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Will Euro recover in the next few months?

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Re: Will Euro recover in the next few months?

Postby Mr He » 02 Mar 2010, 11:19

headhonchoII wrote:Germany and France will bail out Greece. There will be instability in the Eurozone but it won't be abandoned, it's part of a political aswell as economic model. If countries dropped out of the eurozone they would still have to pay their debts, their new currencies would be weak as hell thereby potentially creating more problems than it solved.
The UK is not in the Eurozone and it's currency may face a run in the next year because of the relative size of it's economy compared to US/EU. So there are persuasive arguments either way.


I agree. Greece will do some, Germany and France will do the rest.

Also, it is a very very important point that the Euro is a political project, and not purely an economic one - IE as long as the opolitical will is behind it, it will survive.

Without sounding foolish, I think that the downside for the GBP is limited. A new govt and credible decifit cutting plans (something both Gordon and David are committed to) will stave off any worries about currency or economy collapse in the UK.
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Re: Will Euro recover in the next few months?

Postby sulavaca » 02 Mar 2010, 12:23

Mr He wrote:No there isn't TC.

The EUR has been depressed by the issues in Greece, however before you lose it over that, remember that Greece is a mere 2% of the Euro zone's economy. Once that resolves and the EUR bounces as a result, sell them.


That doesn't take into account the enormous amount of debt currently on the books of major E.U. banks and the tune that debt plays on the economy at large, even the Swiss Franc.
Greece is signalling the beginnings of the end for the Euro. The same piss poor situation can be seen in the U.K. and the state of the Brit pound too. In fact all major Fiat currencies in the world today are facing extremely strenuous tests right now and TC is not exaggerating in reference to the potentially dire situation the Euro Dollar is facing or by how many serious economists and banks are deeply concerned and believe the end may indeed be nigh.
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Re: Will Euro recover in the next few months?

Postby Icon » 02 Mar 2010, 13:44

And if the euro goes kaput, and the greenback is in the tank, then we are left with what? The yuan will also go puff without those big two.
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Re: Will Euro recover in the next few months?

Postby Okami » 02 Mar 2010, 13:57

Icon wrote:And if the euro goes kaput, and the greenback is in the tank, then we are left with what? The yuan will also go puff without those big two.
I disagree if the Euro tanks, the dollar goes through the roof and interest rates in the US hit real lows causing an excessive lending and borrowing binge along with rampant inflation in certain sectors. It will be interestign to see where the "drill, baby, drill" idea goes. Already the US is the number 1 producer of natural gas in the world and if they go wild, drilling for oil in all that unchartered territory. They might start eating away at their current acct deficit.

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Re: Will Euro recover in the next few months?

Postby sulavaca » 02 Mar 2010, 14:03

Icon wrote:And if the euro goes kaput, and the greenback is in the tank, then we are left with what? The yuan will also go puff without those big two.


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Re: Will Euro recover in the next few months?

Postby headhonchoII » 02 Mar 2010, 14:29

There's no appetite for abandoning the Euro in any Eurozone country. What will they go back to , the Italian lira, Greek drakma, Irish pound... me thinks not. The euro has been a real success up to this point, most smaller countries have enjoyed stable currency rates for their businesses until they binged on the cheap interest rates, but that is a matter of government policy also. For instance countries such as Spain and Ireland actively encouraged huge property speculation due to their tax credit schemes. I know the typical Irishman, Spanish, Italian or Greek wouldn't be rushing to abandon their Euro and see their income evaporate overnight and their businesses having to pay back euro denominated loans and mortgages into wildly fluctuating and devalued local currency.
Amazingly there has been hardly any unrest in Europe as of yet, mostly people are accepting that they f%^ked up through there own devices.
The GBP going down is rough one for me but it makes our sales more competitive, double edge sword. The same is true for Eurozone companies.

Anyway the good old NTD is holding steady, just keep your money in NTD or yuan.
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Re: Will Euro recover in the next few months?

Postby Taiwan Luthiers » 02 Mar 2010, 16:25

I am not really asking what's gonna happen 10 years or even 5 years from now. I have about 3000 euros in my Euro account and I just need to see if the rates will improve in the next few months, since a difference between 43 (the current rate) and 45 is about 10,000nt so it is significant! I want to wait for the rates to go up a bit before I turn it into NT because I am in no hurry to spend it right away.
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Re: Will Euro recover in the next few months?

Postby TainanCowboy » 03 Mar 2010, 09:07

An interesting proposal for the Euro - Euro 1 & Euro 2

Why the Euro might Devolve into Euro1 and Euro2
(in excerpt:)
"The euro as presently configured is doomed due to structural imbalances between mercantilist and consumer nations. A "euro1 and euro2" system would allow a face-saving demise to euroland's single currency."
---
"Since the euroland leaders have invested their prestige and credibility in the single currency euro, it's demise will likely be cloaked in some "face-saving" measure. My best guess is euro-denominated bonds, both public and private, will be offered in two flavors: "euro 1" for mercantilist Germany, France, the Netherlands, etc. and "euro 2" for the highly indebted, debt-and-asset-bubble-dependent consumer nations: Portugal, Ireland, Italy, Greece, Spain, etc.

This could be a de facto (unofficial) "solution" to repricing debt and assets in each nation, or it might even become "official policy" as the great structural divide between mercantilist and consumer nations become unbridgeable even rhetorically.

Eventually, the "euro 1" currency will be valued more highly than the "euro 2" currency--again, either de facto or de jure. If the E.U. prefers total denial as a policy, then the revaluation/devaluation will be de facto; the "street price" of euro 2s will be worth less in the real world even if the E.U. maintains the fantasy of a single currency."

I doubt if whats outlined in the article will be proposed, but it does show one approach.
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Re: Will Euro recover in the next few months?

Postby Mr He » 03 Mar 2010, 09:24

An alternative to this might be continued convergence between the economies of Ethe EU.
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Re: Will Euro recover in the next few months?

Postby sulavaca » 03 Mar 2010, 09:32

Mr He wrote:An alternative to this might be continued convergence between the economies of Ethe EU.


The Euro is failed not only because its a Fiat currency and that's what they all must do, but also because Euro land is far larger than any one country. There are differences in living standards, property prices, food prices, you name it. Yet there is one fixed rate of interest. It simply doesn't make sense. Even Euro 1 and 2 would fail in such a system.
Even the U.S. knew this which was why they insisted on only gold and silver to be used as currency according to the constitution as well as only apportioned taxation.
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