Each currency “fails” ever.Like any country, business, sector and other things in this life. Everything ever goes a time piece. For the euro, that is no different to the Canadian dollar, the Roman axis, the Lions Daalder, the bitcoin. We don’t usually know when that is. There are no indications that the euro will soon fail everywhere .
And what is failure?
All international currencies compete with each other.You’ll notice this on the international money market. In fact, the digital version of Euro competes with the cash version. Every time you make money pint you notice that. Chips in a casino or coins at a festival are sometimes more convenient than a digital variant. So, whether they are made by a state or by a company, as long as two people think it’s cheaper to do transactions in euros, there is market demand.And as long as there is supply and demand, the euro does what it should do: bring more marginal transaction costs down than all the other currencies of all time, at this time, for this transaction for these two people.
Can it matter?
The next question then is whether the marginal cost of making an extra euro ‘ outweigh all the transaction cost reductions that the euro achieved per additional unit (marginal yields).Can the euro be out for Greece if they do not intend to implement tax reforms? Or beter芒 鈧?娄. Is any fiat currency not just an artificial state monopoly? If you prohibit the use of and trade in other currencies in your country, set up import-quotas or refuse to accept it as a tax payment, they will automatically become far too expensive (black market). Is The euro zone an optimal currency area (OCA)? Is having a privately issued Bitcoin not much better? Or why Marshall itself would have been tenaciously against the Posthumme notion “Marshall-Lerner criterion” because swap feet and exchange rates are a bit confused there? Look, now it becomes exciting.
And you can argue about that.And a huge tree about setting up. Roughly there are 3 trees.
- Scientific debates such as the questions that have just been touched on.
(If you can explain who bears the real cost of the 20% depreciation of the British pound over the past three years, you would not set that question about the failing euro. *
When it comes to currency wars, that is half the time with a nationalistic protectionist agenda.
TL; DR. Most people who ask about the “failing euro” are stupid meme-Rehashers , commercial trolls or political trolls.
The euro does not fail.The debate on it often does.
The Euro fails if it is meaningless outside Europe. As wealthy people in for example Turkey only save Dollars or Swiss francs.
The Euro is the means of payment of one of the largest economies in the world.Compared to the Dollar, it has a fairly stable course. I don’t feel like I have to invest my savings in another currency.
The Euro is the common means of payment of different countries, which have traditionally had a different monetary policy.The northern countries strove towards a stable currency, the southern countries expressed relatively easy money to complement state deficits.
Money reprinting is a type of external tax system; The government has more money and the citizen is poorer because the money is worth less. As long as you don’t press too much money it is a very effective system.
Now one makes in Europe one uses three systems.
- If you have a strong currency and a lot of euroos is spared abroad, one can print money without the money falling in value.
Points 1 and 2 are possible because the Euro is a strong currency (artificial low interest rate).
These are just a few points.As an economic union, monetary policy is a pillar of the EU.
Eventually though.At the moment, for example, interest is artificially kept low by the European Central Bank. This is done to keep the southern European countries out of the recession. The North has a need for higher interest rates, but must now live with those artificially low interest rates. A direct consequence is that our pension funds are no longer profitable and we have to shorten the pensions. These types of differences are not sustainable in the long term.
Think also of Greece that has been in debt in an insane way.The Italians also want to do that. Without joint budgetary and fiscal policies, a currency cannot continue to exist.
Since the worldwide decision to release the 芒 鈧?虄gold Standard 芒 鈧劉, no currency is more to be trusted.The Golden Stsndaard held, that each printed banknote in any case in part a value in gold is retarded.
It is true that all the countries have decided to do the same, the Euro is not better or worse than other currencies.The Newbies (Bitcoin & Co.) are nothing more than fried air, but nowadays the Euro is not much different. Inflation has increased considerably since 2002. Prices, which were converted first, were eventually taken over 1 to 1, which already represents an inflation rate of 220%. Since then, they have risen further.
Failure is a big word, but an improvement has not proved to be the Euro.The only advantage is \\it no longer need to swap money within Europe.
Tricky to say.It is more how banks, financial institutions and national governments deal with it. This certainly played a role during the crisis in Greece. I trust the euro itself but not the system behind it and the most interested parties.
