Monday, December 5, 2011

Currency Analysis, Euro Breakup: Current Value of the Euro and Future Value of the Deutsche Mark

An interesting report came out from Normura Global Reseach looking at what Euro area currencies might look like if the Euro was no more.

There are nice write-ups about the report by the Financial Times and Forbes (so I will not get into that here). However, the question I continue to have is why is the Euro continuing to be valued so high? If every national currency (except for Germany, barely) would trade lower......then why is the combined currency still trading where it is?

And if this analysis is remotely accurate then people better start inventing new reasons why Germany should not leave the Euro for the Deutsche Mark. So far the only reason people come up with is that a stronger currency (a new Deutsche Mark) would hurt their export based economy. However, as shown in the chart, that revaluation higher would barely amount to anything. While there might be an initial flight to the 'assumed' safety of the new Deutsche Mark, people should not forget that Germany would also have to recapitalize its banks to absorb the losses that they would incur from a Euro breakup and PIIGS defaults -- Quickly weakening their currency.


  1. This comment has been removed by a blog administrator.

  2. The United States dollar (sign: $; code: USD; also abbreviated US$), is referred to as the U.S. dollar or American dollar. coin buyers

  3. I can only express a word of thanks! Nothing else. Because with the content on this blog I can add knowledge. Thank you very much has been sharing this information. AvriqAvriq India


  4. imo
    imo downloading
    imo download
    imo app
    imo apk
    Then, the app will need to get read off of disk again. ... but they would also download.

  5. This comment has been removed by the author.

  6. Mona was great (extremely nice, prompt, and knowledgeable) for arranging Jordan Shoes For Sale Cheap everything before our Ray Ban Prescription Sunglasses arrival: booking, time frame, useful advice, suggestions, bookings for specific restaurants we New Black Yeezys wished to dine at.

  7. I conceive you have noted some very interesting points, regards for the post.

  8. "Many thanks for the excellent information provided in this post. It's truly valuable and greatly appreciated." shell pearl wholesaler