Unit labor costs in Greece and Germany (1998 = 100). Source: Peterson Institute for International Economics.Many eyes are now set on Greece: the eurozone underperformer. The question is – will Greece hold or succumb to pressures due to its huge fiscal deficit?
Nobody knows. Edward Hugh does a very good job disclosing the dirty play of Greek politicians that want maximum support from the EU with minimum reform. This mindset is not sustainable – it sent Greece into trouble in the first place. But the Greek example is a very good sign of the times. Reactive politicians are slow thinkers and they do too little, too late.
Bailing out Greece seems more and more probable.
Comment: It has become very difficult to choose a reserve currency. The dollar is well, in the red, while the euro is shaky due to Greece.
Who can profit: Anyone with a crystal ball. Otherwise pay attention to the Swiss franc, gold, and the Brazilian real.
Who can lose: Everyone without a crystal ball. But exporters around the world face some really hard challenges and rising currency hedging costs.
Nobody knows. Edward Hugh does a very good job disclosing the dirty play of Greek politicians that want maximum support from the EU with minimum reform. This mindset is not sustainable – it sent Greece into trouble in the first place. But the Greek example is a very good sign of the times. Reactive politicians are slow thinkers and they do too little, too late.
Bailing out Greece seems more and more probable.
Comment: It has become very difficult to choose a reserve currency. The dollar is well, in the red, while the euro is shaky due to Greece.
Who can profit: Anyone with a crystal ball. Otherwise pay attention to the Swiss franc, gold, and the Brazilian real.
Who can lose: Everyone without a crystal ball. But exporters around the world face some really hard challenges and rising currency hedging costs.
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