Rising Dollar & Value of our Early P-Cars

[mfitton]

'Price' and 'value' are two different things

'Price' describes what it's gonna take to make a deal, complete an 'exchange' . . . how much stuff --- dollars, Euros, pigs + goats, 1st-born daughters, etc . . . a Seller wants to let go of what he/she 's selling. It's a number

'Value,' on the other hand --- is not readily quantifiable . . . more emotional than numerical. Kid's baby shoes, Gramma's wedding ring, all those kooky old photographs in scrapbooks, etc, etc. Ever heard the term 'priceless'? . . . then someone was probably describing something kept in a closet. Or a storage facility. Coffee can. It's not a number --- but people try




Very Short Lesson . . .

As the value of the dollar increases ---- it will take more Euros to buy stuff that's priced in dollars. That's all

Put it Another Way . . .

Currencies are commodities that are bought and sold --- just like coal or corn, shares in a company, or art . . . or cars. And --- just like any other commodity . . . their 'price' can change. Right now? --- the price of the dollar is up . . . if you're paying for it w/ Euros. That's all

I forgot to mention I did graduate the sixth grade.

[HughH]

This is an issue that we in Australia have had to grapple with for a long time with our dollar going from a bit over 50 US cents to $1.10 US to 1 A$ over the past 20 years.
I think that the early 911 market, like many other collectables (and commodities) is now a global market and effectively priced in US$. When you are outside the US it is a lot easier to see than when you are inside a USD denominated country. With the weaker USD that we saw over the past decade or so until recently that made lots of non US produced things more expensive for US$ denominated people. In the case of collectables, and commodities, there were two aspects both pushing the price up in USD terms. The first was a pure translation effect as these are now global commodities and as the USD fell against all other currencies things priced on a global market, even if priced in USD, would rise somewhat in USD terms (but not on a one for one basis) as a consequence. However a second impact is probably the more important - if something is priced in USD and other currencies (say AUD or Euro) rise against the USD it makes that commodity more affordable in those countries and increases demand. This increased demand probably more than offsets any lower demand in the US due to higher USD prices and thus adds to global demand and thus a higher price measured in USD. While this is happening (as has been noted in many of the "price" threads) other "speculators" get drawn into the equation, some of which will no doubt be using "other peoples" or borrowed money to finance the transaction and thus be more susceptible to a reversal in price trends.
with the rise in the USD the opposite happens - we can see that in Australia at present with the AUD going from about $1.10 down to just over $0.81US in the past year. instead of buying "cheap" cars out of the US there is now a view that good LHD ones should be sold back to the US. This process is likely to reduce demand at the margin on a global basis even though the USA is probably the biggest market for these cars.
However there are always a lot of other forces at play, from "easy cheap money" and good economic conditions to demographics and I suspect that these factors have had more to do with 911, and other collectable, pricing in recent years than the level of the USD - the level of the USD versus say the Euro or AUD may have had more impact in which geography prices were growing fastest though.

[Sun888]

Think Hugh got it right – we’re talking about a global market, priced in US$ and with the US having the largest supply of the commodity.

Consequently, there will be some who say that the devaluation of the Euro will have a negative effect on demand and as such put pressure on prices.

However, as much as I would love that from a personal point of view as I then might perhaps be able to afford a SWB coupe …. I don’t believe that it is going to happen. A) Unless things drastically change I don’t see the demand side decrease given how the market has developed over the past few years and with a lot of enthusiasts joining the community - of which I am one (and not only collectors). Equally important is B) that the supply is finite – they just don’t make them anymore.

That doesn’t mean that we won’t see some fluctuations on the price front with perhaps prices going down a bit if things in Europe turn seriously sour for a while. But over the long term… lower prices… don’t think so.

[LongRanger]

. . . I forgot to mention I did graduate the sixth grade . . .

Hmm

Finance, right?


K --- lemme put it Another Way . . .

A year ago . . .

. . . €.729 = $1

Today? . . . €.881



So?


Could any differences in prices from a year ago --- of anything . . . be due to a change in their value? . . .


. . . or to the value of the currency that they're purchased with?



My Take = any purchase in $s is a tough one to make if you're coming from Europe

[Frankr]

There is a legal concept of "market value". It is the price in a currency a willing selling and buyer will agree on without undue influences and equal market knowledge. And cars priced in Euros should be easier (more attractive) for $$$ owners to buy now. it's like getting a 20% discount over the old exchange rate (assuming Euro price not changed). In other words it used to take around $1.35 to buy 1 Euro. Now they cost just $1.12 or so US. Glad I cashed in my leftover euros for $s when we got back in May.

[LongRanger]

Another thread . . .
http://www.early911sregistry.org/for...ghlight=magnus