1996 UBS Redux: Who Should Have Been In The Euro? - News and Current Events | futures io social day trading
futures io futures trading


1996 UBS Redux: Who Should Have Been In The Euro?
Updated: Views / Replies:211 / 0
Created: by Quick Summary Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

1996 UBS Redux: Who Should Have Been In The Euro?

  #1 (permalink)
Quick Summary
1996 UBS Redux: Who Should Have Been In The Euro?

No, it's not Friday and no, it's not a total joke, but UBS' Stephane Deo takes a retrospective look at what his firm's economists were saying back in 1996 about who should be in and who should not be a part of the Euro 'project'. Given the growth and performance of the 'ins', it seems perhaps we should, as Deo says, always pay attention to economists for a happy and prosperous existence but it is somewhat insightful that as far back as the beginning of this experiment, it was relatively clear (in 1996) that proximity to Maastricht rules, political flexibility, and real economic prospects separated the 17 nations, leaving an at-the-time optimal five (or maybe six) nations. There are many yeah-but comments with this look-back, but for sure, it provides a quick-and-dirty view on what these countries looked like before whatever integration they have now, and maybe what they should revert to once again - it is certainly cathartic to see the peripherals already standing so far from the core.



UBS - Stephane Deo - What if – economists had been listened to?

This is, perhaps, the easiest question to answer. The secret to a happy and prosperous existence is to listen to economists all the time.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).




Back in 1996 UBS published research saying that the Euro should consist of five or six countries (Germany, Austria, the Netherlands, France, Luxembourg and, with a certain degree of charity as to the debt burden, Belgium – summarised in the Venn diagram above). What would have happened if the Euro had consisted of those countries, and no more?

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


The chart shows the difference in growth between the strongest and weakest Euro member (given the Euro’s current composition), alongside the difference in growth for the strongest and weakest Euro member in a perfect world (where economists decide everything). The growth differential for the Euro 17 is huge, unmanageable, and symptomatic of an entirely dysfunctional monetary union.

The growth difference for the Euro 6 (actually 5, as Luxembourg has been excluded from this analysis) is steady, modest, and entirely manageable with a single interest rate and a single exchange rate.

In other words, a Euro consisting of the six countries would have worked in economic terms. Monetary policy would have been appropriate for all parts of the union. That would not have prevented fiscal strains as the global financial crisis developed, but the fiscal strains might have been somewhat lessened (because fiscal policy would not attempt to compensate for an inappropriate monetary policy).

How the eleven excluded from the Euro would have fared is a more difficult question. Would Greece have had so profligate a fiscal policy if it had been able to run a more appropriate monetary policy? Would the property bubbles, and ensuing crashes, in Spain and Ireland have taken place if monetary policy had been sensitive to their needs? While there are disadvantages in using a less liquid currency, it seems likely that the advantages of a more appropriate domestic monetary policy would have offset the potential disadvantages of a more volatile exchange rate. After all, in all of these economies, the domestic economy far outweighs the external in terms of its importance.

Unsurprisingly, therefore, it seems that the world and in particular the Euro would have been a better place had economists’ advice been heeded.



More on ZeroHedge...

Reply to share your thoughts on this current event.


Reply



futures io > > > > 1996 UBS Redux: Who Should Have Been In The Euro?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Banks Will Still Be Under-Capitalized, UBS Does The LTRO Math Quick Summary News and Current Events 0 December 21st, 2011 06:10 AM
Citigroup, UBS accused of rate manipulation in Japan kbit News and Current Events 0 December 11th, 2011 02:44 PM
UBS CEO Quits, Board Wants Fast Restructuring Quick Summary News and Current Events 0 September 24th, 2011 09:40 AM
UBS' Biggest Shareholder Breaks Silence About Scandal Quick Summary News and Current Events 0 September 21st, 2011 06:50 AM
UBS Trader in $2 Billion Loss on Unauthorized Trade Quick Summary News and Current Events 2 September 19th, 2011 12:52 PM


All times are GMT -4. The time now is 03:21 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-16 in 0.06 seconds with 19 queries on phoenix via your IP 54.196.201.241