The once mighty Euro is not so mighty anymore

[golfguru]

For a year now, the once-mighty euro has lurched from crisis to crisis as debt-ridden Greece and then Ireland were forced to ask their neighbors to bail them out of financial trouble.

My bohemian mindset says debt is never any good, since few seem to prosper when
drowning in debt. I think president Obama is getting it, and his SOTU will address
the debt problem brewing and bubbling here in USA. He is going to shock many.

http://www.latimes.com/news/nationworld/world/la-fg-euro-qa-20101225,0,662282.story
http://www.csmonitor.com/World/Europe/2010/1223/Despite-Greece-s-2011-austerity-budget-a-financial-chill-deepens-in-Europe
http://www.nytimes.com/2010/11/18/business/global/18euro.html

[onehandle]

1. The Euro will return to kicking the dollar's ass before you know it. nt

[JCMach1]

2. But not until after Portugal, Spain and Italy do something about their debt...

In other words not for a long time as Spain and Italy are still in denial...

[vaberella]

11. France as well and England who doesn't even use the Euro is facing bankruptcy. n/t

[golfguru]

3. Could be cuz the Europeans are doing something about the debt

Here in good ole USA it is party time. The richest 2% get to keep
their Bush tax cuts and the 2 wars continue to bleed the Treasury.

[vaberella]

10. Uh...where do you get your info. France is about to declare bankruptcy.

Everyone is getting pay cuts and all the universities in France have faced massive budget cuts to the point that my french clases have been terminated and teachers are getting pay cuts. Additionally a program that helps people pay for housing here has been trying not to pay me for the last 6 months. They owe me 1200 euros and I'm about to take them to tribunal over this. And you're saying they know what to do with their debt? They're actually all looking to the US since the US is currently fairing better than them. While the US is seemingly facing a upward trend---the EU nations are only going on a downward spiral.

[vaberella]

9. I live in France. No it won't. France is going to announce bankruptcy soon and so is England.

So no...the euro is not going to kick anyone's ass. You want to move to China or India for ass kicking.

[Imajika]

15. Your kidding right?

The Euro isn't going to be kicking much of anything other than perhaps the bucket anytime soon.

Several nations already want out of the single currency.

[DrToast]

4. The Euro has never been mighty

The Dollar and the Yen are the two currencies that people turn to in times of crises. That's all you need to know.

[golfguru]

8. I had to pay $2.50 for a cup of coffee in a Styrofoam cup

with non-dairy creamer in a European airport
2 years ago and you could'nt convince me Euro was not inflated.

Compare that to my stay at high rise Royal Lancaster hotel overlooking
Hydepark in London which cost me all of $25 per night several years ago.

[Doc_Technical]

5. If my memory serves me correctly,

when the Euro was introduced, it was worth $0.96US.
Now the Euro is "only" worth $1.36US.
Where is this "fall" of the Euro of which people are talking?

[mkultra]

6. from $2 just a few years ago

[golfguru]

7. Last time I was in Europe 2 years back it was $1.66 = 1 euro

that is a large fall as currency exchange rates go

[vaberella]

12. A few nations are preparing to file bankruptcy dude.

I can't open the tv or go to school without hearing about it.

[and-justice-for-all]

13. The euro is not going anywhere...

and it will remain on the heels of the US dollar like a rabid dog. At some point in the near future, the US dollar will be overcome by the euro. Currently 1.00usd = 0.75 euro, that is not exaclty a major divide.

I think that the headline should read "The once US Dollar is not so mighty anymore."

[golfguru]

14. State of Illinois is in dire straits...already

For most of this year, the state of Illinois has lacked the money to pay its bills. Some of its employees have been evicted from their offices for nonpayment of rent, social service groups have laid off hundreds of workers while waiting for checks, pharmacies have closed for lack of Medicaid payments. Faced with $4.5 billion in overdue payments, Illinois has proposed a precarious plan to sell its delinquent bills to Wall Street investors in exchange for cash, calculating that the interest it must pay the investors will be less than the late fees it owes.........read more at:

http://www.nytimes.com/2010/12/26/opinion/26sun1.html?_r=1

[ShadowLiberal]

16. If we wanted to do something serious about our debt we should have done it under Reagan

If politicians wanted to do something serious about the national debt then they should have done it during Reagan's presidentcy, when national debt hit $1 trillion dollars. Instead all anyone did was just say "oh it's so bad we have so much debt", while doing nothing to stop the problem from getting worse.

The fact is politicians STILL aren't being serious about the national debt as an issue.

If we were to cut our military spending down to us spending only 3 times as much money as the nation with the 2nd most expensive military in the world, we would not have a deficit today.

If they want to get serious about paying off our national debt then they'd be talking about not just spending cuts, but tax hikes as well. It's totally outrageous how the debt commission's 'plan' was to lower taxes even more, under the naive assumption that we could reform our tax system and keep big tax deductions off the books. The last time we 'reformed' our tax system like that some of the very tax loopholes they 'fixed' were readded within a few years.

[ieoeja]

17. If stronger currency is good, why does China keep theirs artificially weak?

First, some Euro data. This chart shows number of Euros you can purchase for a single dollar based on monthly averages. Which means up is weak and down is strong.




So it hit the strongest point two years ago. Of course, stronger currency is not necessarily a good thing (he finally gets to the point of his post!). It makes your exports more costly, for instance.

Another, real life example ... I know a company that continued increasing sells, but ended up with less profit during this economic downturn soley because the profit is calculated in US dollars. Since the US dollar has strengthened over the years, everything they sold for Euros now buys fewer dollars. So greater sells end up being lower income because of a stronger US dollar.

And as noted in the thread titleexample: China keeps their currency valued artificially high, not low. If a stronger currency were an overall good thing, don't you think they'd stop doing that?

[Supersedeas]

18. costs and benefits....butter and bullets...and Chinese drums in the distance