Currents of Currency Message Board

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Strategies & Market Trends : Currents of Currency

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From: Ahda	6/5/2014 11:55:24 AM
	of 594

Unemployment is high in both Spain and Greece. Italy and France have very slow growth if any so drop the rates to fix the problem. Small other problem mainly Euro requirement drop the Euro fix that too. However if you drop the Euro you slash more jobs. Deflation is caused by surplus goods and you have to offer them at a very low price to get rid of them . Pretty hard to have product deflation when you production is based on Just In Time figures and economic conditions. When companies project a down turn you they go into decreased cost and production mode and hiring turns to firing. You do not make a 10000 bird baths when you know you will only sell 2. Ducks must walk in your back yard they can not wade. Deflation becomes currency deflation which you are trying to avoid. You drop rates anticipating the cheap cost of currency will aid business development. Fine line in here of how much contraction it will take before your currency feeding becomes inflation. Currency ease usually increases the financial business sector but does not always increase the people product end. Poor people pay more for finance and poor countries increase the interest of their bond rate. Both poor people and countries pay more for you to invest in them. If you live in Italy you covert you lira to euro which you use to buy in the euro zone however you can do exactly the same thing if you convert your lira to the currency of the country you are purchasing your goods with. Euro banks on their way to trouble. What does it all mean simply put the deterioration of the Euro means less buying power than was decrease in euro exchange is an increase in price paid for good in another currency. Off set zip interest almost so you borrow in Euro invest in down trodden rupee and open a business in India. I do not know what good that is going to do the around 25 % unemployment in Spain. Be careful with the Euro

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