Talk Morgan Forums Community The Malvern Arms Jeremy Corbyn Elected Labour Leader

Why cloud cuckoo land? Is there something wrong with the idea or do you simply think there are too many vested interests for it to happen. I would agree on the second but I fail to see anything wrong with the concept.

Lets face it when we had the gold standard instead of so called "floating" currency values the world worked perfectly well. It may not have been a fixed universal currency but by and large you knew where you stood with exchange rates. To a degree gold is still a standard it is just that transporting it around the world is a bit of a problem and many regimes restrict the amount of currency or gold that you can carry across borders.

Ohh! you need to have a good understanding of economics to have an informed opinion on this topic - very complex issue with lots of problems.

I certainly don't know enough, but the Euros problems requiring permanent transfers of wealth from richer to poorer EMU members and the Greek crisis - unable to devalue their currency to make their economy more competetive or alter interest rates is a problem for the European currency union so I read.

I would have thought that the basis of the Greek crisis was very simple: they were allowed, perhaps even encouraged, to borrow more money than they had the income to repay. When world wide crisis hit because our nice American cousins had fiddled with the banking system to hide the fact that they had lent billion of dollars to people who didn't have the income to repay the Greek crisis was an unfortunate side effect. In the end the same applies to a country as it does to a private person. The only difference is that Greece is being kept afloat to avoid it defaulting on its debts to the banks.

Then the US government let a couple of banks sink to the bottom of the bay, prosecuted a couple of people, and then propped up their banking system with loads of cash. This allowed the top executives to collect their bonuses and the rest has been swept under the carpet with no compensation for the banks in other parts of the world who had been nearly bankrupted by the bad faith of the US banks.

Sure there are many other reasons for the current economic crisis but in the end it is you and I that are paying for the saleries and bonuses of the fat cats in banking and politics.

The economists can fill it up with as many technical terms as they like but in the end it is the greed and manipulation of the rich and powerful (not all rich and powerful, thank goodness) that we ordinary people pay for.

to have a common currency, you need monetary and fiscal union

to have monetary and fiscal union, you need political union

this is why the Euro is such a mess, and will continue to be a mess for a long long long time

are you Greek by any chance?

Good article on currency fluctuations.

http://www.investorguide.com/article/11814/the-basics-of-currency-fluctuations-igu/

Can I start by saying that I have nothing but sympathy for the poor suffering citizens of Greece.

Although it gives me no pleasure to be proved right, I was against the single currency from the outset, on the basis that it was (as is so often the way in the EU) a political vanity project rather than an economic one. At no stage when the Euro was created was it apparent how the Greek economy (amonst others) could ever be truly convergent with the German one. I don't understand why the EU always has to be in such a tearing hurry (and to hell with the details). In the 19th century, it took the German states 60 years to achieve a customs union, & they were much closer cuturally and economically than is modern europe.

Whilst it is evident that the ridiculous collaterized debt obligations fiasco was the thing which upset the apple cart and brought to an end the infinite availability of cheap credit, I'm afraid that I don't agree with the argument that evil bankers are responible for governments which have chosen to live way beyond their means (and the Greeks are far from alone in this). The political class have to take responsability for this.

The Greeks (like many of the less powerful economies in the Euro zone) were able to borrow huge amounts of money at rates of interest way below those which could be negotiated based on the strength of their economy. They were only able to do this because of to their association (through the Euro) with the full might and majesty of the German economy. When the manure hit the air conditioning they had no control over interest rates & were unable to devalue their currency. Logically speaking, IMHO their best solution would have been for them to come out of the Euro and default on the debt. The bailouts seem to have been mainly structured to stop German and French banks from dropping a massive bollock rather than to help the Greek people.

Sadly for the Greeks, their elected representatives have been, even by the standards of politicians, an unfortunate mix of venal, corrupt and incompetent. The money they borrowed was distributed in bribes to the electorate (boosting welfare payments & pensions, cutting retirement age), & splurged on projects such as the olympics, with tasty contracts going to their mates (who they were failing to oblige to pay their taxes) no doubt in return for tasty kickbacks. In short, it was like giving money to a tramp; the only question being which wall it ends up being pi$$ed up against.

I totally agree with Giles. A worldwide currency would mean a world government - god help us. Some people think that all nations and peoples are the same. They are not. Those nations that are more productive should be able to reap the benefits by control over their own economies. Those that wish to have a more "socialistic" outlook should pay for it themselves.

Fat lot of good your UK control has done for you - all the trillions of debt and only the city of London money gamblers to manipulate "profits" to keep it all afloat!

Wait till Jeremy gets in and really sinks you hook line and left-sinker!!!!

Giles. I agree with 90% of what you say. The mismanagement of the Greek economy is self evident. It would have made little difference if they had their own currency or the Euro. Certainly the banks would have been less inclined to lend in drachma for the very risk of devalution but the thing that you are overlooking is that most currencies are no longer fixed by government but float on the market like any other commodity. The value of a currency is fixed by the market, and its manipulators, and governments use internal interest rates in an effort to control exchange rates.

I'm very surprised at your being against the single currency Giles. As an importer of the main product that you sell the current overvaluation of the GBP £ must really hurt. Just imagine if you could have a price fixed in Euro.

As far as I can see the main issue with changing to Euro was the exchange rate that was set in various countries at the time of the change over.