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Can the Euro survive?

  • #81
  • May 29, 2014 2:09pm May 29, 2014 2:09pm
There's a lot of debate here and elsewhere on the EU and the economics, and in fact world economics and what should and shouldn't be done, Keynes v Hayek and so on.

Read an article recently that may be of interest to some as it makes the point that all of these things are missing the big problem which nobody is trying to deal with or even solve. And that is our world economic system relies on growth, compounded growth, not just earnings or money supply, but also use of resources and population. And that it's this % growth that we seek that ensures that we are destined to fail as it's logically not sustainable. The EU's survival is not going to matter in comparison.

In case anyone is interested:
http://www.theguardian.com/commentis...r-number-is-up
  • #82
  • May 31, 2014 9:34am May 31, 2014 9:34am
Quoting jmn5611
{quote} As long as we have the petrodollar, which is backed by the full faith and credit of the US military, we have no real issues. At least not yet. If we do, you can rest assured that we will be spreading democracy to wherever the problem lies. And the UK will help us too. As far as EU goes, I find it ironic that after two world wars, Germany got what it always wanted anyways.....control of Europe. I was wondering if people that live on the continent are okay with this.
As long as you have oil producing nations recycle their petrodollars into U.S. assets (mainly govt and SOE debt) your dollar will continue to be the world trade currency of choice. As long as. Over recent years the oil and gas produced by fracking has increased the domestic supply of liquid fuels in the US which has led to a big decrease in the amount of imported oil. Of course this also has the effect of decreasing the speed at which oil producing nations accumulate dollar reserves thereby reducing the need for dollar assets on the international scene. You can add to that the very fast development of all sorts of alternative means of producing electricity (in some US states the price for PV solar electricity matches or is cheaper than power from the grid, and that is before taking into account all the subsidies, which by the way have been cut aggressively over the past years). Electric cars (especially in cities) coupled with locally produced renewable energy could put an even bigger dent in oil demand. I don't want to make exact predictions about the date at the US won't been imported oil (or very little of it), but that day is probably coming and with that the US dollar will suffer quite a bit as a reserve currency. It's not something that is mentioned in CNN, Newsweek or your evening news broadcast but definitely something to think about. The dollar is not going to fall out of use overnight or even over ten years but it's role will definitely change.

BTW. Europe has large gas shale reserves as well (I know England, Poland and Ukraine have a lot of it, but wikipedia can probably provide you with more insight), but the their development has been very slow. The technology used to dislodge the pockets of gas beneath the rocks is environmentally questionable so Europe has been more cautious than the US in developing these fields. However, the technology has improved significantly and I don't see a reason why we shouldn't develop these fields. Recent developments in Ukraine and Russia's history of political manipulation using gas (cutting off the gas supply) is something that will give politicians pause when weighing potential environmental harm (that can be mitigated) versus energy independence and insulation from blackmail.

Sorry if I drifted off the main topic.
If you don't risk, you don't ever have to lose.
  • #83
  • May 31, 2014 9:39am May 31, 2014 9:39am
Quoting jmn5611
I have noticed that a very large number of posters here come out of the EU. I am from Texas. I would like to know your opinions of the long term viability of the Euro and of the EU in general. Right now, I don't see how it can survive. Will smaller countries in the EU accept German economic control? From here in the US it looks like Germany runs things for you guys. But I am starting this thread because I want to know the truth from people on the ground there. Can the Euro survive? I am net long the dollar right now.
I make it my business to stay ignorant to the current situation in the EURO but in my view the trend goes like this;

If something is bigger than the rules
When it breaks, the rules are simply changed to accomadate
The survival of that which is more important
Than the "rules".

