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Posted on 05/15/2005 5:14:47 AM PDT by RaceBannon
Putin: Why Not Price Oil in Euros? By Catherine Belton Moscow Times October 10, 2003
President Vladimir Putin said Thursday Russia could switch its trade in oil from dollars to euros, a move that could have far-reaching repercussions for the global balance of power -- potentially hurting the U.S. dollar and economy and providing a massive boost to the euro zone. "We do not rule out that it is possible. That would be interesting for our European partners," Putin said at a joint news conference with German Chancellor Gerhard Schroeder in the Urals town of Yekaterinburg, where the two leaders conducted two-day talks. "But this does not depend solely on us. We do not want to hurt prices on the market," he said. "Putin's putting a big card on the table," said Youssef Ibrahim, managing director of the Strategic Energy Investment Group in Dubai and a member of the U.S. Council on Foreign Relations, an influential body of leading world thinkers thought to help set the United States' foreign policy agenda. "In the context of what is happening worldwide, this statement is very important," he said.
Putin's words come in the wake of a protracted drive by the EU to attract more countries' trade and currency reserves into euros, in a bid to chip away at U.S. hegemony over the global economy and money supply. A move by Russia, as the world's second largest oil exporter, to trade oil in euros, could provoke a chain reaction among other oil producers currently mulling a switch and would further boost the euro's gradually growing share of global currency reserves. That would be a huge boon to the euro zone economy and potentially catastrophic for the United States. Dollar-based global oil trade now gives the United States carte blanche to print dollars without sparking inflation -- to fund huge expenses on wars, military build-ups, and consumer spending, as well as cut taxes and run up huge trade deficits.
The only "real money" is the one which is based on production capacity since the "real money" is a token to pay for the real goods. Even gold is not as real (Imperial Spain learned it hard way).
They are not my data. They are OUR data. It is better if you find/post them so my "bias" will not affect the selection.
11.03.2005 - 17:43 CET| By Richard Carter
EUOBSERVER / BRUSSELS - The US economy is 20 years ahead of that of the EU and it will take decades for Europe to catch up, according to an explosive new study published on Friday (11 March).
The survey, unveiled by pan-EU small business organisation Eurochambres, is intended as a sharp "wake-up call" for EU leaders as they gather on 22 March for a summit on how to boost growth and jobs in the EU economy.
The EU's current performance in terms of employment was achieved in the US in 1978 and it will take until 2023 for Europe to catch up, the report shows.
The situation is scarcely better when it comes to income per person. The US attained the current EU performance in 1985 and Europe is expected to close the gap in 2072.
But the bleakest picture comes when comparing the two economic blocs in terms of research and development. Europe is expected to catch up with the US in 2123 and then only if the EU outstrips America by 0.5 percent per year in terms of RΔinvestment.
Presenting the survey, Arnaldo Abruzzi, the Secretary-General of Eurochambres, said, "the current EU levels in GDP, RΔinvestment, productivity and employment were already reached by the US in the late 70s/early 80s".
"Even the most optimistic assumptions show it will take the EU decades to catch up and then only if there is considerable EU improvement", he concluded.
Furthermore, the survey points out that enlargement will make the EU's mountain even harder to climb.
"Data clearly suggest that including the 10 new member countries in the comparison would further deteriorate Europe's position compared to the US for all four major indicators", says the report.
The survey was conducted using a method called the "time distance measure", pioneered by Professor Pavle Sicherl at Ljubljana University.
Eurochambres called for EU leaders to focus on concrete actions to revive the EU's economy and for a communications strategy to lay out the economic challenges facing the EU.
The group represents 18 million enterprises across Europe.
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This was posted here (http://www.euobserver.com/?sid=9&aid=18646), but it now requires a fee to access.
Are you shorting the $ and buying Euros? Good luck, unless you are buying Canadian $.
I will accept whatever you select from a recognized body.
Thought so. You're full of hot air. Byebye.
I posted this on a recent thread a few weeks ago. Here are Germany's and France's per capita GDP over the last few years as a percentage of the USA's:
Germany
1991 80.4%
1992 80.0
1993 77.5
1994 77.0
1995 77.1
1996 75.5
1997 74.0
1998 73.3
1999 72.4
2000 72.6
2001 73.4
2002 72.6
2003 71.0
France
1991 79.4
1992 78.7
1993 76.6
1994 75.8
1995 75.9
1996 74.6
1997 73.3
1998 73.4
1999 73.0
2000 73.6
2001 75.1
2002 74.7
2003 73.2
Down they go. And when you consider that their population growth is slower than ours, that makes the difference that much more.
