Voidwar

The Demise of the Euro
Avi Tiomkin 04.21.08

The Demise of the Euro - Forbes.com

Is the Euro going to pop louder than the dot com bubble ?

aegyptos

That's a very interesting article. So will the much spurned dollar rebound when the Euro explodes or has our day also passed?

galenrox

If it was true you have no idea how much I'd lord it over Kelzie. I predicted the collapse of the Euro back in 2005 and she's made it a point to remind me of it (and that it hasn't come true yet) on several occasions, man that would be sweet.

As I see it, there are two ways this can go. Either we will see increased political regionalization or we'll see the collapse of the Euro and the European Union. Barring a MAJOR economic shock (i.e. the collapse of the dollar) I'd expect it to be the former of the two.

There has to be some currency with which wealth can be held. Wealth exists, it will be expressed in some monetary form. The dollar will definitely make up some ground on the euro eventually, but I'd be surprised if they actually withdrew from the Euro. The Euro as a currency is one thing, but the political advantages of the European Union have been undeniable for member states, both in the gains by combining their efforts but also in the benefit of avoiding the wars that tore Europe apart for centuries. I see definite motive for them to withdraw, but I'd be very surprised.

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PeteEU

Interesting article. Just a few issues with his analysis.

First off Italy. Italy has been the "sick boy" of the EU from BEFORE the Euro was put in place. Italy's problems are homegrown structural and political problems and have very little to do with the Euro. I am not saying that the Euro is not a contributing factor, but the main issue are home grown. And even if Silvio Berlusconi wins, he wount have a majority and will have to rely on smaller parties. This means AGAIN a hung parliment, which most likely means the Italians will be going to the polls again very soon. Of course the Italian politicans will blame the Euro for thier own lack of political will, but regardless of that, i doubt very much that the will leave the Euro.. simply because the Lira was less worth than toilet paper.

Secondly Spain. The housing slump in Spain has many aspects too it. First off the global credit cruch, stemming from the US subprime crisis, has hit the industry hard. Secondly years of over production has basicly flooded the market with buildings, but because the non spanish love the country, they have been willing to buy houses and flats hence driving up the prices. Now because of the credit crunch, non spanish have stopped buying in the same numbers as before, which has resulted in driving down house prices.. and frankly that is something the Spanish goverment secretly have wanted. Why? In Spain it is almost a normal thing that children live at home till thier mid 30s if not longer, because they simply can not afford thier own place in the major cities due to the high prices. Also what the writer also forgets to mention is that inflation in Spain is also a hot topic and a serious issue. Having bread and milk prices go up by 4+% a year has been noticed by many.

Frankly all I read in this article is a typical right wing anti European hit piece.

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PeteEU

GarzaUK

Trust me if the Euro was in demise the right-wing newspapers in the UK would be all over it, milking for what its worth. Funny enough the media have been silent about the euro for the last few years.

I'm no economist, but I see the Euro beating the pound and dollars ***. Countries are considering changing their finicial reserves from dollars to euros.

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bub

no one in Europe is talking about abandonning the Euro!

On the contrary, with a very strong € and a particularly weak $, oil isn't very expensive. If we came back toour former currencies we would have to pay much more for that.

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Arcana XV

I agree with all of the above fellow Europeans. There is no serious talk about abandoning the Euro.

Now, I understand that the author is a very respected financial analyst, but I think he's being a little melodramatic in his conclusions. He does bring up some good points, but his predictions are completely off IMO.

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PeteEU

I have found nothing to validate that this guy is a respected finacial analyst. In fact there are a number of "red flags" that start poping up when you google him, that other than his "biased and flawed" analysis, really draws his credibility into doubt.

Arcana XV

Well, he's done pretty well for himself regardless of the few misteps here and there. From what I gathered, when he talks people listen. There's usually a reason for that. And also Forbes is not just some random rag, I don't think they would have printed the opinion of just any loser out there.

mikhail

Ive heard no real talk of this.I think some economists act like psycics as in they make predictions in the hope when one hits they go "see everyone missed this coming but me"

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