6 ms·

> Politicians can't pull devaluation stunts anymore LOL. They just keep printing. http://www.ecb.europa.eu/stats/euro/circulation/html/index.en.html http://ww

by ye 13y ago

> Politicians can't pull devaluation stunts anymore LOL. They just keep printing. http://www.ecb.europa.eu/stats/euro/circulation/html/index.en.html http://www.ecb.europa.eu/stats/euro/circulation/html/index.e... 2008 783B 2009 827B (+5.6%) 2010 861B (+4.1%) How much % do your savings generate again? :) I'm trying to find the figures of the amounts they printed after 2011, it's in hundreds of billions. http://www.marketoracle.co.uk/Article32265.html http://www.marketoracle.co.uk/Article32265.html http://www.marketoracle.co.uk/Article30666.html http://www.marketoracle.co.uk/Article30666.html

andy_boot 13y ago
I think you've missed his point. If the ECB prints more money but most of your trade is with other Euro countries (which it will be) then you can't really use the devaluation trick.
- SilasX 13y ago
  Sure you can: mark down the nominal price of the goods you export. Not willing to make them competitive? Good luck.
  - afterburner 13y ago
    How? By lowering wages? That's the tricky part. That's why devaluation is so much easier.
    - jpatokal 13y ago
      To implement, yes, but the impact is the same. Those devalued wages are now worth less when it comes to buying imports, and since (to a first approximation) everything in this globalized world of ours is imported, even local goods and services have to hike up prices in response.
      - afterburner 13y ago
        So you agree devaluation would be equally effective and easier.
    - aigarius 13y ago
      That's what Latvia did - 20% wage cut across the whole country, up to 40% wage cuts in some areas. Government sector lead the way and privates followed. Devaluation also destroys any savings that people might have AND makes the country less safe for the investors.
      - afterburner 13y ago
        Wage cuts make any debt you still have harder to pay off though. Devaluation makes exports more competitive, which will attract investment as sales increase.
justincormack 13y ago
Er, banknotes in circulation is literally money printing yes, but not what people refer to when talking about "printing money". Most money isn't cash, and the amount of cash is fairly irrelevant in a modern economy.
DasIch 13y ago
They money being literally printed is a negligble amount and has effectively no effect on the value of the euro. Even if all those printed hundreds of billions were to be destroyed the result would be an inconvenience and nothing more.

by ye 13y ago

andy_boot 13y ago

I think you've missed his point. If the ECB prints more money but most of your trade is with other Euro countries (which it will be) then you can't really use the devaluation trick.

SilasX 13y ago
Sure you can: mark down the nominal price of the goods you export. Not willing to make them competitive? Good luck.
- afterburner 13y ago
  How? By lowering wages? That's the tricky part. That's why devaluation is so much easier.
  - jpatokal 13y ago
    To implement, yes, but the impact is the same. Those devalued wages are now worth less when it comes to buying imports, and since (to a first approximation) everything in this globalized world of ours is imported, even local goods and services have to hike up prices in response.
    - afterburner 13y ago
      So you agree devaluation would be equally effective and easier.
  - aigarius 13y ago
    That's what Latvia did - 20% wage cut across the whole country, up to 40% wage cuts in some areas. Government sector lead the way and privates followed. Devaluation also destroys any savings that people might have AND makes the country less safe for the investors.
    - afterburner 13y ago
      Wage cuts make any debt you still have harder to pay off though. Devaluation makes exports more competitive, which will attract investment as sales increase.

justincormack 13y ago

Er, banknotes in circulation is literally money printing yes, but not what people refer to when talking about "printing money". Most money isn't cash, and the amount of cash is fairly irrelevant in a modern economy.

DasIch 13y ago

They money being literally printed is a negligble amount and has effectively no effect on the value of the euro. Even if all those printed hundreds of billions were to be destroyed the result would be an inconvenience and nothing more.