<<``I have not seen any certain influence of the Irish 'no' on the exchange rate. The
underlying factor for the exchange rate development is the outflow of capital from the
euro area to the United States,'' Welteke said.>>
Maybe the Euro area is a bigger factor than we appreciate. I read a magazine article in Germany recently that set out an interesting theory why the dollar keeps flying
when, given the slowing economy and Greenspan's printing press, it should be weakening. We all know Europe is full of stuffed mattresses--many of them sleep on wrinkled currency at night, never mind those transaction-reporting banks. Well, with the advent of the Euro, all that mattress stuffing in Euroland must be turned in to a bank, for new Euros, not later than March 31, 2002 (after that date the old currency can only be turned in at a (gasp) Central Bank office; otherwise the money's worthless). How impolitely public dragging the old mattress into a bank would be, no? Can't have that.
The logical strategy is to take those _uncountable_ francs, marks, lira, and guilders to an exchange service, and quietly and anonymously sell them for US dollars. Back into the mattress they go, and in the process all that unaccounted-for dollar buying helps prop up the greenback.
I suspect that the air in the dollar's has many causes, but mattress money was not something I had ever considered before. If it is in fact having an effect, that should be over by March 31 of next year, since exchange services and merchants cannot accept the european national currencies after that date.
John. |
