Thread: News Stories
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Old 2011-12-22, 20:28   Link #18619
Shadow of Effilisi
Join Date: Oct 2011
Originally Posted by sneaker View Post
So, going back to your original statement: why should Germany care about Spain or Greece leaving the Euro? Why is the Euro better than the DM for Germany? And if it is, how much money is it worth to keep the neighbors alive?
Eurozone members cannot devalue their currency to make their products more competitive, and the more competitive German exporters reap the most benefits. And there are other benefits for having a common currency with trading partners.

I'd also like to point out that all the handwringing and ohmygawding, the Euro stays still stable up 30% compared to the US dollar since its inception, and with an inflation rate of below 3%. At the peak of the terrible terrible crisis. And that all his earlier yelling and screaming notwithstanding, George Soros has recently invested 2 billion in Euro bonds (below market price due to the Corzine bankruptcy).
Euro has not devalued much against USD because USD has also devalued in the same time period. Inflation is below 3% because Europe is in a recession and Euro has not devalued too much. They are not signs of healthy economy in any way. But feel free to ignore the structural problems in certain European countries, the risk of insolvency and bank failures, unaffordable sovereign bond rates, and the likely long term stagnation in part of Europe.

Yes, and it would have immediately deflated ANY efforts by Club Med to get their budgets in order. Screw "the market", getting the numbers back where they belong is much more important. Because once this happens, "the market" will eventually follow suit anyway. But pleasing "the market" isn't going to make structural deficits go away. Look at America as an example.
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