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Euro falls below parity with the dollar

reuters.com

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Re: Euro falls below parity with the dollar

#141

Post by seydor »

mojuba wrote: post #140
mutatio wrote: post #79

Earlier quoted context omitted.

The ECB has its hands tied behind its back, perfect storms like this highlight one of the benefits of a country having its own currency and fiscal policy - the ECB cannot move like UK/US as reconciling Greece/Italy and Germany/Northern Europe can't be done without massive pain for the south.

On the other hand though, the Eurozone population pretty much equals that of the US, and surely there are a bit underdeveloped US states compared to the overdeveloped ones, right? So why is the EU bad idea and the US is not?

Because US is a transfer union. In EU you have a lot of transfer unions within individual states (eg. East-West germany, North-south italy). When a greek moves to germany for work, the money does not flow between the two countries

Re: Euro falls below parity with the dollar

#142

Post by [deleted] »

mojuba wrote: post #140
mutatio wrote: post #79

Earlier quoted context omitted.

The ECB has its hands tied behind its back, perfect storms like this highlight one of the benefits of a country having its own currency and fiscal policy - the ECB cannot move like UK/US as reconciling Greece/Italy and Germany/Northern Europe can't be done without massive pain for the south.

On the other hand though, the Eurozone population pretty much equals that of the US, and surely there are a bit underdeveloped US states compared to the overdeveloped ones, right? So why is the EU bad idea and the US is not?

[deleted]

Re: Euro falls below parity with the dollar

#143

Post by MomoXenosaga »

fzfaa wrote: post #116
jacquesm wrote: post #109

Earlier quoted context omitted.

They're not wasting money. They simply don't have the massive wealth of the North to jump off from or to cushion blows. On top of that a large quantity of what they do earn is spent on interest payments to the North.

I am from the south. We are wasting money and producing too little. We don't have the massive wealth of the north because we are culturally incapable of behaving some other way.

It's like the US: young people move from poor states to rich ones. Nobody in America ever talks about the basket case that is Alabama. People have been moving into New York and California for a hundred years.

Anecdotal: My dentist was from Rumenia. I'm sure they need dentists too but he can make more money in the Netherlands.

Re: Euro falls below parity with the dollar

#144

Post by karatinversion »

swamp40 wrote: post #131
rvense wrote: post #105

Can someone explain to me how raising interest rates combats inflation? Doesn't it do the opposite? If rates go up, financing becomes more expensive, meaning I'll need more money to do business, meaning I'll have to raise my prices to match?

I've always had this cognitive dissonance as well. Especially the link between rising interest rates and lowered food prices. I always ask and get ignored. I suspect it's because that's all they can really do. They are a one trick pony.

There used to be a joke that the model was raise interest rates -> construction projects become unprofitable and get cancelled -> construction workers cannot afford food, reducing demand -> lower prices

Re: Euro falls below parity with the dollar

#145

Post by GordonS »

alecco wrote: post #91
debacle wrote: post #21

Just for fun, I took a look at GBP/USD and it looks like that is tanking as well. Meanwhile the ruble is stronger than it's been in 4 years. For people in the EU/UK, how has this currency slide impacted your day to day?

Rents and general cost of living keeps rising.

Also seems like there are more strikes or strike ballots happening every week.

Re: Euro falls below parity with the dollar

#146

Post by mojuba »

seydor wrote: post #141
mojuba wrote: post #140

Earlier quoted context omitted.

On the other hand though, the Eurozone population pretty much equals that of the US, and surely there are a bit underdeveloped US states compared to the overdeveloped ones, right? So why is the EU bad idea and the US is not?

Because US is a transfer union. In EU you have a lot of transfer unions within individual states (eg. East-West germany, North-south italy). When a greek moves to germany for work, the money does not flow between the two countries

How do you mean? Euro transfers within the EU work like domestic ones, it's a rule. I've moved a few EU countries in recent years and I've been able to use the same bank (Revolut) for everything everywhere I moved.

Re: Euro falls below parity with the dollar

#147

Post by mytailorisrich »

HatchedLake721 wrote: post #125
jmnicolas wrote: post #78

Earlier quoted context omitted.

While it has the potential to become one, this is not a major war by any means, it's contained in south-eastern Ukraine.

What's the definition of "major war"? It's the biggest war on the continent since WW2 where two countries with 100,000s of soldiers fight each other with modern weapons.

People tend to forget Yugoslavia, which was really in the heart of Europe and killed about 150k people.

There is a lot of hyperbole about Ukraine, not least because of Russia but so far it is not intrinsically disruptive outside of Ukraine's (and Russia's) borders beyond the disruption to Ukraine's exports (e.g. wheat). The disruption to gas supplies on Europe is mostly self-inflicted and not an intrinsic consequence of the war.

Re: Euro falls below parity with the dollar

#148

Post by simonh »

ElCheapo wrote: post #132
simonh wrote: post #121

Earlier quoted context omitted.

Competitors to Microsoft, Apple, Google, Facebook, Amazon/AWS, Netflix. The only thing we have that's even vaguely comparable that started in Europe is Spotify and it's 1/3 the size of Netflix, which itself is the smallest of the US tech giants.

You have listed many companies that do many different things so I don't really know what you mean. But in any case, how would a natively European competitor benefit Europe? Are we talking about money, jobs or what exactly?

Money, jobs, IP, skills, influence. As I pointed out in another thread, Europe loses a lot of top IT/CS graduates to the US every year because they can earn 3x to 5x the money.

Re: Euro falls below parity with the dollar

#149

Post by LittleNemoInS »

rvense wrote: post #105

Can someone explain to me how raising interest rates combats inflation? Doesn't it do the opposite? If rates go up, financing becomes more expensive, meaning I'll need more money to do business, meaning I'll have to raise my prices to match?

Inflation occurs when demand is greater than production. This means there is too much cash flowing around. By raising interest rates, you tighten the cash flow : It's harder to get cash from the banks, thus the demand will diminish, and the prices will lower.

Re: Euro falls below parity with the dollar

#150

Post by jsnell »

mojuba wrote: post #146
seydor wrote: post #141

Earlier quoted context omitted.

Because US is a transfer union. In EU you have a lot of transfer unions within individual states (eg. East-West germany, North-south italy). When a greek moves to germany for work, the money does not flow between the two countries

How do you mean? Euro transfers within the EU work like domestic ones, it's a rule. I've moved a few EU countries in recent years and I've been able to use the same bank (Revolut) for everything everywhere I moved.

They mean a policy of redistribution of wealth between countries, not the mechanics of a bank transfer.
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