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

To: Lazarus who wrote (111718)	5/17/2010 8:06:13 PM
From: roguedolphin	2 Recommendations Respond to of 116555

<<"Its not free enterprise that makes a country great. Truth, justice, righteousness, and mercy will make a country great.">> Where do you want to start???

To: Lazarus who wrote (111718)	5/18/2010 7:14:41 AM
From: Haim R. Branisteanu	Respond to of 116555

Falling euro is a luxury Europe can afford - (but Obama can not - his party control of the congress in the coming election hinges on new jobs - low EUR strong USD = less jobs in the US) By Paul Betts Published: May 17 2010 19:40 \| Last updated: May 17 2010 19:40 The euro is probably still overvalued against the US dollar. For most eurozone exporters the problem is not so much how much lower the euro will go but the risk it could climb back from its current level of $1.23 to $1.30 or more. The Club Med debt crisis and its collateral impact on the European currency has sent equity markets spinning not only in Europe but across the Atlantic, in emerging Asian economies and Japan. There are obvious reasons for this. For the Europeans, a weaker currency may help exporters of goods and services, but it is also a sign of a weak economy. For those attached to the dollar – as well as Japan for that matter – a rising dollar and a strong yen makes their own exporting champions less competitive. On balance, there are more positives than negatives for corporate Europe and its debt-laden governments from a sliding currency. In turn, there are more negatives for its dollar and yen competitors. In the case of governments, the Organisation for Economic Co-operation and Development argues that a 10 per cent fall in the euro translates to 1 per cent additional growth for Europe over a 12-month period – at a relatively modest cost of a little more inflation of about 0.5 per cent to 1 per cent. To achieve parity in the purchasing power of Europeans and their US counterparts, the euro needs to trade at about $1.10, not only according to the OECD but also to the IMF and Eurostat. A lower currency would also help bring down European government debt ratios. Some would argue it could do so more quickly than the implementation of the various austerity packages European governments are planning to reduce their structural deficits. ft.com