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You thought we were bad, Spain has 19% officially reported unemployment Looks pretty bad for the bunch of them (Portugal, Ireland/Italy, Greece and Spain)
The Eurozone was a bad experiment that should come to an end.
"Spain is the real test case for the euro," says Desmond Lachman of the American Enterprise Institute in Washington. "If Spain is in deep trouble, it will be difficult to hold the euro together...and my own view is that Spain is in deep trouble."
I wouldn't take a US think-tank or some British newspaper too seriously, I would look for cues from eurozone insiders.
The euro is likely to survive because the alternatives are worse, and European, US and British policymakers all know it.
There's a lot of speculative steam being blown around right now: among other things, like competition to fund sovereign debt, traders need something to do.
Another slight possibility is that the peripheral eurozone countries are booted out, leaving "core", mostly northern Europe with the euro.
That would present a good opportunity to buy a Mediterranean vacation home (Italy or Greece my preferences) at a discounted price after devaluations of the revived escudo, peseta, lira, drachma. Some people thrive on risk and relative chaos, or at least know how to manage through it.
I really doubt it, though. Most likely the Europeans will adopt a common currency-creating mechanism: among other things, many Germans, risk-averse, buy vacation and retirement homes in Greece, and they like the security of the EU/eurozone too.
Yes Spain is in trouble. The country for years has relied on EU handouts and eventually all that was going to go bust.
In addition a lot of the wealth was based on Britons and others buying holiday or retirement homes. The problem with all that was that they overbuilt for the actual demand and in addition many of those northern retirees overestimated their financial ability to be able to live a life of peaches and rainbows in retirement.
You thought we were bad, Spain has 19% officially reported unemployment Looks pretty bad for the bunch of them (Portugal, Ireland/Italy, Greece and Spain)
The Eurozone was a bad experiment that should come to an end.
"Spain is the real test case for the euro," says Desmond Lachman of the American Enterprise Institute in Washington. "If Spain is in deep trouble, it will be difficult to hold the euro together...and my own view is that Spain is in deep trouble."
19% unemployment is not completely that unusual in Spain. The article even mentioned this and said that even during the best of times their unemployment got down to 8%.
Spain's government also has a lower debt burden than a lot of countries, so I think they are still better off than a lot of countries. But they still have the problem of future Social Security payouts, which is a big problem because of their low birth rates.
Let's see. You have a common currency for individual country sovereign debt of the countries that use it without any common political power to control how those countries run up sovereign debt. Did they think this would actually work in the long run? The strength of the Euro is basically what used to be the German Mark and now those people are being asked to cover endless bad decisions by other countries. It won't last. One of them is going to run up debt to the moon, then pull out of the Eurozone and issue their own currency. As long as that currency is convertable to the dollar it won't matter to them. It's like having a credit card where someone else pays the bill.
It's going to be interesting to see how the Euro holds it's value compared to the US dollar. I remember when it was 90 US cents for a euro.
I remember when people were big on the euro in 07 and 08 and I've always believed it was a house of cards that was going to collapse someday. People told me I was bonkers at the time, but I think the euro will be shedding value sooner than later.
It's going to be interesting to see how the Euro holds it's value compared to the US dollar. I remember when it was 90 US cents for a euro.
I remember when people were big on the euro in 07 and 08 and I've always believed it was a house of cards that was going to collapse someday. People told me I was bonkers at the time, but I think the euro will be shedding value sooner than later.
The U.S. dollar will probably hold up pretty well against the Euro, but I think the really interesting (and important) trend to watch will be how both currencies fare against Asian and commodity currencies. My suspicion is that both will suffer.
The U.S. dollar will probably hold up pretty well against the Euro, but I think the really interesting (and important) trend to watch will be how both currencies fare against Asian and commodity currencies. My suspicion is that both will suffer.
Have to agree here: the US, EU, and even Japan, the countries of early industrialization, are pretty much in the same boat vis-a-vis the emerging countries.
Though I have a natural interest in the EUR/USD exchange rate, the more important measure is the rate of return on investment in a developing country vs rate of return on investment in the old fart countries, the US or EU, it doesn't matter.
It is not the first time unemployment has been that high. It has nothing to do with the Euro. It is the economy just like in the US.
Yes, but being part of the EU limits a country's options in responding to its own needs. They are at the mercy of the other EU members as far as controlling the currency.
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Looks pretty bad for the bunch of them (Portugal, Ireland/Italy, Greece and Spain)
