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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end?
YHOO 52.580.0%Jun 26 5:00 PM EST
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To: Dale Baker who wrote (3065)9/20/2000 3:24:02 AM
From: RockyBalboa   of 3543
 
I believe (and that is the view of many economists), adding to the volatility in EUR is the fact that once super-weak currencies of many European countries have been averaged into a basket plain and simple, but with a mostly inadequate momey market yield (if you consider that the average interest rates for soft currencies was on average 1.5 over the USD and 3 to 5 over the DEM rates).

Currencies like ITL, PTE, ESP, and the Irish pound have been historically weak (with the Lira devaluing about 75% over a course of 20 years). After the big bang 1994 however, a strange sort of "moratorium" has been introduced, and currencies like Pesetas and Lira gained as much as 30, 40% from the previously set lows, together with some relaxation on the money side.

However, the disturbing strength in DEM and partly French franc in the early 90s in fact hurt European economies for some years and then, currencies like the Lira entered the Euro at a likewise high exchange rate.

Sure is that momentum (downward) has been adding to the drop since.

It is no surprise that even the Swiss Franc (which was dull for years and a good currency for lending) has been squeezed recently, also hitting a decade high...
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