11 July 2012

EUROZONE / USA / CURRENCIES: Does the Euro Have Sell-By Date?

http://www.npr.org/2012/07/11/156557152/euro-currency-still-faring-well-for-now
  TO HEAR: 4:05 Report...with transcript.


     Currency speculation can be exciting, profitable...and very dangerous.
     For every big winner like George Soros...who bet against the British pound and took away $ 1 billion...there are thousands literally losing their shirts. 
    Even this editor has played currencies...without leverage and with small cash bets ...buying and selling the Mexican and Cuban pesos, Brasil's cruzeiro...and the Canadian dollar.
     Some tiny gains...and several washes.
     But...why does the euro still keep its value vs the usd...at the $1.21-1.22 level...after 20 emergency debt summits...followed by unfulfilled promises and actions?
     If you ask economist Simon Johnson...the euro doesn't have a long shelf life.
     Professional economist and pessimist Nouriel Roubini believes Greece will abandon the euro...but that Finland will beat it to the blow-off.
     But Harvard economist Kenneth Rogoff says currency values puzzle even experts.
     Primarily because it is a reserve currency...Japan's Yen still hovers around the 79/80 for $1 usd level....when a 110-120 range seems more logical.
     This for a nation with incompetent politicians, no natural energy resources, a rapidly aging population, laws and strong cultural bias against immigration, a nonexistent benchmark rate, $12.3 trillion in sovereign debt that is 214% of GDP...and more than 10 years of stagnant growth.
     Huh?