Thursday, October 11, 2007

EU to China and the US: sort your shit out

Following up on the post below, we have this from Economicobjectorvism (his headline):
Europe is starting to feel the bite as the U.S. dollar plummets, making French wine, Italian fashion and German cars expensive purchases for the EU’s main export market in the U.S.

Last week, the employers federation BusinessEurope said that, by crossing 1.40 against the US dollar, the euro exchange rate had reached a “pain threshold” for European companies. It also complained the euro was appreciating too fast against the Chinese yuan and Japanese yen.

As opposed to anybody else on Earth? Are we to suppose that we should have to bear the consequences of other countries’ actions (or inaction)?

This is called foreign exposure, for Cliff’s sake. Other countries act according to their self-interest. I’m sure, even in Luxembourg, we can find, say, one man being mightily inconvenienced by the inaction of a neighbour, or a local authority.

Also a part of the overall story, including the growth rate of the US (2.5%? No problem, right? I mean inflation in the US is only 1.7% anyway - it’s not as though the economy in the real world isn’t growing at all), are the seeming advances the EU finance ministers are making, relative to the rest of us, in closing down how debt is packaged and sold (Germany was hit particularly hard, but I haven’t come across the sorts of dodgy rule-changing in for which British, Australian and US central banks are going)....MORE