Fundamental Views for Euro Currency

[20MillionDinar]

Fundamentals for the Euro:

Here are the negatives (in brief) for the Euro...

1. The Fiscal pact between Euro Zone nations is crumbling because the periphery nations cannot take any more austerity measures. It is a political mess and it is hurting the economies. What they need is QE but the ECB cannot do that. Europe is a unique case. All CBs around the world are loosening monetary policy to help stimulate growth and the EZ is doing nothing for growth.

2. The Euro Zone also has a very serious debt problem which they cannot solve without growth. Other nations also have debt problems but their CBs have the flexibility of controlling monetary policy to stimulate growth. The ECB does not.

3. The leading economy in Europe is Germany and they are slowly limping along. The other countries are far worse off than they are. Even Mario Draghi (President of the ECB) has said that there are significant downside risks to the economy in the Euro Zone as a whole. This is furtherbacked up by the econ data which clearly shows an increase in unemployment and decrease in consumer confidence as well as a decrease in the manufacturing and services PMIs

4. Spain is in deep deep trouble and Italy is not too far behind them. With rising unemployment of epic proportions not see in many many years coupled with severe austerity measures, they are all but doomed. Spain is a big and important economy in Europe but not enough to bring down the house of cards. However, Italy is a very different story. If the focus of the debt crisis turns to Italy (and I am sure it will soon), things will get very nasty. Currently there is enough noise from Spain to keep the media focused on it leaving Italy largely ignored... for now.

5. In the next few months certain political events will unfold which will decide if the EuroZone economy and debt crisis will improve or get worse. These events will have a correlating effect on the value of the Euro. Currently the outlook is negative and the risk is to the downside. If that changes in the near term, I will be extremely surprised.

Here are the positives (In detail) for the Euro...

1. Europe has enough wealth and resources to correct the problems on its own within the next 3 to 5 years. However, they are missing the political will to get it done. Some changes in government may set things on the right path... Maybe

[mcjocky1]

I am not going to re-quote the whole above article, just ask one question ? Is the above completely composed by yourself, as more than one of the articles posted by yourself seem to bear a stunning similarity to those of one Roger Bootle of Capital Economics. No problem with the personal beliefs stated as I concur with a few stated, it is more than likely just coincidence, but when trawling through many hours of type, phrasing and paraphraseing (like morse) draws ones attention to such things. No offence or disrespect intended, just basic curiosity kicking in.

[20MillionDinar]

Hi McJocky,

No, these are not my words.

I actually frequent a EUR/USD thread at FOREX Factory and this was posted this morning by a very well respected member. I don't know if this was his wording, or if he got some of it from somebody else, but I thought I would bring it over here to DV for anybody who was interested.

Somebody asked him for his Fundamental views on the Euro less than 24 hours ago and the above is what he responded with. I thought it was a good read!

Edited May 6, 2012 by 20MillionDinar

[gamblinkid]

20--thanks for article; mc--thanks for noticing authenticity.

[mcjocky1]

Thank you, I too frequent numerous sites in my quest for viable information on numerous financial projects and this just sprung out at me and raised the possability of a link between contributors. De Gaule was very anti UK initially in regard to it joining the then Common Market and co-opted with Germany to frame financial, agricultural, multi policies to prevent the UK from fully joining the then I believe nine countries involved. Later when the UK refused to join the E.M. Policy some old scars seemed to raise their heads and the UK was edged out of central policy matters and were punished by punitive cutting of the subsidies enjoyed by other member states... France and Ireland with their small "farms" ( under 10 acres ) were costing the Common Agricultural Policy in the region of £70,000.00 Per. Annum. each, and we had Butter and Cheese "mountain's" which had to be sold at incredible loss before it became inedible oweing to the cost of refridgerating huge warehouses, and the maintaining of buying said items at the pre set "intervention" price. As stated in other items, the EU is a complex marriage of nations that really in all honesty may be better suited to the divorce courts, but are all worried about the horrendous rulings that might come about, and the costs to either party. Midnight approaches so I will say Au revoir.