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Why has the Euro kept its value?

 
 
Reply Wed 10 Oct, 2012 02:40 pm
There are several Euro countries who should have declared bankruptcy long ago, but the European Central Bank keep promising to support/fund the worthless bonds issued by those countries.

My question; why is the Euro keeping its value against the US dollar when most of their bonds are worth pennies on the Euro?

What happens when Greece is dropped from the Euro? Their economy is worsening, and there's no hope of their economic recovery to pay back all the loans they received.

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Type: Discussion • Score: 2 • Views: 1,676 • Replies: 4
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Gregoryssimp
 
  1  
Reply Wed 10 Oct, 2012 09:12 pm
@cicerone imposter,
Hello Members,

Euro banknotes contain features that aim to make it difficult to make realistic copies of them. If you have a euro banknote and want to check that it is genuine, you should first feel the surface of the note. The print on genuine euro notes is raised, and the lettering of the initials of the European Central Bank, along with the numerals indicating the value of the note, will have a slightly rough feel. Hold the note up to the light to check for a see-through register, a security thread and a watermark. The watermark appears in the non-printed areas of the paper and features an architectural image. The security thread is embedded in the paper during the banknote manufacturing process and shows as a dark line, running from the top to the bottom of the note.

As Europe’s sovereign debt crisis has ground on and the once unthinkable prospect of a breakup of the Continent’s currency union has become a realistic possibility, the euro itself has remained surprisingly resilient, especially against the dollar.


Thanks and Regards,
Gregorys Simp
engineer
 
  1  
Reply Wed 10 Oct, 2012 09:15 pm
@cicerone imposter,
Because the European central banks are not printing more currency, they are just moving currency around inside the Euro zone.
cicerone imposter
 
  1  
Reply Wed 10 Oct, 2012 09:17 pm
@Gregoryssimp,
Thank you for your input; however, can you provide some insight into why the Euro is holding up so well?
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cicerone imposter
 
  1  
Reply Wed 10 Oct, 2012 09:22 pm
@engineer,
You call in "moving currency around," but the central bank is expanding that circulation.

From market watch.
Quote:
FRANKFURT (MarketWatch) -- Money supply across the 17 nations that share the euro grew faster than expected in July, data from the European Central Bank showed Tuesday. M3, the broadest measure of money supply, expanded at an annual rate of 3.8% in July, accelerating from 3.2% in June. Economists had forecast a 3.3% annual increase. Meanwhile, private-sector loans from euro-zone institutions saw a 0.1% year-on-year rise in July after contracting 0.2% in June, the ECB said.
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