To: elfman2
Intuitively, I'd think that the currency price would be more directly related to that nation's economic prospects and currency risk.
What it should reflect is the differance in each country's inflation. The inflation in Europe is higher so the Euro's value should go up. In the long run this is good for the U.S., as the dollar goes lower our exports get cheaper and theirs get expensive meaning more of our exports are sold and less imports are sold here.
To: ItsTheMediaStupid
"What it should reflect is the differance in each country's inflation. " Thanks, that makes more sense.
12 posted on
05/19/2003 5:34:14 AM PDT by
elfman2
To: ItsTheMediaStupid
"Euro-flation" is the ugly and dirty secret of the EU. There is real man-on-the-street inflation. People can't afford the new euro prices. Everything is being rounded UP to the nearest Euro. (euros also have cents just like the $$ btw). Some countries to combat this have ordered labeling to specify euros and cents so merchants rounded UP again to the higher whole euro. There are propaganda commercials funded by the EU which say "really prices have gone down."
This inflation is to be expected but I believe there was a rush to adopt the euro before synchronizing the currencies. This was intentional to force the poorer members to borrow more from the central bank and make it harder to bail.
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