A look at why the value of the Euro is relatively strong despite the serious economic problems that the Eurozone faces. Readers Question: We keep getting told we face an imminent crisis. The Euro will fail, recession looms yet the stock markets soar after a sticking plaster is attached and the Euro remains high on …
Readers Question: Every country’s economy has their own dynamics. Competitiveness is more or less adjusted by appreciation and depreciation of individual currencies in free economies. Then why is EU pressurizing Greece to stay in Eurozone? Except borrowings at a cheap interest rate, what are other real advantages of Euro? There are a few advantages to …
Readers Question: If the markets decide the UK is not such a safe haven and bond yields rise will pension funds heavily weighted in Gilts tend to fall? Yes. If investors feel that the UK is not a safe haven (they feel increased risk of UK government default). Then investors will sell UK bonds, this …
Readers Question: What on Earth is the point of the Eurozone borrowing money from China when the ECB can print any amount of money it wants any time? Of course the effect of the ECB printing money donating it to indebted Euro countries and/or the banks holding those countries’ bonds is likely to be inflationary …
Readers Comment on UK National Debt – What we are doing now is not dissimilar to Roy Jenkins’ cuts in the late 60′s he brought us out of an £800m deficit into a £387m surplus, toughen up and let the economy settle. There are several examples of where governments have been able to transform public …
A joke – Three guys walk into a bakery; an investment banker, a government employee, and a tea partier. The lady behind the counter puts out a dozen cookies. The investment banker pockets 11 and tells the tea partier the damn government worker is trying to steal his cookie. There was a time when bank …
Readers Question: I am wondering why the 75 billion of quantitative easing that the Bank of England announced today to be “injected into the economy” isn’t spent on infrastructural projects? Why spend those funds on government bonds? This doesn’t seem to be the best way of using these funds. Many thanks. It’s a good question. …
Readers Question on the Euro – How would Euro be affected if the UK had been a member? Before the credit crisis and economic recession, I felt the Euro would be damaging to the UK economy. To summarise this was because: Lack of Independent monetary policy, e.g. interest rates set by the ECB may not …