Europe - Economic Data & News 10 (Dec 13 - Jan 15)

Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Thu Jan 08, 2015 5:44 pm

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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Thu Jan 08, 2015 7:01 pm

EMU deflation is the final betrayal of southern Europe
http://www.telegraph.co.uk/finance/comm ... urope.html
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby winston » Fri Jan 09, 2015 7:02 am

Where Your Money Isn’t Welcome

You know the world is crazy when banks charge negative interest on deposits. This is exactly what is happening in Switzerland as the small nation tries to fend of the monetary policy of the euro zone.

Good luck with that.

Switzerland has its own currency, the Swiss franc. In 2011 the PIIGS of the euro zone (Portugal, Italy, Ireland, Greece and Spain) were in tough shape. The integrity of the euro was in question as the Greek economy showed signs of collapse. Investors large and small fled the euro, rushing into other currencies like the Swiss franc.

As large pools of money sold euros and bought Swiss francs, the value of the franc soared against the euro. While the lofty currency allowed the Swiss consumers to buy more foreign goods, it meant that foreigners had to spend more on Swiss items, like Swatch watches and Swiss vacations.

Apparently the Swiss weren’t comfortable standing idly by as exports fell and tourism dropped off, so the Swiss National Bank (SNB) put in place a downside limit of 1.20 on how many Swiss francs one euro can purchase. If the exchange rate fell lower (meaning the franc was stronger), the SNB would print new francs and use them to buy euros, keeping the exchange rate at 1.2.

This action calmed the markets somewhat, but only for a while…

Over the last 12 months inflation in the euro zone has dropped near zero, while GDP growth is tepid at best. The unemployment rate is stuck above 10%, and Greece is about to hold an election in which a far-left party that favors repudiating debt is polling ahead of other parties.

Citing weakness across the euro zone, ECB policy makers announced they could soon start their own quantitative easing (QE) program. All of these things have combined to push the euro to decade lows, causing other currencies to soar… except for the Swiss franc.

As long as the SNB keeps its exchange rate pegged at 1.20 or higher, the euro can’t lose more value against the franc, which gives investors a free pass to exchange their falling euros into nice, strong francs at the artificially high level of 1.2.

Not being stupid, money managers, pension fund managers, and everyone else who handles large amounts of euros are rushing to exchange euros for francs. In an effort to shrink the amount of money coming in, the SNB has instituted negative interest rates on deposits.

The hope is that if investors have to pay a penalty in negative interest rates once they exchange euros for francs, they might be less inclined to make the trade in the first place. This is a great theory, but it misses the bigger point.

The euro zone is stuck in a low inflation or even deflationary environment, so funds stuck in that currency are going to suffer in the weeks and months ahead. Paying a small price, such as a negative interest rate on deposits, to hold funds in a different currency is worth it, especially if the exchange rate is artificially high in the first place.

The best thing the Swiss can do is get rid of the limit on the exchange rate and let the valuation float with the market. This will cause some pain in the short run, but it’s much better than continually printing new francs to buy euros as they flood the small country.

In the larger picture, the fact that Switzerland has to resort to such measures in the first place indicates how difficult the situation in the euro zone has become. For years we’ve pointed out the two big problems in Europe – an overhang of debt and aging populations.

Monetary policy and exchange rates won’t make these problems go away. The good news is that anyone living outside of the euro zone should be able to take a cheaper European vacation in the years to come.


Source: Economy & Markets
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Sat Jan 10, 2015 12:00 pm

EU austerity faces rising public anger
http://www.aljazeera.com/indepth/featur ... 57639.html
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Mon Jan 12, 2015 1:23 pm

Don't believe the scaremongering: Greece leaving the euro would be no disaster
http://www.telegraph.co.uk/finance/econ ... aster.html
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Tue Jan 13, 2015 2:58 pm

RBS bets ECB blitz to reach €4.5 trillion and reignite asset boom
http://www.telegraph.co.uk/finance/econ ... -boom.html
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby winston » Wed Jan 14, 2015 4:55 am

When You Just Have to Get Away By Jeff Clark

It wasn't the noise that woke Dieter up. It was the uncomfortable feeling that something odd was happening in the neighborhood.

