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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: John Pitera who wrote (2521)	8/28/2000 12:27:22 PM
From: Archie Meeties	Read Replies (1) of 3536

But Process will Take Years Seems right, Europe is facing some stiff beurocratic headwind. But the euro doesn't have years. If it doesn't get off the mat soon, Europe is going to have to rethink this whole reunification idea. Here's an interesting stat about economic dependency on oil. "The US economy is indeed much more energy-hungry than Europe: it needs the equivalent of 330 tonnes of oil to generate 1m of gross domestic product, compared with 190 tonnes in France and Germany and 140 tonnes in Europe. Furthermore, taxes on fuel in the US are minimal relative to those in most European countries. Rising crude oil prices translate more directly into higher consumer prices." On the surface, you'd think that rising oil prices would shift be bullish for the euro, and bearish for the usd. Not so. And especially not so if the euro gets whacked and the dollar rallies before the full inflationary effects of oil are felt in the us (in refined products, like HO this winter). I notice the JOC-ERCI inflation rate is now really slowing - dollar bullishness goes a Long way to erase the inflationary costs of raw materials.

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