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ilostmypassword    6,726
11 minutes ago, nauseus said:

In theory!

There are many many instances to show it in fact. And virtually every economist would support that. So what's your theory? How would deflation depress the rate at which a currency is exchanged?

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nauseus    876
2 hours ago, ilostmypassword said:

There are many many instances to show it in fact. And virtually every economist would support that. So what's your theory? How would deflation depress the rate at which a currency is exchanged?

You can read my post again (edited) and also look at this late 2013 article in the FT, which explains everything much better. This was written a year before the Euro really fell but the last para is significant.

 

Paste this:

 

A weak euro is Europe’s best means of beating deflation

 

into google search and it comes up as first item...

 

Edited by nauseus

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ilostmypassword    6,726
2 hours ago, nauseus said:

You can read my post again (edited) and also look at this late 2013 article in the FT, which explains everything much better. This was written a year before the Euro really fell but the last para is significant.

 

Paste this:

 

A weak euro is Europe’s best means of beating deflation

 

into google search and it comes up as first item...

 

I'm assuming that the following link is for the article in question

https://www.ft.com/content/33def16c-47c2-11e3-9398-00144feabdc0

If so, it says exactly the opposite of what you think it does. It says that the EU is trying to promote inflation via lowering interest rates to lower the value of the Euro. In other words, it is acting to promote the opposite of deflation which is inflation. Inflation to lower the value of the euro and so promote exports.

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nauseus    876
5 hours ago, ilostmypassword said:

I'm assuming that the following link is for the article in question

https://www.ft.com/content/33def16c-47c2-11e3-9398-00144feabdc0

If so, it says exactly the opposite of what you think it does. It says that the EU is trying to promote inflation via lowering interest rates to lower the value of the Euro. In other words, it is acting to promote the opposite of deflation which is inflation. Inflation to lower the value of the euro and so promote exports.

I understand it. Read the last short para again.

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ilostmypassword    6,726
7 minutes ago, nauseus said:

I understand it. Read the last short para again.

Do you mean this one?

"A substantial fall in the euro should be welcomed as an escape from the risk of deflation and the key to improved fiscal policies."

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citybiker    331

Well the BoE recent announcement that a rate rise is pending as early as November this year (2017) has certainly boosted the markets.

£-€1.13
£-$1.33


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nauseus    876
1 hour ago, ilostmypassword said:

Do you mean this one?

"A substantial fall in the euro should be welcomed as an escape from the risk of deflation and the key to improved fiscal policies."

Yep. I can't open it anymore. Risk is the key word. This written late 2013 before the Euro went down (a lot).  

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ilostmypassword    6,726
7 hours ago, nauseus said:

Yep. I can't open it anymore. Risk is the key word. This written late 2013 before the Euro went down (a lot).  

Well, then it says the opposite of what you assert when you wrote "Because the Euro was depressed from mid 2014 due to deflationary pressure" This just says the same thing that the article opened up with: promoting inflation, in this case by lowering interest rates, fights deflation and tends to lower the value of a currency. And it would be truly bizarre if an article that opened by saying that an article that opened by saying that the Eurozone is attempting to lower the value of the euro by promoting inflation would conclude by saying just the opposite. A piece of journalistic incompetence that would be especially unlikely in the Financial Times.

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