Da Swedish currency is the shit

The Swedish currency exchange rate hits new bottom records towards the euro, yesterday 1 euro would get you SEK11,40 (normal rate the last 3 years has been around 9,20-9,60). The most aknowledged explanation for the fall is that “oh we so poor swedish ppl with our tiny money supply are sure to take a hit in these volatile times” … maybe maybe it could also have something todo with the EXTREMELY AGGRESSIVE lowering of the repo rate. SEB:s ppl is forecasting the Swedish repo rate to go to zero this year and stay there during 2010 (sadly this might happen).

 

Now to the comedy; they are also forecasting consumer prices to go DOWN during 2009 and 2010. Granted the price for getting a coffĂ© or a pizza or whatever local service (labour) intensive consumer producs you might think about is sure to go down (or at least stay where they are, who lowers prices anyway?!?). But for internationally traded consumer goods (like eh, all goods in the stores) … forget it. Bytelove increased its prices with 10% a few days ago towards the Swedish market. I am also quite sure an international product manager for a retail chain will not think “hmm, sweden has a hard time right now, let’s lower our margins”, probably more like … “wow the swedish currency is really volatile right now and this price has to last for 4-6 months, let’s add another 15-20% to our margin on todays exchange rate just to be sure”.

 

Here’s my “expert prognosis” 😀

Swedish reporate will in comparison go down more than the ECB (I’m sure the state bank guys has huge loans so this is a sure one).

Salaries will stay where they are, more unemployed ppl

Consumer prices will go up, way up. Retail will take a huge hit (regardless if the actual exchange rate gets better or not).

 

People “in the system” of course profits from the above (hard to believe but I’m actually in the system sort of). People outside the system with no loans and who do not own their houses, apartments etc is the loosers … BUT THEY SHOULD BE THE WINNERS if their was any fairness in the world … but there’s not :).

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