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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

#151

Post by mantas »

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.

Transfers as in better-off regions supporting worse-off ones.

Re: Euro falls below parity with the dollar

#152

Post by candiodari »

jmnicolas wrote: post #75
yuan43 wrote: post #59

The headline is "Gas crisis sends euro back below parity against dollar." Yet the article does not explain how a "gas crisis" leads to a weaker currency. What does lead to a weaker currency? On the EU side, central bank accommodation in the face of inflation ripping higher. Germany recently logged a 37% YoY annual increase in producer prices: https://www.reuters.com/world/europe/german-economic-outlook... And the ECB…

If the ECB raises interest rates most European nations wouldn't be able to pay their debts. It's an untenable situation, something will have to give.

But it's nowhere near the braking point, in fact it isn't nearly as bad as the PBOC or, arguably, the BOJ and the FED (per person EU debt is still less than the US), so they definitely still have the option to kick the can down the road.

Ergo, you can safely bet both your kidneys that nothing's going to happen.

It's crazy how hard it is to make 1 European country agree on finances these days, all the EU member nations agreeing to seriously tighten is about as likely as the President of the US declaring he is an alien.

Re: Euro falls below parity with the dollar

#153

Post by seydor »

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.

I mean in the sense of "rich countries aid the poor ones"

https://www.dbresearch.com/PROD/RPS_EN-PROD/A_European_trans...

Re: Euro falls below parity with the dollar

#154

Post by ParksNet »

jmnicolas wrote: post #75
yuan43 wrote: post #59

The headline is "Gas crisis sends euro back below parity against dollar." Yet the article does not explain how a "gas crisis" leads to a weaker currency. What does lead to a weaker currency? On the EU side, central bank accommodation in the face of inflation ripping higher. Germany recently logged a 37% YoY annual increase in producer prices: https://www.reuters.com/world/europe/german-economic-outlook... And the ECB…

If the ECB raises interest rates most European nations wouldn't be able to pay their debts. It's an untenable situation, something will have to give.

What will have to give is the welfare state. Difficult to see how a retirement age in the early 60's is sustainable given this level of inflation. Better to abandon pensions entirely and just offer disability stipends for those who cannot work due to advanced age.

Returning several million net-negative economic migrants to their home regions would also be necessary.

Re: Euro falls below parity with the dollar

#155

Post by Kudos »

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

I'm not sure that's accurate. For example, Ireland has been the net recipient of €40B since joining the union.

Re: Euro falls below parity with the dollar

#157

Post by tzs »

mytailorisrich wrote: post #93
KingOfCoders wrote: post #67

Last time a major war was in Europe, currencies tanked much more. I'm glad the EUR is as stable as it is while Europe is bombed by Russia.

Europe is not bombed by Russia and there is no 'major war' disrupting the continent. There is very localised war in Ukraine, which objective impact so far only concerns what Ukraine exports, mostly wheat at this point.

It also has impacted what Russia exports. Some Russian exports are rather important to much of the EU.

Re: Euro falls below parity with the dollar

#158

Post by mantas »

f6v wrote: post #111
KingOfCoders wrote: post #70

Earlier quoted context omitted.

Let the Russians bomb and invade Washington State and we'll see how the dollar does.

Ukraine is not in EU and shouldn’t be there.

Looking at certain EU members friendliness towards Russia, several other states shall be kicked out...

Re: Euro falls below parity with the dollar

#159

Post by cloutchaser »

fzfaa wrote: post #95
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.

It's time to inflict massive pain for the south. Can't spend any more decades wasting money.

Ironically they've already been in pain since 2008. But within the eurozone they can't escape the trap of having a strong currency (relative to themselves), combined with a terrible economy with massive debt.

The euro just cannot work in the long run. The sooner people up top admit this the better for 300m europeans. But they will never admit defeat.

Re: Euro falls below parity with the dollar

#160

Post by simonh »

orangepurple wrote: post #85
simonh wrote: post #63

Earlier quoted context omitted.

You can do innovation, the problem is scaling up to the mass market. The EU is supposed to be a massive single market at scale to rival the US and China, and in some ways it is, but it still has a fragments cultural and legal landscape. The gravitational pull of the US on European dev talent is really hard to ignore. Every year the cream of European IT graduates move to the US because that's where the big companies a…

On what visa do these students move and work on in the US? The US visa process is extremely onerous

There are 65k H1-B visas issued every year. The FAANG all have offices in Europe so they can put grads to work there until the visa comes through. Of course some companies are ramping up their dev capacity in Europe due to the shortage of grads in the US, that's why Facebook announced thousands of the devs they're hiring for the Metaverse will be in Europe.
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