If you talk to European bankers and politicians about austerity measures, most will say it’s a necessary evil to clean up the soverign debt crisis. Here is another perspective … see below:
The Euro reached a one month high against the dollar today at 1.3349 after Spain presented it’s annual budget plan.
It’s goal is to save 27 billion Euros in 2012 with painful austerity measures that are by no means popular. Spain has an even higher unemployment rate than Greece where over 20 percent of the workforce remains unemployed. Yesterday, Spanish workers protested the measures not only with pockets of violence in Barcelona but held a nation wide strike that halted business and travel. Will this be the beginning to a stronger EURO or a potential tipping point towards another direction for the country? Time will tell but the people of Spain and democracy may not like this regime much longer …
Obama was right when he said recently that there’s too much talk of war with Iran.
All the sabre rattling from Iran and tough talk from Israel and even U.S. Republican Presidential candidates over Iran’s nuclear program is making energy markets very nervous. It has done nothing except raise the price of oil and gasoline around the world. Gas prices on average in the U.S. is hovering around $4.00 a gallon, which may put a damper on the U.S. economic recovery. With gas prices that high, who has the money to spend on other things that can boost the economy? So let’s stop talking about war and military strikes; give peace and our wallets a chance!!!
The Greenback reached a one month high versus the Euro at 80.132 after fresh data showed that U.S. employers added 200,000 jobs in the month of February.
Obviously, this is positive news that the U.S. Economy is strengthening. Despite the positive news, certain geo-political events like talk of military strikes with Iran and the price of oil, as well as gas at $4.00 a gallon ( come on ! ) are making things difficult for the economists to predict the future. Although unemployment remains at 8.3%, it’s a lot better here than the other side of the Atlantic where certain countries have up to 20% unemployment rates. Last week’s successful Greek bond swap also prompted the Euro to fall as traders took profits in their buy-the-rumour-sell-the-fact tactics. Greece is also by no means out of the woods, but the swap has definitely shined a small flashlight in that very very dark forest!!
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