Some interesting currency moves today

[Brah]

A friend of mine made a killing on the AUD when he was living in Japan, not sure how many years ago that was. I don't think I have the guts for FX trading but I am rather exposed in one currency in a not very good way.

[Wd40]

Pretty scary article about the Yen.

http://www.bloombergview.com/articles/2 ... is-falling" onclick="window.open(this.href);return false;

For such an advanced economy, Japan takes an almost developing-nation view of exchange rates. Remember that Washington's strong-dollar policy, the brainchild of then-Treasury Secretary Robert Rubin, began in 1995 just as deflation was wrapping its tentacles around Japan. Nearly 20 years on, Japan still favors the quick-and-easy fix afforded by a falling currency. Its competitiveness has only suffered

[Wd40]

Euro has just broken the 1.2 level and fallen to a nine year low.
Aussie Dollar too looks like it will break 0.8 soon.

[JR8]

The euro-zone economy is bollocked, + the ECBs masterplan is to print loads more euros to try and stimulate growth => their currency going down the pan.

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'A Financial Times survey of economists has uncovered scepticism surrounding a potential quantitative easing (QE) programme by the European Central Bank. Most economists questioned by the paper said they expected growth and inflation to remain weak even with QE.'
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So, once again, the euro is in the mire, and the market perceives the EU/ECB have no realistic plan, or in this case, absolutely no plan of any kind, to navigate a way out of it.

It is as pathetic to observe as it is painful.

[Brah]

How about Merkel's move with Greece to let them go back to the Drachma?

[JR8]

How about Merkel's move with Greece to let them go back to the Drachma?

Truly weird, and I don't know what to make of it.

The original plan was no one can ever, ever, EVER leave, what ever the cost (and risk of contagion).

Now they're apparently welcoming Greece to the exit door. I can only imagine that once through it, that Germany will go out to completely destroy them, to demonstrate to other doubters the error of Greek ways.

Interesting times!

[aster]

I think this is a warning sign to Greece to keep its ship going at its current heading.

Greece completely flopped when it came to financial responsibility and needed others to step in, sort it out, and sent it sailing in the right direction again. Now if they decide to do things their own way again then they need to be shown the door once and for all.

[JR8]

Greece completely flopped when it came to financial responsibility and needed others to step in, sort it out, and sent it sailing in the right direction again.

Greece was doing just fine before Germany forced it to join the euro.

You think Greece wanted this chaos? No, it was Franco-German empire building that knew no logical bounds.

Same say they'll be welcoming in Turkey next. Oh yes, at least 5 times larger than Greece... just watch them bend all the rules in this dick-waving contest vs the US. Then if Turkey wanes, observe them being crushed under the Teutonic jack-boot....

[Strong Eagle]

Greece should exit the Euro. Then, it immediately devalues its currency to make its labor rates competitive because nominal wages automatically lower instead of having to actually cut wage rates under the Euro.

Greece's primary export industry is tourism... a cheaper drachma would quickly increase tourism and return Greece to a more robust economy. A cheaper drachma would increase investment.

[Wd40]

Poor German savers:
http://www.bloomberg.com/news/2015-01-0 ... stion.html" onclick="window.open(this.href);return false;

[aster]

Greece was doing just fine before Germany forced it to join the euro.

You think Greece wanted this chaos? No, it was Franco-German empire building that knew no logical bounds.

Greece is wholly responsible for its own mess. 100%. Not even 0.000001% can be attributed to anyone else.

They simply took advantage of the situation to lend money at extreme levels (the Euro simply gave them more possibilities) just so that they could evade reality and continue their national tradition of evading... WORK itself. Heck, let the Germans pay for their pensions and other woes, right?

What's worse is that this was something they planned on all along. They even forged & falsified economic data just to get into the Euro club, knowing that this would open huge opportunities for them in terms of low-cost, effective financing. Normally this is a great thing, but in their case it was merely a gateway to "steal" yet more funds by just burying themselves in debt...

Greece is Greece. 100% to blame for everything that has happened over there.

[Strong Eagle]

Greece was doing just fine before Germany forced it to join the euro.

