I'm game.
...heightening fears that France is buckling under the strain of the super-strong euro.
Ridiculous exaggeration.
The monthly trade deficit ballooned to $2.7bn, following two months of sliding industrial orders and a shock halt to economic growth in the third quarter. Car output is down 14pc so far this year.
Anyone want to buy a Fiat or a Renault?
French trade minister Christine Lagarde blamed the grim trade figures on the tight policies of the European Central Bank, which has raised interest rates six times in a year to 3.5pc.
3.5 is 175 basis points below the US. For Europe, what's important is the rate differential, not the absolute level. I suspect the two rates should be in parity, else, Europe will tend to inflate, but not much.
The rate rises are the key factor pushing up the euro.
Everybody says this but it jes ain't true. It's true from the currency trader's perspective where the trader plays how others presumably will react to all these silly economic theory myths. They cause what they expect, but they can cause fluctuations because there's no true material force moving these entities in one way or the other. That's why in the recent era nothing ever comes from "crashing dollar", "soaring rates", etc. If there really were material forces afoot, none of these silly myths would make sense.
"We sold one less Airbus, we haven't sold any satellites, and we have not sold any ships. Frankly, the battle against inflation has been won. It's high time the ECB began thinking about growth," she said.
This broad knows squat zero. Europe hasn't fought any battle against inflation although they will in the fullness of time. Further, lower interest rates don't promote growth. They promote higher prices. Non-inflationary growth comes from incentives to produce, to create, to accomplish. Free money doesn't cause any of that. It causs the opposite. However, her view is the harbinger of price increases seen in the fullness of time.
Her comments came as French leaders of all stripes stepped up attacks on the bank, accusing it of "monetary masochism". The euro has risen 11pc against the US dollar and most Asian currencies this year, and 20pc against the Japanese yen.
French premier Dominique de Villepin called on EU states this week to reassert national control over their economies and set proper limits on the powers of the ECB. "We must clarify matters in exchange rate policy, which means taking back our sovereignty."
Between these socialists and the 'crats one can see why the world's institutions are moving into gold.
Mr de Villepin was alluding to a clause in the Maastricht Treaty (111-4) giving EU ministers power over the currency. It is a tool that could - in effect - enable politicians to set interest rates, stripping the ECB of its independence. "This is a tough fight that we are going to have to carry out at a political level," he said.
This is the major reason why FED doesn't want the free market to determine interest rates. They think a free market would cause rates to wildly gyrate and that would get Congress to usurp FED's authority. Better to have FED ruin the economy rather than politicans, they reason. At least then gold wouldn't become empowered. Gold is anti authority.
Ségolène Royal, socialist candidate for the presidential elections in May, went even further, accusing the ECB's president Jean-Claude Trichet of usurping democratic authority.
Oh, democracy is such a great invention. See Athens. Nothing like the unruly mob to bring about the re-invention of the Divine Right of Kings. Isn't it interesting how 'crats always accuse others for what they do.
"It's not for Mr Trichet to dictate the future of our economies: it's a matter for our leaders chosen by the people. We must completely change the charter of the central bank," she said.
That's worth a $50 rise in gold.
Italy has lost 40pc in competitiveness against Germany since the exchange rates were fixed ten years ago, while France last lost over 20pc - yet they still have to compete in the same currency zone.
The thing that finally scuttles the euro and its union is nationalism that comes about by inflation, by differing national inflation rates.
Germany is re-emerging as a Teutonic Tiger with exploding exports to China, Eastern Europe, and the Middle East, while Europe's 'Club Med' bloc are steadily losing share of world markets.
Derek Scott, Tony Blair's former economic adviser, said the euro system was becoming unworkable as the one-size-fits-all monetary policy drove countries further apart.
"The ECB faces an impossible task because there is no such thing as Euroland: there are groups of countries going different ways," he said.
"Germany has clawed back competitivenes by squeezing its economy, but Italy, France, Spain and others have been enjoying property booms. Boom goes bust," he said.
When these more socialist nations tell Germany to get back to indolence, Germany will break out and re-establish the Bundesbanc and the mark. Deutschland uber alles!
"In the end, the ECB may to have to respond to the needs of the weakest economies, or monetary union will fall apart," he said.
I read their weak minds. I must be clairvoyant.
Philippe de Villiers, leader of the eurosceptic MPF movement, said he was launching a referendum drive for a return to the franc. "The euro is a failure. It's weakening our industry and our exports to the point where Airbus is preparing to build plant directly in the United States and China," he said.
You may throw money now.
"As we saw with the Czech and Slovak currency split, leaving the euro is technically quite simple. We could do it in eight days," he said.
The Bundesbanc already has the new marks printed. |
