[Slonopotam845]

http://www.nytimes.com/2004/12/02/bu...rtner=homepage

Hey, isn't this great ? Without lifting a finger we are draining all those ridiculous Liberals over there of their hard earned cash. Rush is gotta be having wet dreams...
Now, to add insult to injury let's invite the suckers to belly up to the bar for one more round of US Treasuries. Whattya think?

There was a front page article about something like this in the WSJ last month (front page not the back of Sec-A). European small businesses have been suffering for long time because of legal restrictions imposed on their operations on the following aspects:

Hours of operation - limited by law to bolster labor regs.
Price and discount - limited by law to insure nominally high margins so that firms don't engage in price wars.
High cost of operations - taxation and overhead can be much higher than in the US.
Standardization - products are often restricted in where they can be purchased from and in what format, bulk or form factor per EU regs to hew compliance with trade laws.

The macro issues contribute as well. Germany has 10+% structural unemployment and it is the unions which will suffer the most. Lower high wage union employment translates to lower consumer spending.

[NeroASERCH]

The main countries of EU,did not expected a so high quotation of Euro with regard to the US dollar, it favors ours purchases of oil products ,but destabilizes our imports ,however this situation is clearly annoying for certain countries as Japan ,which has just asked by insisting if ECB can act on its rates , the Euro high quotation bothering strongly this country in commercial exchanges with Eu,which is only the most striking example.

The Euro was orginally pegged at 1.17. Today it's around 1.32 so a 12-13% fluctuation is significant but moreso when aggregate GDP growth is zero or slightly less. One model poses that the US and the EU economies are trailing out of their zero employment growth mini recessions and heading toward a vague stagflation where the gap in long term and short term rates closes. At the same time though corporate profits and outright cash are way way way up. So in part large firms are cannibalizing small businesses using financial tools and the small businesses are caught in a no growth trap.

[Lillie_Steins]

[QUOTE=Luke90]KW, Goliath and Mediocrates:
Sorry to have dragged this away from the economics.
I'll leave you to it, seeing as I know very little of economics. I'm a bit out of my depth. Please don't be sorry ,in fact we are all dragged by a system which is eating is tail, ( And EU is bluffing ,poker style),and the worse is for to morrow).Nevertheless Britain is cheating ,Albion always the same.

[Drugmachine]

Of course, this doesn't play out in a vaccum. The artificially low rates of Japan and China push the dollar down against the Euro, and hurt both American and European producers. The strong "rush to the bottom" effect made by trade liberlization with 3rd world or nominally first world nations, which do not enforce environmental, labor or health protections, also hurts the industrialized nations. Over the long run things will stabalize, but we are in the transition phase, and it will hurt. Also, the US foolishly, IMO, has gone too far to the right in protecting our theoretical "property rights" and thus allowing greater and greater wealth disparities, which create unstable economic and social situations. Its a difficult balance, Europe is too far to the left, the US moving too far to the right, IMO. At least Europe is moving in the right direction, albeit very slowly.

The Euro was orginally pegged at 1.17. Today it's around 1.32 so a 12-13% fluctuation is significant but moreso when aggregate GDP growth is zero or slightly less. One model poses that the US and the EU economies are trailing out of their zero employment growth mini recessions and heading toward a vague stagflation where the gap in long term and short term rates closes. At the same time though corporate profits and outright cash are way way way up. So in part large firms are cannibalizing small businesses using financial tools and the small businesses are caught in a no growth trap.

[doctorzlo]

Yeah except that in financial terms all of our debt holders are over there. We need to keep long term rates stable or slightly inflationary and one way to do that is to insure debt markets are stable and depressed.

This creates arbitrage opportunities overseas and you are beginning to see personal wealth leave to other capital markets as a result. In fact this latest round of wall street year end bonuses almost entirely went into overseas funds. Foreign exchanges and debt markets are seen as more volatile than the US market and the potential to make more money is over there not here. To cap the volatility see you'll an expansion in overseas hedge funds.

[HedgeYourBets]

I don't see what it has to do with them being liberal. As far I can see, the euro is overpriced, and the Europeans haven't really minded so far, until it started to bite them under the tail. The fact is, you can buy more for a dollar in the U.S. than you can for a euro in Europe. So they can only blame themselves for their lousy fiscal policies.

[9mm_fan]

This is their punishment For what exactly, SemSem?
Disagreeing with you?