"Drachma to weaken if it exits the Euro" - huh?

zorbas

Established member
606 0
Yes, and generally the the exchange rate evolves in step which could not happen in the eurozone. All states in the USA are not equal in terms of economic development but they all operate under the umbrella of federal economic policy which prevents a chasm getting too deep. In the absence of central eurozone control of economic policy the attempt was made to have something similar by creating rules. Everyone just broke them, though, not the least Greece who even broke them on the way in by some deft accountancy.

It is correct what you say regarding the role of the fed. However the chasm has been huge, this is why one can say that the population and economic activity have concentraded in basically 3-4 states.

In Europe, due to the multi nation and multi-culture that exists, hasn't and cannot happen the same, hence the most visible chasm, that finally will force everybody to adapt to his part of the cake and abide by the rules.
 

zorbas

Established member
606 0
Let's put it this way......I certainly ain't going to buy the D against anything !

N

The conspiracy against the E is almost over. Not the market forces and the power of QE will show the direction of the D
 

BeginnerJoe

Senior member
3,329 350
Let's put it this way......I certainly ain't going to buy the D against anything !

N

Perhaps you aught to. To dump it, they need to pump it first to catch all the noobie fishes in a barrel. It's free monies, like using an ATM.
 

scose-no-doubt

Veteren member
4,630 954
They'll print all the drachmas they need in order to meet their non defaulted euro denominated debt. What effect do you think that will have on FX crosses?

Also my laymans economic scenario is that re-introducing the Drachma will be highly inflationary to the Greek economy as prices arre re-matched and salares re-negotiated etc. Considering everyone's zirp and greeks cant cut rates below the euro then if they do see inflation wouldn't that effect the FX cross through real rates differentials?
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock