The Demise of the Euro

I have also been expecting a Euro implosion once things get bad in some countries but not others. Giving up control of interest rate policy is a big leap of faith.

Instead, what I see is Europe moving towards one big quasi nation state. I don't see how it can work, but it appears to be happening. Although I prefer the supremacy of the dollar, a unified Europe all the way to the Russian border is a good thing I believe. I am rooting for them to succeed in this, and maybe pick up the bill for their own defense!
 
Good thread, guys.
As an Italian, I can tell you that here the ppl is still pissed about the euro, simply because the price of everything pretty much doubled overnight. Salaries got raised too, but in less measure. And of course, exports are plunging. Now that the psycho-dwarf got re-elected again, all bets are off. We'll see.
 
This article really surprised me, it has a sense of desperation about it. Its sole purpose would appear to be to scare traders into selling the euro - is the USD really in this much trouble that they feel the need to resort to "scare-tactics"?

It's true that inflation has always been the 'prime mover' here but this stuff about Spain withdrawing from the euro and their housing market being in deep trouble is frankly nonsense. Yes, theirs, and most other countries' building industries are currently experiencing a contraction, but not only is this normal, it's healthy. Compared to the U.S housing crisis, (aptly named) europe is in a positive boom!
 
Heh...psycho dwarf.

Again, this thread isn't about the demise of the dollar. It's a discussion related to the Euro. Some good points as to why it would and would not collapse. I'm near the fence, but on the side of the collapse being a possibility. Again, this doesn't have anything to do with me being an American. Actually, if you've read my threads you know I've been planning a move to Switzerland for a while now.

There was a paper on the possibility of the breakup - let me see if I cannot find it on the net.
 
Quote from omelette:

This article really surprised me, it has a sense of desperation about it. Its sole purpose would appear to be to scare traders into selling the euro - is the USD really in this much trouble that they feel the need to resort to "scare-tactics"?

It's true that inflation has always been the 'prime mover' here but this stuff about Spain withdrawing from the euro and their housing market being in deep trouble is frankly nonsense. Yes, theirs, and most other countries' building industries are currently experiencing a contraction, but not only is this normal, it's healthy. Compared to the U.S housing crisis, (aptly named) europe is in a positive boom!
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Of course it's nature was not to scare people into selling the Euro. This has been a discussion going on for a long time. Google "Eurozone Break Up" and there are dozens of articles - both pro and against - to be found. This is just the latest one, and it comes through louder than the others because of the level of the Euro.
 
Interesting article with some valid points.. BUT..

The Commies who run the EU will never let that happen, their sole fanatical mission is to create a socialist United States of Europe.

If anything I predict more European countries will join the Euro.
 
Quote from lachie74:

Interesting article with some valid points.. BUT..

The Commies who run the EU will never let that happen, their sole fanatical mission is to create a socialist United States of Europe.

If anything I predict more European countries will join the Euro.
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I dunno about the commies (having seen real commies in my life time I can say europe doesn't have real ones) but the EZ will definitely get more members before this becomes a real risk.

And the more members, the harder it will be to maintain cohesion.
 
Quote from lachie74:

Interesting article with some valid points.. BUT..

The Commies who run the EU will never let that happen, their sole fanatical mission is to create a socialist United States of Europe.

If anything I predict more European countries will join the Euro.
More...


Agreed, the commission will do ANYTHING to keep the € alive
 
Quote from Ivanovich:

Despite core inflation in the euro zone of only 2.4% and a slowing global economy, the Germans insist that the European Central Bank maintain a tight monetary policy.
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"core" inflation ?
The consumers pays full inflation, that's at 3.6% in march.
http://www.bloomberg.com/apps/news?pid=20601068&sid=al2dVk3G451w
and M3, that's the only data we should look at, grows at 12%.

That article isn't worth a lot, too shallow, too many points and problems brought up, part of that can be true, but without mention of the possible solutions. The only solution it envisions, is the end of the world.


Quote from Ivanovich:

Italy and Spain prefer to devalue their currencies to protect export power.
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That was 20 years ago...
Actually, Italian export in 2008 is good and growing, despite a supposedly strong euro.
(in italian)
http://www.istat.it/salastampa/comu...mestue/20080416_00/testointegrale20080416.pdf
(brief, in english)
http://www.istat.it/salastampa/comu...mestue/20080416_00/foreign_trade_UEeMONDO.pdf

Trade with EU countries (with Euro currency, except UK) that accounts for 60% of the total, has grown 6.4% Y/Y in february 2008.
Total foreign trade has grown even more, a nice 10,9%.
That's mainly because of the big jump of Russia (22,5% in volume in January 2008) and China (18,3%).
Export to USA increased only a tiny 1%, that's obviously because of the devaluation of your currency.

I said "a supposedly strong euro" because it should be obvious that it's not the euro that's high, but it's the dollar that's low against all currencies. I suppose that a growth of M3 at 20%, thanks to the FED, has something to do with it.


PS: Saluti a 9999, il mondo è piccolo
 
Silvio Berlusconi and his French buddy Nicolas can actually push for a change of the ECB's mandate so Trichet and co would have the obligation to take care of the EU's growth too.
 
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