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The news we get about Europe from US papers is often printed with a US bias.
It is interesting to read about the European debt crisis from the source.
If the article is accurate, then Europe is facing a much more dire situation than the news coverage here in the US admits.
This is a UK propaganda piece in favour of the current government, not exactly a European source, certainly not a eurozone one.
The structural problems of the eurozone countries were well known before the currency zone was set up. European policymakers decided they could paper over those problems provided that economic growth held up: remember, the final stages of the set-up were during the "new economy" buzz.
The main purpose of the by now two-year long speculative attack against the eurozone is to force its policymakers to defecate or get off the pot: in other words, form a real fiscal and monetary union capable of easily printing money just like the Bank of Japan, US Federal Reserve and UK's Bank of England, or break up and revert back to the several completely sovereign nations.
In the end, it will be a question of political will.
To be sure, neither US nor European policymakers are squarely and transparently addressing the structural problems facing their pampered, but by now expensive-nuisance, populations amidst the globalisation of industrialisation; they are devaluing their populations by more deceptive means such money illusion, a trick time-tested over centuries, whether in gold-based or fiat currency systems, it doesn't matter.
Yet, at least measured by exchange rates since around 2001 and especially since 2004, for what they are worth, market participants have viewed the US's problems as worse than the eurozone's.
The real question is, whether the populations of countries of early industrialisation are simply going through the pains of a relative deterioration in the standard of living or are they on the brink of economic collapse.
If the latter, how do you define economic collapse precisely in terms of the real economy?
To me it means failure to deliver the basics - water, food, shelter, electricity, personal safety - to the bulk of the population.
This is a UK propaganda piece in favour of the current government, not exactly a European source, certainly not a eurozone one.
The structural problems of the eurozone countries were well known before the currency zone was set up. European policymakers decided they could paper over those problems provided that economic growth held up: remember, the final stages of the set-up were during the "new economy" buzz.
The main purpose of the by now two-year long speculative attack against the eurozone is to force its policymakers to defecate or get off the pot: in other words, form a real fiscal and monetary union capable of easily printing money just like the Bank of Japan, US Federal Reserve and UK's Bank of England, or break up and revert back to the several completely sovereign nations.
In the end, it will be a question of political will.
To be sure, neither US nor European policymakers are squarely and transparently addressing the structural problems facing their pampered, but by now expensive-nuisance, populations amidst the globalisation of industrialisation; they are devaluing their populations by more deceptive means such money illusion, a trick time-tested over centuries, whether in gold-based or fiat currency systems, it doesn't matter.
Yet, at least measured by exchange rates since around 2001 and especially since 2004, for what they are worth, market participants have viewed the US's problems as worse than the eurozone's.
The real question is, whether the populations of countries of early industrialisation are simply going through the pains of a relative deterioration in the standard of living or are they on the brink of economic collapse.
If the latter, how do you define economic collapse precisely in terms of the real economy?
To me it means failure to deliver the basics - water, food, shelter, electricity, personal safety - to the bulk of the population.
Do you feel the problems in the Eurozone are severe enough for the Euro to achive parity with the dollar?
Do you feel the problems in the Eurozone are severe enough for the Euro to achieve parity with the dollar?
Thank you for asking.
The euro was at USD 0.80 in the first two years of its formation, the markets having full knowledge of the eurozone's fiscal problems.
Then by around 2000, the US's fiscal problems increasingly came into focus. Of course US government spending stimulated by 9/11 multiplied, perhaps exponentialised, those problems. By 2004, EUR/USD peaked at 1.36, it has hovered around there ever since, in the 1.18-1.60 range, and it is currently around 1.42.
So despite, Greece, Ireland, Portugal, now potentially Italy and Spain, and eurozone politicians wavering on political will, EUR/USD has traded in the 1.19-1.45 range, still a far cry from parity, though of course more a reflection of US problems than euro strength.
Okay, I cannot know the future, but I would bet, not with all my chips, maybe one-third, that the Europeans will bring to force the political will to not only preserve the eurozone, but tighten their fiscal and monetary policy union, simply because the alternatives in a globalised industrial economy are worse.
What we are witnessing now is political wrangling, even brinkmanship, to determine the shape of such a tighter union, while at the same time fending off speculative attacks from without.
Of course that bet could be wrong, and the eurozone could break up into regions or entirely fragment as before. In such case the fate of the euro, if it survives, would depend on which countries inherit it and what happens to other currently euro-denominated securities such as government bonds.
But, again, I would bet that they eke out the necessary political will, but over the period of another couple or several years. The other side of that bet is whether US politicians will come up with credible economic policy.
So far, US leadership has proven to be more incompentent, certainly more reckless, than relatively staid and stagnant European leadership.
So expect more spouts of volatility in the coming months and years, but a less than 50% chance that the euro would sink back to parity against the USD.
Overall, as I have been saying for about two years now, I still expect the countries of early industrialised to be stuck in a W economic pattern for at least 5-10 years, maybe more, i.e. periods of modest economic growth slapped back down near zero due to fiscal and energy constraints, the result of which will be an at least relative decline in the standard of living of the average worker in those countries, with some relatively small probability, ten percent or less, that the situation could slip out of the grasp of control, resulting in collapse as defined above.
I am not sure what you are trying to say... Can you please elaborate. Thank you.
europe depends on our foreign bases for their military security. as a result, their military spending can be very low while their social spending can be high. we pull our bases and force them to spend on military, they will collapse (or a war will follow that will destroy them). we could probably benefit by the savings on reducing our military and revenue by selling weapons to the various warring factions.
interesting to see europe actually acting. they will feel pain now and have lots of idiots riot, but if they stick to their guns they may actually survive and we are the ones to watch for.
News from The Associated Press (http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&T EMPLATE=DEFAULT&CTIME=2011-08-09-14-18-33 - broken link)
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