First the euro, then we became Germany and quite neuro.Then the Pleuro broke out and the Fleuro disappeared, but I don’t tell you the story in Geuros and Kleuro.
Today, everyone has heard of crypto coins like Bitcoin and Litecoin.
The most heard criticism is that such coins are virtual.
That is to say, you have no coins or notes that you can hold in your hand.
The value of the coins is arbitrary compared to the known currencies such as the EURO, the USD and GBP.
The purchases with known currencies of Bitcoin are based on supply and demand on so-called exchanges.
There is little to do, it is what it is.
But to come back to the EURO, even the coins that we have known for a long time have a certain characteristic that worries.
It is FIAT money, fiduciary money, the government guarantees the value of the money.
Up to 1933, every dollar printed in the US had to be provided with 40% of the value of the coin in gold.
The Government therefore had to maintain a gold stock representing 40% of the money supply.
President Roosevelt declared the possession of gold illegal and obliged all citizens to redeem their gold for FIAT money.
In 1971, Nixon removed the last barriere so that the state should not hold any gold in proportion to the amount of money in circulation.
What we now see as 100 EUR or 100 USD is in fact paper with a number where the citizen does not know better than that it is effectively 100EUR or 100 USD.
We know about what we can buy with it.
But actually it is a kind of appointment that is not based anywhere.
A bit like “The Emperor’s New Clothes”.
Especially because the central banks are not unmanageable at all and are printing billions of money.
Because how easy is it for a government to spend money if they can simply print the money and then issue it?
In the eurozone, the situation is precarious, large economies such as France, Italy and Spain have huge debts, Belgium too.
In addition to the debts that are far above the Maastricht standard of 60% of GNP (Brute national product), these countries still have a deficit in the budget.
They give more than they come in.
As an example, we take Belgium, where the debt is more than 100% of GDP.
The deficit this year is twice as large as expected, perhaps 7 to 8 billion.
Belgium has a repartition system for pensions.
That is to say, who is now retiring the past 40 a 45 years pension money has transferred to the State in exchange for the promise of retirement from the day of retirement.
The government has already spent this money.
And on top of that, even more than the income of 1 year (BNP) borrowed and spent.
And each year one gives a few percent more out than one gets inside.
The ECB’s money is the interest rate at which countries borrow about zero, Belgium now lends even to negative interest rate.
The normal stock market peaks are about 8 to 10 years.
The previous peak and dive of the fair was around 2008.
Through the artificial printing of money, the ECB has created a bubble that increases every day.
All in all, Belgium is virtually bankrupt, they have a commitment based on pension contributions that they have already received (and therefore have to retire at retirement) of more than 300% of GDP.
You read that well, more than 300% of GDP.
Every year, there is a gross estimated one billion additional expenditure, only due to rising pension costs.
Many more people are retiring than there are active people contributing to the State treasury.
An official pays taxes, but that actually gives a piece back from what he or she gets from the Treasury.
Make no mistake, the real revenues for the state treasury, come from about 1 million workers, maybe 1.5 million.
Those 1.5 million keep the 11 million in total above water.
And their number decreases every year.
If we look at the telecom infrastructure, we see that the state company Proximus did not invest much in fiber to the home because it was to be the state treasury with dividends, which drastically reduced investment.
The roads are in poor condition, every day 200 to 300 km file in the morning and evening.
Tunnels are closed because pieces of the ceiling fall.
Cars are the dairy cow of the state, but the yield has certainly not gone to infrastructure.
The railways and buses cost handfuls of money, reasonably old equipment and quite a few strikes.
The public services work in particular next to each other, little automation to keep as many people as possible at work.
That is to say, more than 50% of the active workers in getting started for the government and countries with a percentage of less officials do it significantly better also in terms of service provision.
Another small remark for the EURO in general.
The southern countries are experiencing a much higher amount of undeclared work and inefficiency.
By devaluations this right was drawn in relation to more efficient economies such as Germany and the Netherlands.
The single currency allowed Greece to borrow as if it were Germany, but could not use devaluations.
