By the Way, the Euro May Be Dying
Consider this a poll of sorts.
Among monetary economists -- which is my training at least, and which I still practice when time allows -- the crisis of Greece and its potential to bring down the German government is the biggest news of the week. The potential for it to trigger QE3 is large. The euro jumping the rails would most certainly spread economic slowdown into the US, making the probability of recession greater.
But outside of that smallish clique, it seems the US blogeoisie, if you will, has paid little attention to what is going on over there. Matthew Yglesias gets a bonus point for reading the Financial Times and comprehending. Aside that Memeorandum holds no posts about the EU. So my question is: do you care? How much have you read on this (beyond the link-filled post you're reading now)? If there are enough positive responses, I will return with some posts on the situation there. If not, this post may proceed down the memory hole with dispatch.
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Mar '11
Re: By the Way, the Euro May Be Dying
Oh, I care. But I also think that the Euro was a bad idea in the first place (and a "United States of Europe" is even worse). So if this kills the Euro and Europe goes back to national currencies, then that's a silver lining to this dark cloud. Of course, the cynic in me also realizes that it could replace the EU with something even worse.
Oct '10
Re: By the Way, the Euro May Be Dying
The euro is the future of the US monetary system if we keep on the Obamanomics track. It never hurts to keep tabs on your future... as though anything but the next election gives us an action point.
Jul '10
Re: By the Way, the Euro May Be Dying
The euro is toast. Germany is done with playing Bruno Bailout at the EU summer picnic. I called attention to it here (I think I have three readers now, counting Mrs. Sisyphus, maybe, but I am sure they are all spun up), and John Hinderaker at Powerline spoke to it here. But I share your surprise at the overall silence. Perhaps some are waiting to see if Merkel pulls off a miracle.
Edited on Aug 30, 2011 at 7:35pmJun '10
Re: By the Way, the Euro May Be Dying
More please! I may not comment on every post, but I am very interested.
Dec '10
Re: By the Way, the Euro May Be Dying
The same fate awaits us when the national government starts bailing out the failed states like California.
Jul '10
Re: By the Way, the Euro May Be Dying
Agreed. Hoping to hear more from you about this, King.
May '10
Re: By the Way, the Euro May Be Dying
But note that Spain may be coming to its senses.
Dec '10
Re: By the Way, the Euro May Be Dying
Agree.
Nov '10
Re: By the Way, the Euro May Be Dying
I'll second Cas.
May '10
Re: By the Way, the Euro May Be Dying
Economists don't always comprehend economics. That's why the rest of us get headaches just thinking about it.
This site made me investigate Modern Monetary Theory and how it seems to be Keynes on steroids. So, write away. Just ignore the stupefyingly blank look and slack jaw above my collar...
Nov '10
Re: By the Way, the Euro May Be Dying
I don't understand money, but I don't think anybody else does either. Do you understand money?
Re: Bernanke's very long pause before answering Ron Paul's question, "Is gold money?" I think that nobody knows, nobody knows what money is.
Aug '10
Re: By the Way, the Euro May Be Dying
I'm praying for a breakdown of the European monetary union. The entire European project has been bad for human liberty, and promised only to get worse, so anything that subverts it is a Good Thing. Let it fall even if it has a negative effect on the rest of the world's economy, because those effects will be temporary.
Apr '11
Re: By the Way, the Euro May Be Dying
I, too, care and am very interested. I'll read anything you bring our way.
Apr '11
Re: By the Way, the Euro May Be Dying
So my question is: do you care? How much have you read on this (beyond the link-filled post you're reading now)? --------------- My first response is yes I care (for what it's worth). Second, I've not read too much- and the WSJ hasn't had nearly enough directly addressing this issue in my opinion. CoffeandMarkets has been discussing this quite a bit in the last month. It does not appear that Italy's measures to rein in spending along with France, Spain and England proposed measures are doing enough to quiet market fears. So, in my reckoning, that makes Angela the most pivotal person in Europe today. Does she bail out the piigs and risk getting lynched by her fellow countrymen? (I'm not certain that's all hyperbole either ). Or does she abandon those countries and bring on potential financial meltdown?
