[Info-vax] HP stopping VMS paper documentation ?

[AEF]

On Nov 30, 12:23 am, JF Mezei <jfmezei.spam... at vaxination.ca> wrote:
> AEF wrote:
> > Being on the Euro makes it impossible for a country to use monetary
> > policy to fix things. And one country's problems makes things worse
> > for others, resulting in domino spiraling.
>
> Canada experienced a similar problem one or two recessions ago. Ontario
> was hurting badly, Québec was neutral, and western provinces were doing
> well. The Central bank didn't quite know what to do. Lowering interest
> rates to help Ontario might create inflation due to the west doing well.
> Raising interest rates to control inflation would hurt Ontario.
>
> I think we are seeing ta similar problem in Europe where Germany is
> doing well, but other countries are really hurting.
>
> If all of Europe were doing bad, then the Euro mechanisms would work.
> But because the central banker has to cater to very different economic
> situations between Germany/France and the PIGS, it is very hard to do
> anything that will help one without hurting the other.
>
> For as must as people are saying the Euro is doomed, it still trades at
> $1.33 USD, so the currency is far frm being declared "weak".
>
> > The Euro makes a bad
> > problem much worse. If countries had stayed with their own currencies,
> > we wouldn't have a Euro crisis. Etc.
>
> The USA doesn't see this problem because its currency is a "standard".
>
> But consider if Greece had borrowed from american banks in USD. Say its
> monthly payment is USD $1000. Whenever the greek currency drops in value
> against the USD, it means that USD$1000 will cost the greek government
> much more in its local currency. And that means either higher taxes and
> increased debt or bankrupcy.
>
> So when a countrty has foreign held debts, lowering the currency to help
> eports is very dangerous because it also increases the debt payments the
> country needs to make.
>
> By being in the Euro, Greece has access to Euro-denominated lenders so
> its monthly payments are not affected by movement of the european currency.
>
> So having your own currency and being able to devalue it doesn't always
> work.

I can't comment on the soundness of your arguments, but I think I can
say that not being able to devalue your own currency never works.

AEF