211–220 of 286 posts
Earlier quoted context omitted.
No big sector has seen similar level of YoY growth like tech. STOXX 600 is almost flat for last 20 years. While S and P 500 and Nasdaq rose 5-10 times over that period. While tech is not everything for the economy, it seems tech is everything for economy growth in past 30 or so years.
That tech stock growth doesn't translate to any benefit for the average citizen.
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…
> Deeply negative real rates and little indication that the ECB has the stomach for any substantive action. You can't have positive real rates AND pump up the real estate bubble. There are two parts to growth - population and actual growth. The majority of "actual" GDP growth for the last 20 years in the West has been people paying more money (inflation adjusted) for the same land. Why? Because you could! Interest on…
That said I'm curious how things will develop. Now that U.K. expects up to 18% inflation I wonder if the price-salary-real estate spiral in the metropoles can keep up its momentum.
Earlier quoted context omitted.
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.
> mostly wheat at this point Wheat and a few million people who had to leave their country, but yeah, wheat... It obviously is a major crisis in Europe and has many ramifications, if all your neighbours mysteriously die in the same week it won't affect you personally but you surely will feel down or threatened. If it was just about wheat nobody would care, Ukrainian wheat isn't even exported to EU countries
This premise relies on a mysterious, unknown cause though. It's more like your neighbors fighting your other neighbors.
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?
Rich countries in the north especially Germany put in place policies akin to dumping and were shielded from the effects it should have had on their money by the economic gap with the poorer countries in the south. Southern countries found themselves handicapped by an overvalued currency. Meanwhile politicians in the north refused any form of transfers and keep popularising the idea that southern countries are poorer because they lack discipline.
> German economy, among the most exposed to disruptions in Russian gas supply, is "likely" to suffer a recession over the winter if the energy crisis continues to deepen At this point I feel the EU is pretty much done and the war just showed how weak the EU leadership is along how individual member nations acting sometimes totally against each other (see France doubling down on nuclear while Germany does the opposite…
Let the Russians bomb and invade Washington State and we'll see how the dollar does.
Ukraine is not part of the EU and the EU decided to take a moral position and live with the financial consequences that go with it.
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…
> Deeply negative real rates and little indication that the ECB has the stomach for any substantive action. You can't have positive real rates AND pump up the real estate bubble. There are two parts to growth - population and actual growth. The majority of "actual" GDP growth for the last 20 years in the West has been people paying more money (inflation adjusted) for the same land. Why? Because you could! Interest on…
This is great for German exports. Expect to see more Mercedes Benz in the streets of America. It generates some inflation as imports are pegged to the dollar(somebody mentioned that it is hedged, it is just by some extent), but overall is actually good for the economic block. The EU needs to export to survive. The EU has been fighting a possible deflation for most of the 2010s, this is actually not so negative as peo…
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.
They don't have this wealth because when they were given access to interest rates much lower than what they would have under independent central banks / currencies they went and spent it on consumer goods instead of investing into capital.
I really wish the south acted like the north is acting now when Germany was considered the sick part of Europe in the 90s. We would have avoided so much trouble.
Earlier quoted context omitted.
I think if the Russians bombed Washington State, the rest of the US would actually help defend it by attacking Russia. While the military help that the EU is giving Ukraine is great, it is far below the level that the other states would provide Washington. I know that isn't exactly your point, but you can't say that Ukraine is as intrinsic to the EU as Washington State is to the rest of the US.
Ukraine is also not in the EU.
I assume this should be good for EU economy on the long run? Like exports from EU to US are now more profitable. Or am I missing something? Can someone with more understanding/background explain how this might effect production and exports?
Yes, it is indeed good in that it makes European exports more competitive, but on the flip side, imports are more expensive, which can mean inflation and/or increased sensitivity to supply chain disturbances. I’m sure it causes some other problems as well. (not my area of expertise)