Euro/Pound dive against the Yen

[Kasz216]

kowenicki said:

NJ5 said:

kowenicki said:
Dont worry, the Yen will have to be devalued soon, it has to unless Japan want to utterly screw themselves. They have to do something soon, Japans tax take this year wont even meat their own debt payments. They are effectively bankrupt too.

On Europe... expect Portugal, Spain and Italy to follow Greece soon.

It was sooooo obvious that a common monetary policy and common currency couldnt work for such different economies... especially economies propped up by inflows of european cash.

In some way I think it is a good thing. Eurozone countries are being pressured to stop running big deficits, while countries like the US and UK just print their way out of the problem with little pressure to really fix the deficits.

While the latter is more politically acceptable, it has already resulted in a big loss of purchasing power for British people, at least for imported stuff. Sure, it helps exporters, but the UK is not an export economy right?

 

Actually that is a bit of a myth, the UK does export quite a bit.  But yeah it isnt a huge export economy.

Im not sure European countries are being pressured into not running huge deficits... well... actaully clearly they arent.  As the PIGS economies (as ecomonmist call them) show.  PIGS being a rather derogatory acronym used by economists for Portugal, Italy (sometimes Ireland), Greece and Spain.

These countries have thus far spent like crazy knowing the net inflow of cash would prop them up, hence the myth that was the Celtic Tiger (Ireland)... entirely built on free money from the EU -  the definition of boom and bust.  As soon as this EU cash slowed or there was a real downturn it all fell to pieces. 

Go to Spain and Portugal, look at the nice new airports, roads and civic buildings... how can these countries afford this?  Simple fact is they cant.  It is built on European money.  I'm pretty sure there will be a few German and French wishing they had kept their own currency and control right now.  They are the ones who may well need to prop up Greece and others to ensure they are not knocked of course in their own recoveries.

 

Yep, UK is actually around 9th when it comes to exports in the world...

Although it's 6th in the world when it comes to imports... so I wonder if it really helps or hurts.