This construction mistake should have been leading to the end of the euro for a long time, it was not that the ECB is simply making money and the EU is primarily a puppet stand where the clean appearance prevails.
Thus the southern problem is not solved whereby the problems further proliferate.
Gentle whole masters make smelly wounds.
Look at the USA where they left hundreds of banks to head over.
A financial drama without any more.
In Europe, we have several zombie banks that were not allowed to go bankrupt for various political reasons.
As a result, the wrong people within these banks continued to do so and we regularly put up capital problems with these zombie banks.
The letting of this kind of cancers may have prevented a painful system reset.
Unfortunately, all these factors contribute to pumping up a much bigger and more serious bubble.
When we look at the past, the government intervenes by freezing access to bank accounts and funds (Greece, Venezuela,…).
It is 100% sure that you and I are going to pay the gelag.
The reason Bitcoin originated is the fact that your money is suddenly blocked and that cryptocurrency can easily be bypassed this freezing.
But, that does not mean that a cryptocurrency is a good idea because they are struggling with other problems.
Whoever knows nothing about such coins, is quite far from these coins.
This is not an opinion, just an attempt to explain the bubble.
All other FIAT coins also have the problem of unlimited printing in common.
So also the USD for example.
Now, the USD is still the global reference (e.g. oil is always in USD) and the EURO is not.
To what extent that is an advantage, I leave to others.
What is certain is that it cannot continue.
And we are today in a situation that is unique and new.
On 19 July 2019, Geert Noels wrote the following in time (I put certain pieces in the “fat”):
“The courses Of Finance from twenty years Ago are no longer correct. And that is not only due to the chapter on interest rates.
Even when it comes to the role of central banks (formerly reluctant, now hyper-active), the bitcoin, the blockchain, the increasing and even predominant role of passive management and the impact on price formation, they are not up-to-date. And every day something new comes up: The Libra, crowdfunding, a fintech company that bypasses banks, banks that are trying to circumvent the regulations with financial instruments. The financial system is in transformation.
These are all but small disruptions compared to the disruption that the central bankers themselves have caused.The checkpoints of the system have been resisted. The negative interest rate has a huge impact on long-term savings, on contracts, on the behaviour of savers and investors. Many classic models, but also the more complex such as Black & Scholes are confused by the long-term use of a non-conventional monetary policy.The concerns of bankers, insurers, pension funds and depositors are increasing. And this is reinforced by the fact that for years it has been promised to normalize the exceptional situation (in the direction of the manuals), while the recent months 芒 鈧?虄terra Incognita Pecuniaria芒 鈧劉 is being explored. “
What the sensible people see coming for years is ignored.
When the first seem to fall out of the closet, the case is discussed but not addressed.
When it is too late (CFR Greece), one is given a last chance through the ECB who does what is necessary (Draghi pronunciation) to give the politicians the chance to put things on hold.
And still nothing happens.
The ECB’s interest CANNOT rise because then France and Belgium are immediately bankrupt.
Yes, the EUR has been killed.
But thanks to politics and the dirty tricks of the politicians, it is impossible to predict when the seed explodes.
But every bubble explodes.
That’s for sure.
Of course the euro does not fail.Have you ever experienced a situation where people or companies were refusing payment in Euro芒 鈧劉 s?
In its short existence, the Euro has become the means of payment with the largest volume in circulation and second 芒 鈧?虄Reserve Currency芒 鈧劉 in the world.That will mean that all the countries on the world are saving Euro芒 鈧劉 s as an apple for thirst.
Who are these stories of terror that would go wrong with the Euro?American economists who are worried about the position of the Dollar? Idiots from England, who see their beloved Sterling in not going? Just jealousy if you ask me.
Ultimately, exports are products that give a foreign currency value.Look who the best exporters of the world are and who the worst in this article
No, the Euro is okay.
They are revisionists who want to run the clock trug trying to make the 芒 ‘ 卢 Uro fail.
It is well regarded with the Euro.A gigantic economic value-creating money machine has emerged, the proceeds of which are democratically distributed.
For the joke, look at the trends in the gross national product of each Member State since becoming a member of that state.
Every (group of) citizens are better off with it, and companies get better returns through larger scale, larger home market.