Apr '11
Re: By the Way, the Euro May Be Dying
Paul DeRocco said:I'm praying for a breakdown of the European monetary union. The entire European project has been bad for human liberty, and promised only to get worse, so anything that subverts it is a Good Thing. Let it fall even if it has a negative effect on the rest of the world's economy, because those effects will be temporary. ------------ Be careful what you wish for. The effects won't isolate themselves to Europe. Rebuilding a financial system would take years in a Europe where no one has had that responsibility in eleven years.
Apr '11
Re: By the Way, the Euro May Be Dying
Sisyphus, you have at least four readers now! Thanks for the link. I have seen little about this in my daily web wanderings.
Mar '11
Re: By the Way, the Euro May Be Dying
David John: I don't understand money, but I don't think anybody else does either. Do you understand money?
Re: Bernanke's very long pause before answering Ron Paul's question, "Is gold money?" I think that nobody knows, nobody knows what money is. · Aug 30 at 8:11pm
One can be a capitalist and believe in markets while also realizing that much of what passes for modern economics... especially involving fiat currency... is hooey and a big scam.
Jul '10
Re: By the Way, the Euro May Be Dying
David John: I don't understand money, but I don't think anybody else does either. Do you understand money?
Re: Bernanke's very long pause before answering Ron Paul's question, "Is gold money?" I think that nobody knows, nobody knows what money is.
Gold has always been money and will always be money. Silver and platinum as well. Copper is valuable enough at the moment to be usable as well. In order to enforce his fiscal policies, FDR issued draconian laws in an attempt to eliminate gold's use as currency in the United States.
Bernanke's predicament in answering the question is the trap. Ron Paul wants to force a gold standard and eliminate the Federal Reserve. This would eliminate Bernanke's ability to freely create fiat money and make it much easier for holders of the dollar to tell when their holdings are being devalued.
Gold is not a panacea, but I will leave it to one of our real economists to contrast the two approaches. My personal preference is a system allowing multiple national floating currencies, each based on a different form of specie, with exchange rates between them pegged to daily market transactions.
Oct '10
Re: By the Way, the Euro May Be Dying
King, I am very interested in this topic. Please continue to post. When the Euro was created, I never understood how a monetary union could succeed without control over the fiscal policy of each participant. Also, by implementing most decisions via a very strong bureaucracy and not by democratic votes, they did not obtain the approval of the voting public for these decisions in the countries of the Eurozone. Now, it appears that the Germans have begun to realize their fiscal discipline was supporting the countries with profligerate fiscal policies and this may now bring down Angela Merkel's government and perhaps create a public consensus to return to the Deutschmark.
Is the only way to save the Euro to expel countries like Greece and Portugal from the Eurozone, let their new currencies devalue, and force them to get their fiscal house in order? The other options currently being discussed seem to simply put off the day of reckoning.
May '10
Re: By the Way, the Euro May Be Dying
I just finished a decade in Europe running companies in Spain and UK. I walked away absolutely convinced that the Euro could not survive in its present form and probably would not survive at all. I follow this daily & would love to have your input.
While the USA is heading for recession all by its lonesome, I think the imploding of the Euro is going to set off a chain of events that will force the western world to address the debt unraveling it has to do - and it is not going to be fun. Just look at CDS pricing which is already higher than 2008.
Sysiphus/David - it is confusing but essentially, fiat currencies like ours and the Euro are debt instruments serving as currency. Once we left the Gold standard we & the rest of the west (exc. Switzerland and few others) proceeded to treat it as an experiment in irresponsibility - racking up unimaginable debt. This will all end but not well - and I believe our trials are approaching must faster than anyone thought even a few months ago.