Call it intuition, a sixth sense, or a side effect of the sardine and red onion sandwich he had devoured just before bedtime… Whatever it was, Dieter was wide awake at 12:07 a.m. and he was compelled to take a look outside.

So Dieter slipped out of bed, careful not to disturb his wife, Agnes, and put on his black, terry-cloth bathrobe and a pair of white bedroom slippers. The slippers were a complimentary amenity from the Fontecruz Hotel in Seville, where Dieter and Agnes had celebrated their 40th wedding anniversary.

Dieter then snuck out of the bedroom and tip-toed toward the front door. It was cold outside. Little puffs of steam escaped from Dieter's mouth every time he exhaled. Dieter folded his arms across his chest, and leaned out over the front porch steps to survey the neighborhood. He looked to the right and saw nothing but the dim yellow glow of a few street lights. Then he looked to the left… and that's when he grew concerned.

There were two large vans parked about 16 houses down on the left-hand side of the street. Dieter could see the outlines of four or five people carrying stuff out of a house and placing it into the trucks.

"Thieves!" Dieter thought to himself. But they were moving a little too casually for thieves. And they were making a little too much noise.

He sneaked down the street toward the vans to investigate. As he approached, Dieter saw giant letters on the side of the vans… "Midnight Express Moving & Storage - For when you just have to get away"

No longer concerned with being inconspicuous, Dieter strolled right up to the house and stood next to the mailbox. The golden letters on the black mailbox were supposed to read "PAPADOPOLOUS" but time and neglect had taken its toll. The gold letters had faded and chipped away. All that was left was, "PAPA LOU."

"Can I help you?" a man with a clipboard asked. The man was shorter than Dieter, by about four inches. And his face was flattened, as if it had been on the wrong side of an argument with a hammer.

"Um," Dieter stammered, "I was just wondering what was going on. I mean… it's a little late in the evening for all this…" And then it hit him… "Hey." Dieter exclaimed, "Are the Greeks moving?"

"I can neither confirm nor deny your inquisition," the man with the clipboard said. "But hey," he winked, "it ain't like we're debt collectors repossessing all this stuff."

The man chuckled, punched Dieter lightly on the shoulder, and pointed to the slogan on his truck, "Sometimes you just have to get away. Right?" he asked.

Dieter smiled. He thought about all the checks he had written to the Homeowners Association over the past three years. That money went right to the Greeks – in order to keep them in the neighborhood, even though Dieter didn't think they deserved to be there.

Now they were leaving. They weren't going to be Dieter's problem anymore. He wasn't going to have to write any more checks. He wasn't going to have to put up with the riff raff on the street. He and Agnes could sit back and enjoy the neighborhood in the way they had always wished for it to be.

"Nice slippers," said the man with the clipboard. "I hear the Fontecruz Hotel is a really nice place."

"It is," Dieter replied, "My wife and I stayed there a few years ago."

"Mr. Rodriguez, just up the street, has the exact same pair," the clipboard man said as he pointed in the direction of the Spaniard's house.

"How do you know that?" Dieter asked.

"I saw them when Mr. Rodriguez asked us to give him a quote last week. They're thinking of moving too."

Dieter's jaw dropped. He was okay with the Greeks leaving the neighborhood. But he liked the Spanish. He would be sad to see them leave.

"They're not the only ones either," the man said. "The Romanos, the O'Briens, and the Almada family have all asked for quotes as well. If this move with the Papadopolous family goes well, we might have a lot of late-night moving sessions in this neighborhood over the next few months."

"You better get back to bed, buddy," the clipboard man chided, "You're gonna have a lot more sleepless nights in the weeks ahead."

Source: Growth Stock Wire
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Thu Jan 15, 2015 11:17 am

Europe's imperial court is a threat to all our democracies
http://www.telegraph.co.uk/finance/comm ... acies.html
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby behappyalways » Fri Jan 16, 2015 10:59 am

World deflationary forces have swept away Switzerland's defences
http://www.telegraph.co.uk/finance/comm ... ences.html
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Re: Europe - Economic Data & News 10 (Dec 13 - Mar 15)

Postby winston » Sat Jan 17, 2015 5:59 am

What In The World Just Happened In Switzerland?

By Michael Snyder

Source: The Economic Collapse Blog


http://www.thetradingreport.com/2015/01 ... itzerland/
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