Euro Confusion

I have attached a link to a very short and interesting article that highlights the real problem of the Eurodollar and the common currency. Pease take time to read it because it goes to the heart of the problem – (that is) Euro countries that are uncompetitive with Germany but unwilling to increase productivity and unable to devalue their currency to achieve this.


http://www.davidmcwilliams.ie/2012/06/19/hard-and-soft-options

I find this whole situation quite amazing in the sense that the problems are obvious, as are the solutions, yet there is no political will to implement them.

Just to confuse you more, I thought I would stretch the limits of your mind to remind you all of the Bretton Woods currency system implemented after World War 2. If you read this attached Wikipedia article, you will note that the system was implemented to PREVENT COUNTRIES FROM DEVALUING THEIR CURRENCIES TO INCREASE COMPETITIVENESS!!! (Can your bear it?)

Just as a refresher, the Bretton Woods currency system linked many world currencies to the US Dollar and the US Dollar was exchangeable for gold – so effectively a peg – much like the Eurodollar (although you were able to keep your own currency – the Lira, the Aussie, so on and so forth).

http://en.wikipedia.org/wiki/Bretton_Woods_system

Anyway, the Bretton Woods currency system collapsed in the early seventies. Gosh! That would have been an economic catastrophe...surely...what – you don’t remember? Shame on you, how quickly we forget.

Have a good week.