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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: regli who wrote (48887)	3/29/2006 6:09:42 PM
From: mishedlo	Read Replies (3) \| Respond to of 116555

Here is what Heinz had to say in his first ever response to one of my blogs well, the Euro is forcing reform on the members of the Euro area, whether they like it or not. Italy will have to face this fact sooner or later. Mish has it exactly right - the author is barking up the wrong tree (and very likely for ideological reasons). the fact that the escape haych of so-called 'competitive devaluations' (the poorest of all possible policy choices when a country is faced with problems such as Italy's) is not there anymore should be welcomed, not criticized. the Euro has boosted inter-European trade enormously, and for all its flaws, has clearly enhanced competition. including new members from the former Eastern Bloc is a splendid idea - their economies generally grow faster than those of the existing Euro-area, and some have exemplary fiscal policies in place (look at e.g. Slovenia and Slovakia). the Euro will likely profit from including them - and citizens of the current Euro area can likely look forward to a period of accelerating economic reforms, as established industrial nations will be forced to adapt to the more competitive landscape. as an aside, New Mexico and New York both use the dollar. i have yet to hear anyone complain that their 'disparate economies' are somehow an obstacle to that and New Mexico suffers because it can't devalue. pater tenebrarum \| 03.29.06 - 5:06 pm \| #