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Among its many other sins, the greenback is a press hog. The world’s reserve currency, loved and loathed as it is, simply gets most of the ink these days.
In that light many a U.S.-based commentator, not least your cynical Taipan Daily scribes, have repeatedly waxed eloquent on the long-run death of the dollar But in our zeal we sometimes forget that, in order for the dollar to die, it has to die relative to other fiat currency offerings... and some of those others are looking pretty sick too.
In short, the dollar is not the only basket case out there. Take the euro, for example. Now there’s a troubled currency if ever one existed.
On top of that, various bits of Europe are in the process of blowing up... or falling apart... or both. There is deep trouble brewing in multiple corners of the continent. Let’s take a quick look on a country-by-country basis to see why Europe is being held together with duct tape.
We’ll start with Britain - not an adopter of the euro, but a member of the EU (European Union) nonetheless.
Britain has been hurled into political chaos, thanks to an unholy combo of deep financial crisis, explosive Labour Party scandals, and the hapless lame-duck status of embattled Prime Minister Gordon Brown. Cabinet Ministers are resigning left and right in protest as Brown’s popularity plummets, calling for the PM to step down. Election results tallied this week showed the Labour Party (Brown’s party) putting in its worst showing since 1918.
Elsewhere in Europe, Latvia, a tiny country of 2.2 million, threatens to unleash havoc on the entire continent.
Latvia’s currency, appropriately known as the lat, is officially pegged to the euro. Latvia set up the currency peg to speed up official entry into the EU. But now the fiscal discipline of maintaining the peg is crushing the Latvian economy.
As the global financial crisis has unfolded, Angela Merkel, the Chancellor of Germany, has been looked on with increasing amounts of admiration and horror, depending on the observer’s vantage point.
Those who admire Merkel do so because Germany has appeared to completely go its own way in the midst of turmoil. As other countries have stimulated and relaxed and eased to fight the fires of slowdown, Germany has said “Nein!” to anything that smacks of lax fiscal policy.
Last but not least, a surprising new trend has arisen from the EU-wide elections held in the past few days.
“Conservatives raced toward victory in some of Europe's largest economies Sunday,” the Associated Press reports, “as initial results and exit polls showed voters punishing left-leaning parties in European parliament elections in France, Germany and elsewhere.”
There are still other problems in Europe we haven’t really touched on, like the Spanish real estate markets headed for freefall, the dire state of the Irish economy (joke du jour on the Emerald Isle: What’s the difference between Ireland and Iceland? The letter ‘C’) and the toxic leverage still lurking in European banks.
Put all this together, and what you get is a truly poisonous stew. Half of Europe is still committed to fiscal stimulus and economic coordination... while the other half has swung inward and hard right, towards a nationalist and isolationist stance, at a time when exports are weak and the whole continent is in trouble.
Originally posted by AReptileFeeder
lol i honestly can say the european union is a joke
what's it even mean?
are they all different color power rangers? blue ranger is france, yellow ranger brittain?
what does the european "union" even do?
send us 50 troops? give us like 200 troops in Iraq? they don't help us at all they're not real og's.
Originally posted by wonderworld
The EU economy is crutial to the global financial stability. There was a time not long ago that many counties bagged the dollar in favor of the Euro.
Arab confederacies were tossing around the idea of a petro-Euro.
There have been some in the US that will only be paid in Euro's but they may have second thoughts.
Originally posted by wonderworld
reply to post by Hastobemoretolife
The IMF said it’s possible to take the “revolutionary” step of creating a new global reserve currency to replace the dollar over time.
The IMF’s so-called special drawing rights could be used as the basis for a new currency.
These SDR’s may soon be the new reserve for the Euro, as well.