Quote from Brandonf:
Look at all of the entitlements that the Europeans have to pay for. They have a shrinking population, and the only new people/labor pool they are bringing in are Arabs who turn into nut jobs and try to blow them up. No one will work more than 30 hours a week over there (ok I know some do, but basically every job there, it seems to be, is for life and like having a Union job in the US) The only thing I could see that could prevent a very weak Euro with in the next few years is if Russia and then a few other key players in the petro market decided to stop pricing their Oil in dollars and instead went to Euro's. This would likely cause WWW3 though, because we might like a weak dollar, but we certainly would not enjoy a worthless one.
Mind if I plagiarise this for my Oxford PHD?
shrinking population? only new labour pool is Arabs?
I haven't seen an Arab in ages, but a quarter of a million Eastern Europeans have moved to Ireland in the last 3 years, massively expanding the workforce.
Ireland is a small country, lets look at elsewhere:
Over 1 million poles have immigrated to both the UK and Germany (1m each) in the last 5 years. (obviously UK isn't eurozone but provides a general backdrop to the migration picture)
The eurozone ie westernised economies using the euro has been flooded with millions of (cheap and highly educated) eastern european workers, helping to hold down wages and bolster productivity.
The only country which caps your working hours is France, which caps to around 48 hours a week, not 30.
I don't know why everyone discusses the pros and cons of the euro every time it spikes against the dollar though...every time eur/usd makes a new high it normally coincides with similar highs made by gbp, aud, cad, nzd, try, etc. I think it is less a question of the euro being particularly strong than the dollar being worryingly weak and we should be discussing dollar fundamentals (and there are many strengths) rather than running down the euro. If I were to go long eur/usd, I do not see myself going long the euro, but rather short the dollar, which seems to be the preoccupation of the market with the dollar making new lows against almost every other currency every few months these days.
