Strong Euro - Bad Mistake?

StevieJ

Looks like that strong Euro is hammering the Strong as well as the Weak, the Euro will surely weaken in the next few months as the authorities are forced to act and they will be well behind the curve :cool:


http://www.reuters.com/article/economicNews/idUSLAG00334520090331

BERLIN, March 31 (Reuters) - The German government needs to step up its stimulus measures fast because of the severity of the downturn facing Europe's largest economy, the Organisation for Economic Co-operation and Development said on Tuesday.
Chancellor Angela Merkel has so far refused to increase the government's fiscal response to the crisis, which Berlin says is worth some 81 billion euros over two years.
Banks and think tanks have become increasingly pessimistic about the outlook for Germany in recent weeks, and the OECD forecast is by no means the bleakest.
Commerzbank said last week the German economy was likely to contract by between six and seven percent this year.

Really2

The euro is like a see-saw with spikes on the floor.
The ones geting hurt are the ones at the top and the bottom.

One size does not fit all, sorry eurozone.

vivatifosi

Really2 wrote: »

The euro is like a see-saw with spikes on the floor.
The ones geting hurt are the ones at the top and the bottom.

That's one of the best analogies I've read here. Thanks Really2

Rochdale_Pioneers

Interesting about the German economy. Merkel is saying a strong no to more cash (on top of the 4% of GDP already spent) with an eye on their election this September. Looks like their crashing economy will force their hand - if not hers then perhaps the opposition.

What makes me laugh is that this is yet more evidence backing up the "it will cost more to do nothing" argument made by Brown and Obama. Whats the betting that the Tories once again try and hijack it as proof to back up their "spend nothing now" approach supported so far by noone? Even the countries they claim support them - Germany being the key one - have spend a fortune on measures which they oppose.

MrFonzerelli

Really2 wrote: »

The euro is like a see-saw with spikes on the floor.
The ones geting hurt are the ones at the top and the bottom.

One size does not fit all, sorry eurozone.

I would argue that it's the recession that's the problem, not the euro.

Monetary union worked for the US, eventually. I aknowledge that the US and the Eurozone are very different.

Generali

Everybody's pushing down the value of their currency. Not everyone can reduce their exchange rate by definition.

lostinrates

MrFonzerelli wrote: »

I would argue that it's the recession that's the problem, not the euro.

Monetary union worked for the US, eventually. I aknowledge that the US and the Eurozone are very different.

as a matter of interest, wht came first in america, monetary union or a consitutution? Not an attempt at a pointed question, a genuine question (and one I should know the answer too ).

lostinrates

It would seem from google, with a link I can't paste for some reason, that 1935 is a date before which US monetary union can not be considered complete.

It seems in EU cart was in advance of horse, then, if the comparison is drawn.

Really2

vivatifosi wrote: »

That's one of the best analogies I've read here. Thanks Really2

I have to cover my lack of knowladge some how.:D

itsnever2lateisit?

Rochdale_Pioneers wrote: »

Interesting about the German economy. Merkel is saying a strong no to more cash (on top of the 4% of GDP already spent) with an eye on their election this September. Looks like their crashing economy will force their hand - if not hers then perhaps the opposition.

What makes me laugh is that this is yet more evidence backing up the "it will cost more to do nothing" argument made by Brown and Obama. Whats the betting that the Tories once again try and hijack it as proof to back up their "spend nothing now" approach supported so far by noone? Even the countries they claim support them - Germany being the key one - have spend a fortune on measures which they oppose.

Problem is it's the wrong countries spending the money, just as in the 1930's. Then the surplus countries refused to spend (USA and France) just as now (Germany and China)

Germany seems to think that if the Govt's of its export markets spend that will help reflate their economy (and they're right) given that they are the worlds biggest exporter by value.

It should not be left for deficit countries to spend money they don't have, but thats protectionism german style for you

purch

wht came first in america, monetary union or a consitutution? Not an attempt at a pointed question, a genuine question

When the Federal Reserve Bank system was originated in 1913, each of the 12 Reserve Banks set their own Monetary policy within their region of operation, and each set their own Discount Rate (they still do today, but it is now the same as the NY rate).

The system evolved over time into the way it operates today, but back then it was envisaged to be a system with far more flexibility than exists today, and far more than exists in the European Monetary sytem.