A word on the Euro

//A word on the Euro

A word on the Euro

There seems to have been little else in the news of late – but it seems the world’s finance ‘experts’ (the ones who failed to predict any of the last three market crashes) – have been spending a lot of their time dissing the Euro. Predicting the end of the monetary union and financial melt-down across Europe.

The British press and Eurosceptic politicians have been gobbling up this BS as if to say ‘see – we told you so!’ while handily avoiding a few facts:

  1. while the Euro might be worth less to the dollar now than it did a couple of years ago, the same could be said of the pound to the Euro
  2. when the Euro was first launched, it was worth less than a dollar, dropping to around 85 cents at one point, now however it currently trades at around 1 dollar 20 cents
  3. since the crisis the pound as strengthened against the Euro by an unimpressive 2 cents! Still miles away from it’s pre-VAT cut levels.
  4. Greece might be a basket case – but then so is California (the eight largest economy in the world)
  5. 300 million people use the Euro in cash form across Europe, and there is some 790€ billion in circulation – so even the likes of George Soros aren’t going to make the slightest impact on it’s long term value, even if they dump their entire fortunes on the market

Calm down dear – it’s only the largest currency in the world.

By | 2010-05-28T08:50:08+00:00 May 28th, 2010|Life in France|2 Comments

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2 Comments

  1. Jean-Marc Fandimpro May 29, 2010 at 5:09 pm - Reply

    Exactly !Plus, I still can't figure out why a lower Euro would equate with the end of the monetary union.Another point to consider:Dividing the value of the Euro by about 4 (0.3 dollars?) would probably be the first step for my professional activity to be competitive with regard to Indian people. Nowadays Indian employees of computing companies work for 4-6 times less than we do while still having a better standard of living than we do. Just due to the exchange rate.A lot of people prefer to be able to find a new job easily, rather than enjoying cheap faraway vacations.A very high Euro does not help people who need to earn Euros, it only helps people who already have a lot of Euros. Like bankers.So the Euro fell back to it's value of 4 years ago. That's really nothing. Did we feel poorer 4 years ago ? Not that I recall.On the plus side, all this uninformed dissing is exactly what helps getting the Euro down to sustainable levels 🙂

  2. Englishman July 29, 2010 at 12:51 pm - Reply

    I have an opportunity to say that “I told you so” as a report on the BBC http://www.bbc.co.uk/news/business-10802119 reveals that California is looking at a deficit of around $19bn – which at a rough estimate is equivalent to about 20%.

    The size of the Greek deficit that’s causing this supposed Euro melt-down? ~ 13.5% And California is responsible for 8% of GDP for the USA, whereas Greece accounts for 2.5% of the Eurozone. Still convinced the Euro is a dead currency?

    If there were any justice in the world this news should mean that financial commentators will immediately start to question the long-term economic viability of the dollar, and insist that California dropping out of the US could be a real possibility.

    The more I read or listen to financial commentators, bankers, investment analysts and the like – the more I’m convinced they don’t know what on earth they’re talking about. And in my view George Osbourne is no exception, if not a case in point.

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