss!)

With an appropriate strategy, if the dollar improves, you would be out the premium, but your profits would be up due to the improved dollar. If the dollar goes down further, you would reap profit from the options contract to compensate you for lower ad revenue.

You will need to do some research into what contracts are available to you in your country, and how to purchase or sell them, as well as learn some of the basics of future and options trading and strategies.

In the U.S., these types of contracts have traditionally been sold to the public by specialty commodities brokers. There has been a trend, though, for some stock brokers now to offer innovative accounts that let you trade either (using computerized "fund sweeps", which actually maintain separate accounts and slosh money back and forth), and at much lower cost than the commodities brokers have charged in the past.

Too bad Google AdSense doesn't pay in gold, then we wouldn't have to worry about currency shifts in value

See above.

1:51 am on Sept 13, 2007 (gmt 0)

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Around my garden I've planted a hedge. I recommend it to everyone.

Even if you want to keep things simple, ensure you source whatever you can from the US; for example - purchase domain names, servers, VOIP credits, etc. etc. in US$. If your overheads are 25% of your income and you can get them in US$ you will cut your loss in the event of a reduction in US$ value by 25%.

It's often said that gold is one of the best assets to buy to offest the value of the US$. It generally moves in the opposite direction. Of course, if you fail to save any assets then that won't help!

If you outsource, even from your own country, do so through the US$ denominated freelancing boards. Establish your contracts in US$ through that method and keep them in US$.

4:41 am on Sept 13, 2007 (gmt 0)

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Even if you want to keep things simple, ensure you source whatever you can from the US

And this is EXACTLY why the U.S. is "letting the dollar drop so far". (As if they have any control! :) )

The drop in the dollar is primarily due to the lopsided balance of payments. As the dollar drops, more non-U.S. companies will outsource to the U.S. A good example of this are the assembly plants that have been built in recent years in the U.S. by non-U.S. automakers.

This acts at least in part to correct the balance of payments, or at least to help prevent it from getting even more lopsided.

1:44 pm on Sept 13, 2007 (gmt 0)

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If you do enough business, (to justify the purchase of at least a single contract) you might consider hedging with dollar/euro futures contracts or options. Although used by some for speculation, your situation is exactly what these were primarily designed for.

I wasn't expecting to see anything constructive in this thread (of course web developers can't control exchange rates); you surprised me.

I wonder how big a business has to get before this becomes worthwhile.

2:32 pm on Sept 13, 2007 (gmt 0)

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a low dollar could also be bad for USA, like in the 80s where japan companies bought a lot in the US, be cause of the difference in dollar yen
7:33 pm on Sept 13, 2007 (gmt 0)

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I wonder how big a business has to get before this becomes worthwhile.

Dunno about futures sold in Europe, but the EUR futures contracts sold in the U.S. on CME (Chicago Mercantile Exchange) are for $125,000 worth of Euros.

Options would be options on those same contracts, so would cover the same value.

Actual Forex (bank to bank) trading I believe is in units of $1,000,000, though there are many firms now that make a retail market in smaller increments. A caution - these firms cater primarily to small get-rich-quick speculators, and are probably not the best place to go for your purpose.

At least one U.S. stock broker allows you to buy or sell a number of currencies at very low cost, which are carried in your account denominated in the foreign currency. They did this primarily because they sell stocks on a number of world exchanges to U.S. residents - a fairly rare thing in the U.S. - and they needed a mechanism for payment in native currencies. But this is one more way to hedge.

Again, I am not familiar with what products are available in other countries. I believe the broker I am thinking of also trades in a number of other countries besides the U.S.

10:12 pm on Sept 18, 2007 (gmt 0)

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GREAt a hal point rate cut, Now dollar has hit a new low, jesus why dont the EU react to this.
11:46 am on Sept 19, 2007 (gmt 0)

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I have been cancelling our UK and EU supplier contracts, where possible. Shifting to either US based or at least dollar contracts.

I expect the dollar will drop a good deal more before end of the year.

Also trying to boost my revenue, tricky though as our Uk traffic is not that high.

Vibrant Media has been keeping us in the red as the dollar has fallen, since they pay in .

Frustrating thought to grow revenue and see value drop, sort of running to keep still.

7:11 pm on Sept 21, 2007 (gmt 0)

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You can't do anything, really. It's just economics, and it fluctuates based on the decisions made by the people and business and government in the country. The U.S created the crisis, and as far as I have been able to dig up - it also knew the consequences which might happen when they made some very hard economic decisions some years ago, knowing that it might create a bubble in the market.

There's alot of paper millionaires, if those papers are suddenly next to worthless, they'll be very unhappy.

Now, the U.S has to deal with it. You can just hope and pray that it doesn't go like back in the 1920's when the market collapsed. That's also why most of the economic market is trying to make people calm and relax about their investments and not withdraw all their funds and such, because that would make the snowball begin to roll... which would make the situation worse, which then would lead to more people beginning to secure their assets and then.. bye bye...

[edited by: RandomDot at 7:14 pm (utc) on Sep. 21, 2007]

12:10 pm on Sept 25, 2007 (gmt 0)

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Do you guys think a currency like the Amero could do any better? And what are all these speculations about this Amero currency? I think that this won't happen in the the next 50 yrs or so.
4:23 pm on Nov 8, 2007 (gmt 0)

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Its incredible how the USA let the dollar fall, now some here in the news say, with a smile, its the new third country, the infrastructure looks like it did in Europe 15 years ago, bla bla..

I was also contacted by some I do business with, they say they go to Euro now to price there stuff, also some I know sells there stocks in the US, be cause of the dollar. The stock goes up, but the dollar down, so what do I get nothing, thats what they say.

11:16 pm on Nov 13, 2007 (gmt 0)

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thats what they say.

Who is "they"? Is there an official department of "they"? My point is that whatever "they" say I can find a bunch of other "they people" with different opinions, who is right?

12:23 am on Nov 14, 2007 (gmt 0)

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Fortune Hunter - they is scadinavia, Germany, swiss, it has been some speculations and some jokes in the news, its the same when I visits US, its as if you go 10 years back in time, but this nothing against USA, I love the people, cars a lot of stuff what is not in Europe, bt hey we are talking dollar here.
8:30 am on Nov 14, 2007 (gmt 0)

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Yeah it's a huge blow but i'm rejoicing here in my country. I'm going to US for a much needed vacation and I can buy as much dollars as I want