You are not! Ex-post, of course some predictions turn out to have been accurate. This should only be impressive if a predictive model can be accurate again and again (or at least more than 50% of the time). The “world’s most accurate currency forecaster in 2014” might have just been the luckiest forecaster in 2014 (and there’s one every year).
And if there was such a model, it’s reasonable to think that enough market participants would use it that any change in the model’s prediction would quickly be reflected in the current exchange rate, so there would be no large predictable changes.
This, 200%. Then cellar them here, and come over to drink them when you get old! The title of the thread really needs to be “U.S. retail”, as the impact is immediate if I shop for the best price here and then pay with Euros taken from an ATM drawing on my U.S. dollar account. The better banks and investment banks take virtually no vig on the exchange rate and do not tack on BS 1-3% fees…
I suppose you could write dissertations on that. I have no idea. I was just responding to Nick’s point about prices in the UK. I was saying that the pound and euro have not moved in sync against the dollar, so you’ve got several variables at work when you talk about the effective price in dollars of French wines sourced out of the UK.
Absolutely not, but personally, I would rather believe in Euro-dollar parity forcasts than Santa Claus or the Easter bunny. (In the now-immortal words of Peter Pan and Tug McGraw, “You gotta believe!”) I had the good fortune to buy and expand a house with 85-cent Euros. I am still nostalgic for 85-cent Euros, even though I will probably never see their like again…
I’m no economist, but something about the very high Euro-dollar exchange rates never felt right as a real indicator of economic strength. It seemed artificial when you consider the entire Eurozone. Parity makes much more sense, from a total armchair/don’t really know what I’m talking about perspective.
Statistical studies have shown that in matters of interest rate, currency exchange, stock indices, and other semi-chaotic systems, a consensus forecast over time beats any individual forecaster. Not to say the consensus is right every time. I’d love to see parity between the dollar and euro, so I’m going with that one.
It’s an interesting analysis. I think the decline in oil prices is strongly influnced by the US desire to beat Russia for its recent aggression, and add pressure to Iran, all without requiring force. Until that changes, I’m not sure I buy the argument, but time will tell.
Bill,
I know nothing about how to “cellar them here” but would love to know how/where/how much. I have some feet on the ground in Tuscany, and I am over there enough that I could stock something and drink it sometimes.
All-
Multiple ways to play the currency market; one of the easiest is to use a mainline US brokerage account, and just buy EUR, you can get the account to hold the currency (unlevered) without even buying the EUR denominated stocks. This for now has been my preference, but I am inclined to make a real estate bet if we do get near parity. I have been trying to get all the ducks in a row for this eventuality for several years.
Alex, I live here and have a cantina in my home, rather than needing to keep wine in off-site storage here. I doubt that wine storage rental is a growth industry in Italy, since most houses have a cantina, root cellar or suitable cool passive storage area, and even high-end rental apartments and newly-built condominium projects often include cantinas. That said, I suspect that some retailers may have capacity to store wine for customers, and I am sure other arrangements could be made. Self-storage units can be rented here, but I have never been inside one to know if there are refrigerated rooms with wine units. Trust and security would come into play with third-party storage, but my U.S.-issue wine insurance covers my wine here, and that I left behind in a rental storage unit in the U.S.
This article strikes me a lot as “I have been wrong for the last six years about the impact of Fed policy asserting that lower interest rates will result in inflation and a weak dollar. Why not try for seven?”
Look, I am not stupid enough to assert I have any idea where the dollar is heading, but neither does this guy - there is no rationale in this article.
Bill,
Thanks for your thoughts. My father has an apartment on the Tuscan/Umbrian border, but unfortunately it does not have a cantina. I also I am not sure that the reliable choice would be storing wine where he could get to it… I could probably figure out something, but I think I just read too much of a solution in your “cellar them here” comment; even if there was a commercial facility, it would probably be in Milano, and what’s the point of that, really. I’ve enjoyed reading your commentary on wine and the human condition. I also think Barolo is wonderful, but it’s a tricky proposition. You need to be young and have money, or be older and have a lot of money, to make a good cellar out of it…
