Despite the recent up move, I'm still bearish on the Euro. The long term trend is still down after it's Greece election breakdown. This up move is most probably a fakeout move, imo.
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Global Macro Trading Journal
- Thread starter Daal
- Start date
Quote from flipside21:
Despite the recent up move, I'm still bearish on the Euro. The long term trend is still down after it's Greece election breakdown. This up move is most probably a fakeout move, imo.
EUR seems like a tough call sometimes. I expect it to decline due the perception of the Greece exit, yet I'm not sure there will be an exit(Likely Germany will blink). If that is correct, in the mid-term there will be quite a rally(After Merkel agrees to kick it down the road with SYRIZA)
This makes it hard for me to have conviction to take a big short or to withstand the vol given that I believe the market is wrong
Imbalances (in productivity, wealth, GDP/capita etc.) under a common currency aren't that big a problem as long as national social, budgetary and fiscal policies are unified. That is the case across Italy and across the USA.Quote from Debaser82:
People keep talking how to fit in Greece in Germany in the same monetary union but there are huge disbalances in countries and regions themselves.
Italy has parts richer then Germany and worse of then Greece
Across Europe it is not. You have different social, pension and tax policies and in each and every country. Under the common currency system any imbalance in productivity and trade leads to the rich countries funding another countries' misaligned social/pension/tax system. What the European politicians are pushing is forcing a tax-payer in Germany to pay transfer funds to Greece so some retired unionized railroad employee can get his 3,500 EUR a month pension. It's absurd.
That's why IMO the EUR won't ever work like they thought it would unless Spain/Italy/France/Germany share the same basic tax/social/pension system. And that may be 20-50 years away -- if ever.
Quote from Butterball:
Imbalances (in productivity, wealth, GDP/capita etc.) under a common currency aren't that big a problem as long as national social, budgetary and fiscal policies are unified. That is the case across Italy and across the USA.
Across Europe it is not. You have different social, pension and tax policies and in each and every country. Under the common currency system any imbalance in productivity and trade leads to the rich countries funding another countries' misaligned social/pension/tax system. What the European politicians are pushing is forcing a tax-payer in Germany to pay transfer funds to Greece so some retired unionized railroad employee can get his 3,500 EUR a month pension. It's absurd.
That's why IMO the EUR won't ever work like they thought it would unless Spain/Italy/France/Germany share the same basic tax/social/pension system. And that may be 20-50 years away -- if ever.
Of course the irony is that 'harmonizing' the system wouldn't actually change this dynamic: German taxpayers would still be forced to pay for retired Greek civil servants just as New York and California tax-cows are forced to pay for welfare benefits in Mississippi. Mobility of workers (and also students etc) is the best way of evening things out, but that's very limited in Europe and always will be so long as major language and cultural barriers remain.
The root problem as everywhere is a monetary system which permits credit-from-thin-air to be expanded effectively without limit, and a political-economic system which demands the continuance of this expansion as an absolute priority. There will always be booms and busts, and massive exponentially-growing 'imbalances' that are eventually purged with tremendous economic pain and disruption.
Now the obvious solution was for Greece to default on its debt back in 2010. Each country could then recap its own banks, pension funds and so on as they saw fit. The Greeks are forced to undertake reforms and live within their means, but they remain in the EU and the Eurozone without having to support this crushing debt burden for the next thousand years - all positive outcomes. The economy would likely have bottomed out and recovered surprisingly rapidly. Instead they've chosen water torture...
greece could leave the euro, the choices are be a tax slave to theQuote from Specterx:
Of course the irony is that 'harmonizing' the system wouldn't actually change this dynamic: German taxpayers would still be forced to pay for retired Greek civil servants just as New York and California tax-cows are forced to pay for welfare benefits in Mississippi. Mobility of workers (and also students etc) is the best way of evening things out, but that's very limited in Europe and always will be so long as major language and cultural barriers remain.
The root problem as everywhere is a monetary system which permits credit-from-thin-air to be expanded effectively without limit, and a political-economic system which demands the continuance of this expansion as an absolute priority. There will always be booms and busts, and massive exponentially-growing 'imbalances' that are eventually purged with tremendous economic pain and disruption.
Now the obvious solution was for Greece to default on its debt back in 2010. Each country could then recap its own banks, pension funds and so on as they saw fit. The Greeks are forced to undertake reforms and live within their means, but they remain in the EU and the Eurozone without having to support this crushing debt burden for the next thousand years - all positive outcomes. The economy would likely have bottomed out and recovered surprisingly rapidly. Instead they've chosen water torture...
ecb.imf, or live like like peasant farmers,fishermen ..seems they will be forced to stay as peasants either way..if they are going to default, they better hurry,i'm surprised the imf,ecb collective members of the euro have'nt enacted a law allowing siezure of your country in loo of debt