Re: RE:Re: RE:what is going on???

[ALI KADRI <akadri_00@xxxxxxxxx>]

YES THAT IS VERY MUCH Wim D but the french have their
man coming up at the helm and this may mean something
else, well recall that something like a power sharing
agreement occured at the beginning. also recall that
the world bank and the imf have been calling for a
rate cut in europe. i dunno either but i tend to think
that this fiscal vs monetary policy debate is not so
relevant after all. in either case the policy matters
depending on where the money goes to. in the european
case a rate cut is not as effective on the demand side
as is the case in the states. it is also true that the
europeans have been linient on the percentage allowed
for deficit building when the recession loomed. so
they would rather tamper with spending and not with
money. now all in all inflation has been extremely low
in the ec. therefore, the idea that the worry about
the initial stages of the launch of the euro are for
them justified seem to make sense. what is also really
strange is that there is a lot fraud, drugs, and other
bad money that is going to be substituted for good new
euros. it seems that the euro may be a laundry man
dream come true. if that is the case then there may be
just more euros coming to roost than anticipated.
(many marks lurk in turkey and other euro mafia
places). also there is the very cost of introducing
the euro. some estimates put that at higher than one
per cent. anyways that is going to be high.
this euro is not an easy project but its complexity
should begin as you said when it sits pretty along
side the dollar. that i think calls for dirty politics
on this continent.
--- jdevine@xxxxxxx wrote:
> I think it is Ali who wrote: >in any case Wim D is
> bracing for the forthcoming transition where it is
> likely that a lot of bad money is going to be
> transformed into euro. so it is possible that a rate
> cut and bad money may put too many euros on the
> market further bringing it down. but the reasons for
> holding to the rate are more malign from what I
> hear. basing themselves on the assumption that the
> ec economy is going to better perform vis a vis the
> US and certainly Japan, along with higher rates and
> social  stability, the euro is going to take its
> place alongside the dollar as a parallel world
> currency. could this happen?<
>
> I dunno, but there's an even more malign
> interpretation: the creation of the EU was basically
> a victory of the financial interests, so that (1)
> the ECB is oriented at fighting inflation, not
> deflation or unemployment; and (2) fiscal policy is
> basically ruled out. This might encourage the rise
> of the Euro as an international reserve currency,
> but it won't have the help the dollar had when it
> gained that status (high demand for dollars,
> internationally).
>
>
>
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