So yes the EURO can survive if it really needs to. Some may not want tit to, some may.. Who will win?
like totally failure brah
  • #84
  • May 31, 2014 9:57am May 31, 2014 9:57am
What a lot of people don't realize is that the euro is not a temporary project born on a whim. It is first and foremost a political project which means economics is secondary. So it is no surprise that some countries were allowed to join the eurozone without being ready for it (Greece, Italy). European countries had a lot of trouble with competitive devaluations of their national currencies. These wild fluctuations made cross-border trade quite expensive and hampered the development of the single market (Americans are used to the fact that once a company grows big enough, it will have storefronts in every state, with a number of different languages, currencies and sets of laws, things were a bit slower to develop here). Europe is not one country, it is a selection of countries with different (but shared to an extent) histories, traditions, languages and laws. Anything that can bring European countries together and increase trade, employment and investment opportunities is welcome. There were many attempts at pegging Europe's national currencies to a set target with an allowance for small deviations from the mean, but these projects failed. Barry Eichengreen had a good chapter on the development of the single currency in his book Exorbintant Privilege (the book is actually about the dollar's history; it's a very good read indeed). Dismantling the euro would do no good - we'd end up having the exact same issues as we have before the euro. Also, a collapse of the eurozone would come at a great cost. So in the end it is a choice between dealing with problems brought on by the use of the single currency or reverting back to a time of national currencies and dealing with problems arising from having 17 different currencies (and trying to hold together a single, open market at the same time).
If you don't risk, you don't ever have to lose.
  • #85
  • May 31, 2014 10:19am May 31, 2014 10:19am
I would compare immigrants to technological improvements. Any improvement of an existing technology or a completely new innovation (think horse-drawn carriages vs cars, personal secretaries vs MS Office etc) has the effect of displacing old technology and with it make a lot of workers redundant. Aside from a few Luddites you don't see a lot of people protesting the use of computers, better cars, smartphones or even light bulbs (as opposed to candles). It is very much the same effect with immigrant workers - they do the same job at a lower cost per unit of work. The state has the money and the power to direct funds into retraining the workforce and that is what they should focus on instead of trying to stop the tide. Fighting immigration in say, Britain, will only have the effect of keeping labor costs higher while other countries benefit from an improvement in competitiveness due to lower labor costs. Of course there is some limit as to the reasonable amount of immigrants a country can take in during any time period (population size and retraining opportunities for existing, local workers being the main concerns). But the current rhetoric in Britain has much more to do with stealing votes from the increasingly popular right wing extremists who call themselves UKIP. Politicians have used scapegoats for all eternity and it is for the people and the media to expose them and focus on real concerns (the UK has plenty big budget items that deserve more attention than immigrants' benefits). It is sad to see people jumping on the 'immigration is evil' bandwagon when there are solutions out there. But that is all I have time for now.
If you don't risk, you don't ever have to lose.
  • #86
  • May 31, 2014 10:24am May 31, 2014 10:24am
Quoting bug
What a lot of people don't realize is that the euro is not a temporary project born on a whim. It is first and foremost a political project which means economics is secondary. So it is no surprise that some countries were allowed to join the eurozone without being ready for it (Greece, Italy). European countries had a lot of trouble with competitive devaluations of their national currencies. These wild fluctuations made cross-border trade quite expensive and hampered the development of the single market (Americans are used to the fact that once...
If you truly understood the problem in the Euro zone then you should be able to sum it up for me in a sentence or two.

It's a challenge sir
like totally failure brah
  • #87
  • May 31, 2014 10:29am May 31, 2014 10:29am
Quoting simonb
{quote} If you truly understood the problem in the Euro zone then you should be able to sum it up for me in a sentence or two. It's a challenge sir
Sorry to disappoint you but real problems are more complicated than CNBC would lead you to believe. Summing up multifaceted problems is something that politicians do when they need to gather votes while appealing to the lowest common denominator.
If you don't risk, you don't ever have to lose.
  • #88
  • May 31, 2014 10:34am May 31, 2014 10:34am
Quoting bug
{quote} Sorry to disappoint you but real problems are more complicated than CNBC would lead you to believe. Summing up multifaceted problems is something that politicians do when they need to gather votes while appealing to the lowest common denominator.
That's what I thought
like totally failure brah
  • #89
  • Edited 11:38am Jul 2, 2014 11:27am | Edited 11:38am
Quoting jmn5611
I have noticed that a very large number of posters here come out of the EU. I am from Texas. I would like to know your opinions of the long term viability of the Euro and of the EU in general. Right now, I don't see how it can survive. Will smaller countries in the EU accept German economic control? From here in the US it looks like Germany runs things for you guys. But I am starting this thread because I want to know the truth from people on the ground there. Can the Euro survive? I am net long the dollar right now.
My country will join the EU zone in 2019 so does other non EU zone countries which are already members.As soon as the EUR supply is growing, and it is, and member states dont do stupid things like Greece did, i dont think the EUR will fail any time soon.Yes Germany has a huge economic biceps in Europe but it is also beneficial to the member states to have a unified currency, since the import/export would be much easier, i dont see any negativity in the EU zone, i think its logical that Europe to have a unified currency and it will benefit all EU zone countries.

