Job Discussion Forums

[crewmeal]

Over the past couple of weeks I've seen my salary rise by around 30% because the pound is in free fall against other world currencies. Great if you want to convert your salary to pounds but bad if your friends and family want to visit you!!

Anyone else with similar experiences?

[basiltherat]

Where salaries in particular currencies are concerned, I've always focused on the fact that as long as one is getting paid in the currency in which one is going to spend the money, then currency values are of little consequence.

If you're earning dollars, for example, and converting into and spending in pounds (which you imply in your post), then, yes, fortune is on your side (alto who knows for how long; might be better to be paid in Yen !). Congrats !

I'm actually curious to know how many of us need to go through this conversion lark before they can actually get round to spending their dosh.

I'm earning in pounds and spending in pounds so I'm not really affected (i'm more concerned about the rising expense of living in UK !) but there must be a few others who are either celebrating or drowning their misery in numerous bottles of flatcap.

Mind you, its all swings and roundabouts b/c ,since I've been on this planet, the $ / sterling rate has fluctuated between 2.40 and virtually par !

Long Live Sterling !
Best
Basil

[keepwalking]

I earn in dollars but spend in soles (Peru). I've been here 3 years now and the exchange rate hovered around S/3 to the $ and then reached a high of 3.25. In a 3 month period at the start of this year it plummeted to 2.7, a sizeable drop in salary when at the same time basic food prices rose by 50%.

Things are now a little more stable but it something to bear in mind when negotiating contracts. If you get paid in dollars/pounds and will have to convert, what will happen if the exchange rate suddenly drops? Many of us here were literally in the situation of not being able to pay the rent or utilities bills because we were faced with an exchange rate drop and a price rise at the same time.

I am totally confused as to why the dollar is now stronger against the sol when Wall Street is going through such a rough time. How is this 'economic crisis' affecting other people around the world?

[basiltherat]

[spiral78]

I disagree. Am happy to be paid in Euro, and to have our savings in it. Far more stable for the future, I'm sure.

[Stephen Jones]

Basil's partially correct. The dollar is stronger because investors are cashing in their investments in other currencies in order to meet their debts.

This is hardly likely to be a permanent situation though.

[hollysuel]

[Guy Courchesne]

[basiltherat]

[asian sensation]

Oil price per barrel goes down, the American dollar goes up. It's not set in stone but when oil was at its highest the dollar was at its weakest with most of the traded currencies.

[stillnosheep]

Basil: There is no proof that either Middle eastern or Russian investors are current net sellers of US stocks. Therefore your post does not make sense. Rather than things calming down in a week things could become much more volatile. The unwinding of the derivatives trades hasn't even started yet and its effects will almost certainly be far more serious than those of the sub-prime defaults and the current credit crunch. Prepare for a long, hard recession.

Asian sensation: Nice idea and a grain of truth. Oil futures are mirror-linked to economic outlook: If the outlook is good economic activity is expected to increase, people will bet on more oil being needed and so oil futures, and current oil prices, rise. If the outlook is bad the reverse happens.

In times of crisis people get scared and would rather hold something big and (they hope) relatively stable in value, like $US, than a more risky, but potentially more profitable investment (Icelandic Kroner or Icelandic bank shares a while back). So in times of prosperity oil prices rise and the safe haven effect on $US values is not so pronounced whereas when the shit hits the fan oil prices fall and people try to hedge their bets by holding dollars.

However.

This relationship only holds true as long as confidence that the $US will be a relatively stable currency is maintained. If that confidence gets damaged, for example by a big shock to the price of $US, the value of the dollar, which is vastly overvalued when measured by the health of the underlying US economy. plummets. Which is why the US should be praying that China, which holds trillions of $US in currency and US stock, is going to play nicey nicey.

Basically the US is about to be in the same position as a (very) major bank. As long as all (or nearly all) its creditors believe that it will not (cannot) go belly up then all is sweetness and light, and everybody's credit is safe. But if enough people have second thoughts, or simply need their money for other purposes, and try to withdraw their cash then it creates a run on the bank and the bank cannot pay back all of its savers, or in the case of the US, the value of the dollar plummets and everybody gets just a few cents on the dollar.

Of course the US govt can always pay its debts by simply printing a few billion more dollars. This is exactly what the government of Zimbabwe is doing as we post.

[arioch36]

guy

[stillnosheep]

[Marcoregano]

Indeed, with trillions of US dollars stashed under the bed China has huge political/economic leverage over the US. Let's hope they don't use it as an opportunity to pull a fast one on Taiwan while the US has its hands tied. A scary thought.