You think Greece wanted this chaos? No, it was Franco-German empire building that knew no logical bounds.

Greece is wholly responsible for its own mess. 100%. Not even 0.000001% can be attributed to anyone else.

They simply took advantage of the situation to lend money at extreme levels (the Euro simply gave them more possibilities) just so that they could evade reality and continue their national tradition of evading... WORK itself. Heck, let the Germans pay for their pensions and other woes, right?

What's worse is that this was something they planned on all along. They even forged & falsified economic data just to get into the Euro club, knowing that this would open huge opportunities for them in terms of low-cost, effective financing. Normally this is a great thing, but in their case it was merely a gateway to "steal" yet more funds by just burying themselves in debt...

Greece is Greece. 100% to blame for everything that has happened over there.

If Greece had stayed out of the Euro, none of this would have happened. Greece may have corruption, overspending, and such, but you cannot get away from the fact that Euro investors walked in with eyes wide open. Their investment activities drove inflation and price increases. Then the bubble burst. Until Greece exits the Euro, they are not going to be able to undo the effects of this burst bubble.

Krugman has a good take on Greece. http://www.nytimes.com/2012/06/18/opini ... ictim.html" onclick="window.open(this.href);return false;. Makes a lot more sense than simply blaming the Greeks for everything.

[aster]

At the end of the day it was cheap financing that caused any of this.

Greece gained access to it by joining the Euro. Suddenly they were legitimate and could borrow cheaply. Which was their intention all along...

There is nothing inherently wrong about the Euro itself, in fact it is a great idea for Europe, for trade itself, stability, etc.

[Strong Eagle]

There is nothing inherently wrong about the Euro itself, in fact it is a great idea for Europe, for trade itself, stability, etc.

There are many things inherently wrong with the Euro, and what you see in Spain, Italy, and other weaker economies in the EU is one glaring example of the Euro's failings. Unlike the US, where regional recessions are smoothed over by the influx of federal dollars, no such mechanism exists in the EU scheme. Instead, a combination of loans and austerity measures is the supposed remedy for economies in trouble, and as we have seen, such policies have done little except cause the common man a great deal of pain.

[JR8]

France and Germany seem to imagine that every other EU country wants to be just like them. It is a form of immeasurable cultural and political arrogance.

The problem goes back to the roots of how the EU was created, which was knowingly based upon a lie. It was touted to the people as purely and simply a trade bloc, when the plan all along was for it to be a unified political block, a federal super-state to rival 'those too big for their boots 'Mericans'' who ironically had just helped save Europe from totalitarianism in WW2.

So if an EU member state struggles, Berlin sends down a doctor to provide not therapy and direct support, but rather an extremely large dose of potentially deadly and foul-tasting medicine. Via this approach they have left the 'PIIGS' economically on self-funded life-support, with no clear avenues for bringing them to, never back to rude health. What a towering achievement eh? No, more like a suppurating wound that will never heal.

As I understand it Greece did somewhat spice their books/accounts prior to being admitted to the euro. But come on it's Greece, what in G*ds name did people expect lol?! Everyone knew this was going on, the EU carried out multiple pre-acession audits but it was overlooked, presumably as they were deemed to be on the right trajectory towards to becoming almost German in their fiscal behaviour, oh yes hehe...

Perhaps now would be a good time to mention future accession countries. How about Turkey? More populous than even Germany. Geographically 97% in Asia (oh yes, despite most Europeans considering it a European country). Arguably even more of a Mediterranean type economy and culture than Greece. Surely the EU wouldn't want them to join, would they; look at what happened to Greece?! But they do. You have to give the EU credit though, they won't just accept absolutely anyone. They did reject an application from Morocco, so presumably the Moroccans thought they were in with a decent chance to join this 'club for all'. But then again, being 100% in Africa would be pretty hard to justify, even for the politicos in Brussels and Berlin.

Ponder why it is the basket cases from the continent of Europe that are clamouring to join the EU, Albania, Bosnia, Turkey etc., and meanwhile the wealthiest and arguably socially most successful countries continue to decline to do so, Norway, Switzerland, etc.