So does the US dollar, the US debt may be huge and scary but if the debt/gdp ratio is small then it's nothing to worry about, and since the enlargement of the EU zone will increase the EU gdp by enormous amounts if the import/exports could get easier, there is no problem there + Low EU interest rates =Guaranteed economic growth (but maybe depreciacion vs the USD)

Also it can be seen that there is a downtrend forming in the EUR/USD monthly chart, since economic growth is in most cases inversely proportional to currency strength, there you go some fundamental hints

Also i wonder if Turkey and Ukraine will join the EU , if they do then it will be a very nice monetary union.
"There's a sucker born every minute" - P.T. Barnum
  • #90
  • Jul 2, 2014 11:45am Jul 2, 2014 11:45am
how can you USA guys talk like this?
for example take all your well developed categories like (it, aerospace, etc). Make count off your American Born people , and take count all other nation people (From your language "people from developing country") you will notice that no single category will have American Born people higher. Yes, Off course you are right you are the super power, you Guys having those petro dollars to Buy the Brilliant minds to work as your slaves.and simply regaining the spot "Super Power". there is an excellent example for this,"In a press meet when the IT crisis were high in your country, journalist asked question to words richest man "If USA restricts all Indians from working here and send them back, What will you do?". The man simply answered "I WILL CLOSE MY COMPANY HERE AND OPEN MY COMPANY IN INDIA".there is nothing to blame you guys in this matter, we must blame those who were working and are ready to work for your dollars, forgetting that he got the knowledge from one place and he works at other place, and making their mother country to step down in front of all your well developed super powers.really the heading of this thread should be"WILL US DOLLAR WILL BECOME AS OFFICIAL NATIONAL CURRENCY OF ALL DEVELOPING COUNTRIES IN 50 NOT 25 YEARS"
really it hurts,you guys first try to bring all by yourself and then tell you are super power, this is strong statement"WITHOUT PEOPLE LIKE US, YOU ARE WORTH FOR NOTHING".
  • #91
  • Jul 2, 2014 8:34pm Jul 2, 2014 8:34pm
Quoting SupraSense
I'm inside the M25, so I don't use it It has changed here too of course, but in days gone by there was still plenty of immigration. Perhaps it was mainly Irish, Australian, West Indian and Indian then. Plenty of people would moan about some from those nationalities coming over and stealing their jobs, working for cheaper (sound familiar?) and that goes back several decades. But really the root cause of the moaning was just either racism, fear (through lack of education or integration) or bitterness about their own life.
Stop playing the race card every time someone says they don't like immigration into their lands. It's natural to like your own kind just as it is natural to protect your family, who are more your own kind, above all others. The race card doesn't have the clout it once did ever since people have seen their countries wrecked by immigration and I do mean wrecked. Who does immigration benefit? The top 0.1% of company owners and that's about it.

Here's an article to make you think about what you're saying.

How immigrants 'have cost Britain £140bn since 1995': Study contradicts claims immigration helps to cut taxes
http://www.dailymail.co.uk/news/arti...cut-taxes.html
Immigrants come and work in the UK on low wages which subsequently need to be topped up with income support from the govt. Without them having previously paid into the UK system how on earth can they claim to be financial benefit to the UK.
  • #92
  • Jul 2, 2014 11:52pm Jul 2, 2014 11:52pm
Quoting Macdon
{quote} Stop playing the race card every time someone says they don't like immigration into their lands. It's natural to like your own kind just as it is natural to protect your family, who are more your own kind, above all others. The race card doesn't have the clout it once did ever since people have seen their countries wrecked by immigration and I do mean wrecked. Who does immigration benefit? The top 0.1% of company owners and that's about it. Here's an article to make you think about what you're saying. How immigrants 'have cost Britain £140bn...
Immigration/Emigration and infact Globalization is the product of advanced technology and life quality.Whether you like it or not it will eventually happen as low quality/paid jobs will be obsolete in a few years so its logical that in advanced economies no enteprenour would open lets say a shoe factory and hire their own citizens.

Instead either they outsource their companies into developing countries or only hire immigrants who will work for low wages since the average citizen wont work for that.Instead this shifting in work force will eventually force all citizens of that developed country to have university educations so that all of them could be atleast middle class or higher, office workers at an insurance company, bankers, forex traders etc...

There will be no more lower class for those citizens, since the new lower class will be the immigrants who will have low salaries.

How this affects the unemployment rate: simple, the new workforce will fill all vacum in the low quality job demands, and the other citizens will have high qualitity jobs.

But in my view its very useful, since the imigrant will anyway be paid more than in its native country, and the average citizen can get more access to high paid jobs.

