ira

The only thing that creates value is that someone is willing to pay something for an item. Whether it is foreign currency, stocks, diamonds, houses, or oil.

There are always experts who appraise the value of things. As we all know value is a moving target.

Often things are either over valued or under valued. It has been said that two things move markets, fear and greed.

Most things value are based on last sales. If the price is moving up often it is the greed factor that keeps people in the market and demand high. When prices fall, the fear of loss sets in and prices fall.

There are all sorts of economic laws like supply and demand to explain value but in the end their are often speculators who try to move markets in the direction they want it to go.

When we look at foreign currency markets it is much harder for one person or a small group to move the market for any length of time and a balance is often found. Obviously there are benefits to different groups on which direction the value of the dollar is moving.

That still leaves the question which way is the value of the Shekel moving?

ira

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Bank of Israel to retain representative rate
The central bank will continue to set representative exchange rates daily.
Zeev Klein 30 Jul 07 14:24
The Bank of Israel will not abolish representative exchanges rate, which will continue to be set daily. The Bank of Israel held from the start that the issue of abolishing representative rates was blown out of all proportion, and that its deliberations on the matter needless raised expectations.
The Bank of Israel concluded that representative exchange rates are important because they provides an indication about changes in exchange rates and the nature and direction of Israel’s foreign currency market.


Representative exchange rates function similarly to the Consumer Price Index (CPI), which gives direction to consumers, who cannot go to stores to sees prices for themselves. In addition, most countries give representative exchange rates for their currencies.

Bank of Israel sources said that the majority of replies from market entities favored retaining representative exchange rates.

Published

Livni

Bank of Israel published that the GDP has this year climbed up to 27,688$, placing us between New Zealand and Italy, at 21 of the 30 OECD countries.

According to IMF stats, it will climb more and they forecast at the end of 2007 that it will reach 31,676, which will put Israel between france and germany, 18th of 30 OECD countries. The OECD current average GDP is 30.872$ and Israel is expected to reach it for the first time this year.

The jump is attributed to the 6.6% growth of the market, 1.1% higher than the Bank of Israel predicted for 2007. Private spending increased 7.5% and industrial output by 8%. This follows an 8% growth in Q4 of 2006.
Private consumption of goods - cars, appliances and home spending rose 34.6% in the first half of 2007.

ira

Israels economy is really much larger. These statistics only represent the legal economy. Israel has a large black economy as well. There is a lot of money laundering flowing through from Russia as well as in the diamond trade.

Many Israelis get financial help from families overseas to supplement their standard of living. Just look at all the small shops most of them are not reporting fully their earnings.

One thing that always amazed me on my trips to Israel is how full the malls are all the time. In the U.S. most of the business is done on the weekends during the week people are working and don't have time to shop.

Silently Loud

woow amazing news!

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