Is it measured in dollars? If so, how are the numbers in 2004/2005?
I did not know that France/Germany has 80% of US per capita GDP in 1991. I was thinking it was lower.
Apr 29th 2005
From The Economist Global Agenda
In a new report, six think-tanks have slashed their forecast for German economic growth in 2005, citing high oil prices and an unfavourable exchange rate. If Germany’s export-driven economy cannot recover when the world economy is racing along, how will it fare during a slowdown?
IN THEORY, Germany should be booming by now. Sizzling global economic growth in 2004, and more of the same expected for 2005, has raised demand for its exports, a boon to its large manufacturing sector. The European Central Bank (ECB) has kept interest rates in the euro area at an easy 2% for 22 months, and looks set to keep doing so well into 2005. Fiscal policy is also expansionary: the government’s budget deficit has breached the Maastricht treaty’s 3%-of-GDP limit for three years running, and by all accounts will do so again this year. Yet for all this, for the past four years Germany has struggled to produce GDP growth of even 1% a year.
The future looks little better than the past. This week a consortium of German think-tanks released its semi-annual report, slashing its forecast for German growth this year from a lacklustre 1.5% to an almost pulseless 0.7%. The German government then altered its own forecast to 1.0%, down from its previous one of 1.6%, made in January. More worryingly, the think-tanks' report argues that the German economy is not stuck in a particularly vicious cyclical slowdown. Rather, its structural problems, particularly the highly regulated labour market, have reduced trend growth (the average growth rate of the economy) to a meagre 1.1%, in contrast to roughly 2% for the rest of the euro area, and about 3% for the United States. Unless these trends reverse, Europe’s largest economy could eventually wind up as its economic backwater.
The most stagnant pool is undoubtedly the labour market. Germany’s unemployment rate fell to 11.8% in April from the record 12% it hit in March, pushing the number of jobless back below 5m for the first time in months. However, this may have more to do with changes in benefits for the unemployed, and a cold spell in March that made that month's figures unusually low, than any improvement in hiring conditions. On Tuesday April 26th Bert Rürup, head of Chancellor Gerhard Schröder’s panel of economic advisers, said that the country will not begin adding significant numbers of jobs until annual economic growth hits 1.5-2%. High unemployment has helped keep consumer spending depressed, leaving the economy dependent on exports to drive recovery. But global economic growth, which the International Monetary Fund’s World Economic Outlook puts at 5.1% in 2004, is forecast to slow a bit, to 4.3%, in 2005. If 5.1% wasn’t enough to pull Germany out of its doldrums, what will?
To be fair, Germany knows that it has a problem. Mr Rürup acknowledged on Tuesday that the economy could add jobs at lower growth rates if its labour market was more flexible. Since 2003, the government has made serious efforts at structural reform, loosening some of the labour-market restrictions that have made Germany such an unattractive place to create new jobs, and announcing a cut in corporate income tax. Critics, however, complain that the latter will make little difference to most companies, while the former does not go nearly far enough. Germany’s labour laws are still much friendlier towards workers than employers, and its labour costs, at the equivalent of around $33 per hour, are among the highest in the world. And fears that poorer new European Union members will force Germany into a “race to the bottom” have driven the government to consider imposing a minimum wage, which can only make the economy less flexible.
The rock meets the hard place
The trouble for the government is that it has to try to kickstart the economy while struggling to hold on to power. In February, Mr Schröder’s Social Democrats (SPD) were pushed into second place by the opposition CDU in a state election in Schleswig-Holstein; exit polls suggested that high unemployment and the budget deficit were decisive issues. Now all eyes are on the election to be held on May 22nd in North-Rhine Westphalia, Germany’s most populous state. A loss there could doom the government’s chances of winning the 2006 general election.
Fear of the impending election seems to be pushing the SPD further to the left, at least rhetorically. Besides the flirtation with a minimum wage, the party’s chairman, Franz Müntefering, began railing this month against the “growing power of capital”. According to Mr Müntefering, profit-seeking by international firms not only endangers Germany’s generous welfare state, but also its democracy. Such statements may reassure voters, but they are unlikely to make Germany a more appealing place to do business, particularly with investor-friendly central European countries beckoning firms to relocate.
