Question Will the Euro collapse?

rynnor

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George Soros and a cabal of hedgefunds are all betting heavily that the Euro will sink to parity with the dollar.

Thoughts?
 

Bugz

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Fuck the euro - I'm waiting patiently for the growth reports for start of 2010!1
 

Nate

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This will make it even more like monopoly money :D I say yes!
 

cHodAX

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If it means I can afford to go on holiday again then lets hope it collapses. :p ;) :D
 

DaGaffer

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If it means I can afford to go on holiday again then lets hope it collapses. :p ;) :D

What makes you think it will collapse against Sterling? If the euro goes down the toilet Sterling will probably go with it.
 

Raven

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No, it won't. If sterling collapses then the Euro will do the same. The other way around I am not so sure.
 

rynnor

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I dont think we will strengthen as much as the dollar if the euro collapses but we would gain some ground against it - a kind of middle way between the two.
 

Bugz

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No-one can accurately predict how exchange rates move with certain predictability IMO.

Too much speculation, rational expectations etc. going on.
 

Ctuchik

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No, it won't. If sterling collapses then the Euro will do the same. The other way around I am not so sure.

sterling probably wont collapse but it will most likely take a big hit as theres many many that have invested in euro in one way or another.
 

Gumbo

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Running a UK Tourism Business, I'm really enjoying the strong Euro, we had our busiest year for ages last year as people chose not to go abroad.
 

rynnor

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The biggest fear is that a euro collapse brought on by Greece would spread to Ireland, spain,italy, portugal etc which in turn could damage the banks again pretty badly necessitating further aid...
 

Bugz

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If Gordon Brown has done something right - it's having his economic test for joining the euro.

A lot of people think we would be a in a much worse state had we been part of the Euro now.
 

rynnor

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If Gordon Brown has done something right - it's having his economic test for joining the euro.

A lot of people think we would be a in a much worse state had we been part of the Euro now.

Yes and no - we wouldnt have as much freedom to get ourselves out of trouble but if we had been in the Euro the rules would have prevented Brown from over-spending himself into a defecit in the good years thus we wouldnt be quite as far up shit creek as we are today.
 

Bugz

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You are missing out on a lot of points:-

-> interest rate differentials would have fucked up our interest rates. Even the 0.5% difference currently is an extra 50-75 quid a month for the average home-owner at the moment.
-> the stability and growth pact has about as much authority as a wet towel. The big countries ignore it; so would the UK.
-> the fiscal stimulus was more regarded by g20, led by china, america etc. than europe.
-> the european bank's main priority is with re: to inflation. Thankfully the MPC aren't so shortsighted.
-> some think tanks reckon our unemployment would be nearing 15% in the recession if we were in the eu.

That said - debt is only really problematic if it transgresses into a inflationary/deflationary spiral or if raises risk premiums/reduces confidence. Variables we won't be able to measure until the global economy is comfortable again.
 

rynnor

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-> the fiscal stimulus was more regarded by g20, led by china, america etc. than europe.

I know you like the fiscal stimulus but it aint over till the fat lady sings - its too early to judge what it really did yet - if we get a double dip recession its going to look like an awful lot of wasted money.


-> the european bank's main priority is with re: to inflation. Thankfully the MPC aren't so shortsighted.

Thats because its heavily German influenced and they still remember the horrors of hyper inflation.

-> some think tanks reckon our unemployment would be nearing 15% in the recession if we were in the eu.

I would answer this in 2 ways:

1. Our unemployment rate probably already is 15% - the UK has been fiddling the unemployment rate in so many ways it cant ever be used in comparisons to other EU states and is now a completely meaningless figure that says more about rate of change of employment than being a true measure of unemployment.

2. I'll imagine you said the Euro rather than the EU and I'd have to say I cant see any rationale to that - we could still have made our own fiscal stimulus so we'd probably be in the same place unemployment wise.
 

Bugz

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(Firstly, those retorts don't really defend your side? Who cares about what influences the ECB's desire to tackle inflation as a main concern. It is something that could detrimental to our economy.

Secondly, you have doubt in the fiscal stimulus but you've come up with no viable alternatives. We do as we see best, according to the theory we have and the past evidence to back it up. Based on this - a fiscal stimulus seemed most fitting.

Thirdly, the measures are based off the ILO jobless rate, which if I'm correct, is internationally comparable.)

P.S - I see this turning into another discussion about the fiscal stimulus & the credit crunch so I'll stop here and you can steer it back on track with re: to the collapse of the euro.
 

Ctuchik

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Y
-> the stability and growth pact has about as much authority as a wet towel.


those fucking hurt! :<

so a wet towel, used properly can have quite a bit of authority :p
 

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