So every one benefits, as for income subsidies and stuff, that is a stupid socialist bullsh*t probably ought to be reconsidered.Laissez faire is the only reasonable way

But in the overall view i think this grows any advanced country's economy and so does help immigrants to live a better quality life.

Then after all is considered only the cultural problems are left, but with that people just have to deal themselves
"There's a sucker born every minute" - P.T. Barnum
  • #93
  • Jul 3, 2014 2:19am Jul 3, 2014 2:19am
Quoting Macdon
{quote} How immigrants 'have cost Britain £140bn since 1995': Study contradicts claims immigration helps to cut taxes http://www.dailymail.co.uk/news/arti...cut-taxes.html Immigrants come and work in the UK on low wages which subsequently need to be topped up with income support from the govt. Without them having previously paid into the UK system how on earth can they claim to be financial benefit to the UK.
I saw that article. Spot on. That's exactly what I've been trying to say.
  • #94
  • Jul 3, 2014 3:01am Jul 3, 2014 3:01am
Quoting jen101
{quote} I saw that article. Spot on. That's exactly what I've been trying to say.


I believe the general public has finally realised this,and the powers that be shudder in there wake.ukip has got that msg home.its interesting because the vote when analysed breaks down to lower middle class and below to upper middle class and above,those in the money don't want ukip,those without do.dosnt take rocket science to figure out.

were 20 years behind with investment in key areas as schooling hospitals and housing.the invasion from eastern Europe has increased that to 40 years
  • #95
  • Jul 3, 2014 7:39am Jul 3, 2014 7:39am
There are many things that the EU is good for, but as far as the UK is concerned, Freedom of Movement is a big mistake. The EU would be better off ensuring a parity of standards across member states. I can cite many examples where I wish the EU would interfere. Food is one such big issue.

We get rather a raw deal here where food is concerned. Take my word for it, being both a Francophile and a foodie. Take meat - we pump shed loads of water into it. If you were to fry some bacon, after a few seconds, it would shrink to half the original size and be swimming around and that's not just the cheap stuff. Wouldn't you love to be able to sell water at £10 a kilo if you could get away with it?! That's what the EU should sort out. Take eggs. We size them up by medium, large, extra large. How quantifiable is that? What's wrong with buying eggs by weight like we do everything else? I can go on and on. The quality of produce across the Channel is far superior and cheaper than what we get here. It could also be because French farmers are heavily subsidised by the EU, so really we are paying for the French to have great food and wine. You could also say that the British aren't interested in good produce... sadly you are probably right.
  • #96
  • Jul 4, 2014 12:12pm Jul 4, 2014 12:12pm
Is the EU Germany's plan to take over Europe, economically now rather than militarily as that failed, twice? I'm sure the liberal lefties would completely dismiss it, but the question hasn't gone away.... http://www.dailymail.co.uk/news/arti...ght-along.html
  • #97
  • Edited 2:16pm Jul 4, 2014 1:14pm | Edited 2:16pm
has n't Germany already taken over Europe?
they're the most powerful and make all the decisions, so they lost the war, but won the battle, through the back door

no politician is brave enough to say it (or not in public)
if they did maybe enough countries might start to stand upto the German's and their Bureaucrats

the Euro project was dreamt up by the Rothschilds, who are descendants of German jews (how ironic)
and he or she who controls the money supply controls the world, so the Euro will survive
(at least until the next war in Europe)
  • #98
  • Oct 25, 2014 6:00am Oct 25, 2014 6:00am
Well? What a joke.
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  • #99
  • Oct 26, 2014 6:26am Oct 26, 2014 6:26am
Quoting jen101
Well? What a joke. {image}
It is, isn't it? But the saddest part is that Britain didn't seem ta care as long as the cash kept flowing to their coffers. Granted, the previous recalculations had a markedly smaller impact on public finances. But the whole notion of having to pay more to 'make up' for changes in GDP from years past is ridiculous. Imagine having to pay more for your car years later only because some statistician decided that the original calculations didn't factor in rust resistance. What a mess.
If you don't risk, you don't ever have to lose.
  • #100
  • Last Post: Nov 6, 2017 11:16pm Nov 6, 2017 11:16pm
Well Germany and France are very solid players in the EU, yes. In any case, in case you're in the UK, you're to a great extent out of their control. I figure a few nations should leave the EU, yet it will get by in some shape for quite a while. So the currency will make due for quite a while. I figure individuals in the US ought to be more stressed over their own particular circumstance, which from where I sit (UK), appears to be more regrettable. Japan likewise appears to have a few issues with obligation.
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