From the point of view of a German politician, alas, all policy choices must look bad. Membership in the euro area leaves the country monetarily at the mercy of the ECB, which seems determined to maintain a hard line on inflation, and thus to resist calls for an interest-rate cut. Germany’s already-large budget deficits cannot be sustained indefinitely at such low rates of economic growth, much less increased. And deeper structural reforms will not be popular with the voters who lose benefits or job protection—particularly since such reforms may well make unemployment worse in the short term, as firms shed the workers they previously found it difficult to fire.
Yet from an economist’s point of view, doing nothing looks worse. This week’s think-tank report forecasts growth to pick up next year, but only to 1.5%, hardly cause for celebration. Moreover, the forecast assumes that the impact of high oil prices and an appreciating euro will fade, even though there is a real possibility that one or both will rise instead of fall. There is also a risk that America’s unsustainable current-account deficit, which has been supporting world growth, will precipitate a crisis, which would hurt demand for Germany’s exports. With the economy this vulnerable to external effects, even radical reform may be less risky than the status quo.
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This came from the Economist on April 29. If not now, when? Germany is the EU powerhouse. I'm not going to lay awake nights worrying about the Euro.
OECD data (http://www.oecd.org/dataoecd/5/51/2483816.xls) indicates that for the Euro area, net Government Debt is 52.5% of GDP for 2003 compared to 42.8% of GDP for the US.
(For what it is worth, there is an extranenous ')' in the URL.)
One might keep in mind that debt is treated differently by different countries. For instance, if you look at table 32 (gross debt) rather than table 33 ("net" debt), you can see that the U.S. is at 62.5% versus the E.U. at 77.4% for 2003. [Gross debt in this case I believe attempts to simply lump together debt rather than follow each country's on-budget/off-budget rules and accounting for assets.]
Another item to look at is how much of a burden is the debt. Table 31 indicates that 3% of the GDP in E.U. is going to pay interest, whereas the U.S. is only at 1.8% (and Japan only at 1.5% despite their very large government debt due to the very low interest rates prevailing there.)
True there are other series and variations in definitions, but the pattern seems to me to be all the same. Bottom line, are we better off than the Euro economies from a long-term currency value POV? I say yes, A. Pole says no, you say ...
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I don't know the European economies well enough to make an educated guess as to their future.
As to what currencies might do over the long term, I could only guess. I don't know if in the 1890-1910 period that anyone would have guessed that sterling would ever be supplanted as the world's reserve currency.
We have really only had modern currencies based on central banking for a short period of time, and I do think that we all have surprises in the form of unlikely events occurring, especially with the Babelian tower of derivative products that we have created.
Germany edges out Arkansas in per capita GDP.
Sunday, June 20, 2004 12:01 a.m. EDT
The growing split between the U.S. and Europe has been much in the news, mostly on foreign policy. But less well understood is the gap in economic growth and standards of living. Now comes a European report that puts the American advantage in surprisingly stark relief.
The study, "The EU vs. USA," was done by a pair of economists--Fredrik Bergstrom and Robert Gidehag--for the Swedish think tank Timbro. It found that if Europe were part of the U.S., only tiny Luxembourg could rival the richest of the 50 American states in gross domestic product per capita. Most European countries would rank below the U.S. average, as the chart below shows.
However, the Bush fortunes as well as many Washington politicians and 'big thinkers' are rooted in mid-east oil...Seems it would benefit that group significantly if the currency was switched to the Euro...
What differance does that make [sarcasm]..........
the links for your post:
http://www.freerepublic.com/focus/f-news/1156771/posts
http://www.opinionjournal.com/editorial/feature.html?id=110005242
The numbers are in dollars, but they don't use excahnge rates for conversion. They use a method called Purchasing Power Parity to determine how much each currency is worth. That way, the numbers are not tied to exchange rate fluctuations. I don't think the final 2004 numbers are available yet.
By this method, the USA has the fourth highest per capita GDP, behind Luxembourg, Bermuda, and Norway. France is 22nd, Germany 23rd, and Poland 69th. Bringing up the rear at 208th is Sierra Leone.
http://www.worldbank.org/data/databytopic/GNIPC.pdf
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I hope Putin is a better KGB operative than he is a currency trader. Why does he want to accumulate Euros on the eve of the Yurps voting down the EU Constitution? Does he think the Euro is going to go up on that news?