The Coming Demise of the Euro....

Discussion in 'Economics' started by libertad, Apr 23, 2006.

  1. As I have mentioned in earlier posts...there is some question as to the strength of the Euro...

    Raucious unemployment and high production costs plague Italy...France...Germany...which are the true underpinnings of the Euro....

    Each country has its own indigenous problems that cannot be addressed without all the tools...

    For a country to be able to flex its economic capabilities....it needs its sovereign currency as well...

    http://www.khaleejtimes.com/Display.../April/theworld_April852.xml&section=theworld
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    For example....One will never group $300 month labor with $4000 month labor...Thus currency efficiency will lend itself to sophisticated cheaper labor... always...always...always....

    The writing is displayed clearly on the wall....
     
  2. Libertad, as usual, you are right, but you are wrong.

    There is no question that there are significant difficulties that Europe will face due to its unfavorable demographics. Those demographics are similar but worse to those facing the US in the future, and those which Japan has faced for the last decade. We will probably learn from the European experience what to expect in our own society. Interestingly, Euroland may benefit more from outsourcing to asia/middle east/latin america/africa than the US earlier, because those outsourced functions may be unreplaceable among their own labor pool (due to a lack of younger workers).

    However, the negative fundamentals that the US dollar is facing seem to be being weighed by the market as more concerning than those underlying fundamentals you mentioned which affect the Euro. Case in point - the recent one day spike to 1.24 when it looked like the ECB was potentially going to start raising rates - and the quick backpedaling that happened thereafter!

    There is still potential strength to the Euro - new acceptance of the European Constitution would restore strength to the currency quickly.

    Most importantly, the Euro is the only potential candidate to a reserve currency besides the dollar - until Japan either experiences some sort of sea change, or China decides to either float the renmibi or back it with something to make it less like a fiat currency.

    So, while you analysis is correct, it probably will be many years until you can use that information to trade profitably off of it. The market reflects other fundamentals at this time, and chooses to ignore or discount these for now.

    That's why I find it so hard to short the Euro.
     
  3. I find it hard to short the dollar at this levels.
     
  4. Yeah...from a trading point I agree...

    but as the article suggests a long term grind...

    LONDON - The euro zone is headed for collapse in 10 to 20 years so long as there is no European political union to underpin it, a prominent Belgian economist told Sunday?s Business newspaper.

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    Yeah...its like having to vote for two bad candidates....but one of them is going to win......and yeah the Euro vs Dollar is the choice until China matures....which will eventually have the mass...

    Currencies have to have the mass in this case....

    There are plenty of other countries which are fundamentally more sound...just do not have the mass...
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    But there is a big difference in the indigenous make ups of ...for example Venezuela vs Switzerland.....Turkey vs France...etc..

    ie...look at Italy...France where indigenous issues narrow....but political agreements are far away...

    It took a long time to create differentiated European cultures...and I do not ever see them perfectly blending...
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    Yeah ...I agree with your view...It is a good one...for the shorter term options in the near future....

    But Euro usage will even be somewhat limiting...

    Yeah..who do want to win the election...when they are both bad choices...the least worst.....
     
  5. It's only a matter of time before another Hitler or Napolean shows up in Germany or France. Their is no stucture in Europe to prevent it.

    I give Europe another generation before another war breaks out. Civil or othewise.

    Thank God for America. Can anyone imagine what planet Earth would be like without the United States? It would be a world ran by clones of, Hitler, Stalin, Mao.

    John
     
  6. Sorry, didn't you mean to say:

    "It's only a matter of time before another Hitler or Napoleon shows up in the states..."

    Thank god for America, but we have really significantly deviated from our original American experiment as decided by the founding fathers.
     
  7. If you study Hitler you would realize how silly it is to say that a Hitler could show up here. Go study him.

    France changes its government whenever the riots get big enough. They are on their 5th republic already. What will the 6th, 7th look like??

    America has a structure in place to prevent a Hitler from coming here. It's the Constitution. Europe has no committment to ideals that would prevent it from creating another tyrant.


    John
     
  8. what is "god"?

    planet earth without the us? let's see: to be fair - the us has done some good things - but not lately of course.

    on the other hand:

    dictatorship in chile and all the other things done in latin america

    supporting saddam hussein

    supporting both sides (!) in the first gulf war in the 80's

    the war in vietnam

    the war in korea

    the a-bombs on japan

    the war in iraq

    everything that has to do with oil and saudi arabia, etc. and all those oil countries in africa, etc.

    the list goes on and on.

    so - a world without the us? hardly imaginable.

    (oh - and keep an eye on china...)
     
  9. ... follow up

    i just forgot one little thing: the us representing 5% of world population but consuming 25% of oil/gas - and giving sh*t about global warming.

    oh yeah - a world without the us ...
     
  10. Cheese

    Cheese

    There is no f**king man made global warming. Cooling/warming cycles are natural over eons. You might as well say playing with your knob twice as much will cause the planet to heat up and the polar ice caps to melt.
    :)
     
    #10     Apr 24, 2006