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How is the Euro defying gravity?

Discussion in 'Forex Articles' started by Ricex, Nov 16, 2011.

  1. Ricex

    Ricex Sergeant

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  2. Pharaoh

    Pharaoh Colonel

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    Intriguing article.

    I have to agree with the last part. If they dump the countries that can't or won't meet their obligations, the remaining countries are on much firmer footing.

    On the other hand, if they keep the bad ones in the mix, a domino failure in the European banking system isn't exactly a the kind of thing that makes me want to stuff my mattress full of Euros instead of other currencies.
     
  3. RahmanSL

    RahmanSL Major

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    Last week, I too thought the Euro would fall like a brick as their many of their member countries economy is much worst off than the US.

    But, now that you mentioned it, I think it has all to do with export trades for the US.
    Like many other countries, the US Treasury probably stepped in each time the Euro falls too much against the US dollar, very much like what the Japanese do when the Yen appreciates too much for their trade exports.


    As for stuffing currencies in mattress, take it from me that the smell of printing ink (if new notes) is overpowering and the notes are definitely not meant to be slept on : )
     
  4. WaveRider

    WaveRider Sergeant

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    Bear rides are fun too

    The surge in the USD was a structural issue in how the US assets were funded. Interesting. Wonder how the EUR assets are structured. This is the kind of reading that makes my mind go numb.

    I can't believe Corzine was long Italian debt. I'm pretty much a chart guy but those are some very overwhelming fundamentals. When the population feels money is free and your gov't has all the money it wants, the culture of taking and entitlement to taking is hard to change. Any infinite growth model has to collide with a finite resources reality. For this reason, I don't see how the math works out on ANY pension funds, including USA's Social Security. Italy and Greece as a culture felt like the Gov't had endless amounts of money and any union contracts would be viable. Europe has to be all in or all out or it will go up in smoke. If that market bombs, that domino will fall on us in the USA. I guess turn about's fair play.

    I'd say a longer term sell and hold position is a good idea. Any gentlemen's bets for a EUR/USD 1500 pip drop over the next 6 months?
     
  5. Ricex

    Ricex Sergeant

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    It would be nice to have that option without consequence, but with French banks alone up to their eyeballs to the tune of $150 billioni with Italian debt, cutting off a limb is going to be painful.

    In Europe not only do we have a serious financial problems but we've got even bigger political problems, and it's that that will eventually topple the apple cart.

    They simply have no idea what to do to get out of the hole they have dug. The political promise has rung hollow for many years in european ears, but now it has just become insulting.

    That's an interesting bet, wow 1.19!!, sounds distant and tiny lol.
     
  6. Pharaoh

    Pharaoh Colonel

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    All options for the ECB will be painful.

    They should have kicked at least one country out last year. That would have sent the message that the ECB is serious about defending the integrity of the Euro. Instead, they keep letting the issue get worse and worse.

    I think both the Euro and the Dollar are both going to be in for a world of hurt very soon.
     
  7. MarketBullsNet

    MarketBullsNet Recruit

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    I think its just a matter of time before we see lower levels in EUR/USD. It seems that the market is heavily net short , so a lot of these weaker positions need to be shaken out before we can see a real move.
     
  8. CaptainAmerica

    CaptainAmerica Recruit

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    Spain and Greece are really weakening the Euro at the Moment
     
  9. fxsoldier

    fxsoldier Recruit

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    sometimes i think that problems of the spain will be more dangerous than greece's
     
  10. Pharaoh

    Pharaoh Colonel

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    In a house of cards, problems with any one card could bring the whole house down.

    Hello ECB! The time to take a pain pill and vote the weakest link off the island is running out. (How's that for a mixed up set of references? :p)

    This whole "Eurozone stands and falls together" attitude can only lead to falling together. Every day delay in kicking one out to set an example only makes it worse.
     

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