Because of these problems, I was expecting that the Euro would slide considerably against the dollar but it's still at 1,43. Just wondering
Why is the Euro not completely tanking against the dollar because of the PIGS?
- Thread starter freegeeks
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- Oct 30, 2000
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Maybe the value that it is perceived that they bring to the table.
Also, Greece is getting serious about their problems.
Also, Greece is getting serious about their problems.
guyver01
Lifer
- Sep 25, 2000
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Deleveraging events like pigs default will cause currencies to strengthen because credit is pulled in. So the euro could strengthen. Qe2 in America is ending.
The Lehman collapse here was similar. Deleveraging caused the dollar to strengthen and we had $2 gas. The euro can weaken if they print to bailout Greece maybe. But the eurozone seems less into printing than we have been
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The Lehman collapse here was similar. Deleveraging caused the dollar to strengthen and we had $2 gas. The euro can weaken if they print to bailout Greece maybe. But the eurozone seems less into printing than we have been
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I checked the top currencies, more or less the same like the euro/dollar, Euro has been going up the last 7 months or so
Euro has been going up against the dollar since January when it was at a low of 1,29
I was convinced that the Euro would absolutely tank against the dollar because of all the EMU problems that have been going on now for more then a year
Trying to understand why
yeah, talks are about a "soft" default or a new bailout but there is still no political consensus among European countries / politicians. You would think that this kind of uncertainty would drag the Euro down
I understand what you're asking but I don't really understand that sentence. I just think it would be interesting to know how other major currencies are doing against the Euro on the one hand and the dollar on the other hand to get a larger picture. Are you saying the Euro has been going up in the last 7 months against everyone?
is it feasible for greece to leave the single currency and go back to their own?
at least at that point, they'd once again be a cheap vacation spot for brits etc (i assume their own currency would have a poor exchange rate) and would probably get a big increase in tourism/money bought into the country.
at least at that point, they'd once again be a cheap vacation spot for brits etc (i assume their own currency would have a poor exchange rate) and would probably get a big increase in tourism/money bought into the country.
Euro has generally been going up against other major currencies
Dollar has generally been going down against other world currencies.
That scenario is not on the table for the moment, at least not officially
The most likely scenario is some kind of "soft" default. Greece will pay back its bonds over a longer period together with a new giant loan from the EU and IMF. The problem with this is the fear that the European banks holding billions of Greece bonds will also get in trouble again requiring again state intervention, etc...
http://online.wsj.com/article/SB10001424052702304453304576392171770552648.html?mod=googlenews_wsj
According to the article, it seems like people are still diversifying away from the dollar and also that people overestimated the US recovery and European crisis.
It's funny because the Chinese want more of their money in western markets which then raise those currencies making exports less likely and slowly destroying those economies through competition with their cheap labor. In the end it seems like the Chinese destroy their own investments.
The Euro remains robust because the fundamentals of their economy are sound- the balance of payments is neutral to positive, year after year. Debt is internal, so inflationary pressure doesn't affect Euro valuation. And of course dollar holders are attempting to balance their holdings with other currencies, because the dollar is still over valued. The only reason it is is because too many nations hold dollars as reserve. If they can achieve better balance, then dollar devaluation won't hurt at all, because their other holdings will go up proportionately. If the dollar drops 50% against the Euro, and you hold equal value of both in the beginning, you won't lose a thing. If You're the average American Joe, you get screwed hard, because the price of imported goods shoots through the roof... you didn't have any Euros, Yuan, Yen or Swiss Francs before the roof fell in, did you? And you just get paid in yankee dollars, right? Too bad, so sad. Don't worry, though, the American financial elite is now diversified worldwide, so they'll be just fine... maybe even better than ever if they get the timing right of selling the rest of us down the river...
The Greeks are pretty much in a position where they must default or where the other member nations are willing to forgive much of their debt in return for better future behavior. Otherwise, they'll withdraw from the EU, tell German bankers to piss up a rope, issue new drachma, go from there. The situation for the rest of the European debtor nations is less clear.
The Greeks are pretty much in a position where they must default or where the other member nations are willing to forgive much of their debt in return for better future behavior. Otherwise, they'll withdraw from the EU, tell German bankers to piss up a rope, issue new drachma, go from there. The situation for the rest of the European debtor nations is less clear.
if they just default and tell their debtors to go f' themselves, wouldn't that put them on a black list for credit - from anyone?
haven't wars been started over stuff like this as well - debtors coming to claim what's theirs?
haven't wars been started over stuff like this as well - debtors coming to claim what's theirs?
Doppel
Lifer
- Feb 5, 2011
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Yeah their credit would be shot--already is. Their bond yields are insane, were 30% for two years last week.
Greece will default almost certainly. They've gotten themselves too deep in a hole. The only way around it is constant assistance from the EU and that cannot go on forever. They need another $12B today or else they default in July. It's constant, and the populous of this new welfare state to a great extent seem to think this isn't real, so they strike, but they're merely striking against what they voted into place in the past.
I can't see how an EU holding nation defaulting will strengthen the Euro, per argument above, especially since there are other nations that are going down the same path. Greece may divest from the Euro, a very real possibility.
http://www.telegraph.co.uk/comment/...-Greeks-might-be-to-let-them-go-it-alone.html
They are in a debt spiral. Without help they'd already be sunk, now they are just pulling others down with them.
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Well yeah real reason is that while Euro isn't in the best shape, Dollar is looking even worse with the deficits, talk of rating downgrades. But don't blame the Chinese, it's the American and their elected officials who decide to spend 1+ trillions of dollar they don't have every single year.
The greek government should have taken the first bailout and started a massive bitcoin mining operation.
It's not really a moral blaming of the Chinese (well except for their IP infringement, corporate espionage, and unfair trade practices) but regardless of the US debt (which is within normal percentage of gdp) US labor can't compete with the super-low Chinese wages. That leads to less consumption which leads to even less jobs in the US and even less consumption. So in that sense what is going on with the US and European (and Japanese) economies is related to China.
can't western government impose import tariffs on imported goods so the pay difference is less desirable?
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