6 ms·

Is this bad? Many said the EUR strength was a curse for most of the EU states (i.e. Greece, Italy etc) except Germany.

dsq 4y ago
A weaker currency is better for exports. So Italy can export cars, or olive oil, and the foreign currency it receives will buy more euros for paying employees, local suppliers, etc.
- logicchains 4y ago
  >A weaker currency is better for exports. Only for exports that don't rely on imported components, because such components will get more expensive.
  - dsq 4y ago
    Quite right, imports get more expensive. I guess it's only beneficial if you have most of the supply chain in-country.
    - anony999 4y ago
      Could you say that it encourages local supply chains?
      - dsq 4y ago
        I think so, given a healthy market. Sometimes fiat decisions or policies can discourage or outright prevent local supply from developing. The key is balance.
  - ThinBold 4y ago
    > rely on imported components This doesn't matter. You buy wheat at $100 and sell breads at $250. You net $150 and convert that to, say, €150.
- mixedCase 4y ago
  And it merits stating the obvious: In turn, employees and local suppliers suffer a worse quality of life as their salary loses buying power. Inflation redistributes wealth from people who earn and save in local currency (lower and middle class most impacted) to benefit those who deal more in foreign currency (upper middle class, rich people). Any inflation above the stability rate, produced by monetary policy, is government thievery plain and simple. I say this as an exporter who financially benefits from local currency inflation.
  - dsq 4y ago
    Absolutely, that's why it's a silver lining in a very dark cloud. Ordinary folks (myself included) suffer greatly in inflation. The only real beneficiaries are exporters of locally produced goods or services
bitshiftfaced 4y ago
If anything, Germany is thought to benefit (some said "unfairly") from the Euro, which is weak for its economy, but strong for other member countries. It allows Germany a competitive advantage when it comes to exports.
charlieyu1 4y ago
The market rises, average folks lose money. The market falls, average folks lose money.

dsq 4y ago

A weaker currency is better for exports. So Italy can export cars, or olive oil, and the foreign currency it receives will buy more euros for paying employees, local suppliers, etc.

logicchains 4y ago
>A weaker currency is better for exports. Only for exports that don't rely on imported components, because such components will get more expensive.
- dsq 4y ago
  Quite right, imports get more expensive. I guess it's only beneficial if you have most of the supply chain in-country.
  - anony999 4y ago
    Could you say that it encourages local supply chains?
    - dsq 4y ago
      I think so, given a healthy market. Sometimes fiat decisions or policies can discourage or outright prevent local supply from developing. The key is balance.
- ThinBold 4y ago
  > rely on imported components This doesn't matter. You buy wheat at $100 and sell breads at $250. You net $150 and convert that to, say, €150.
mixedCase 4y ago
And it merits stating the obvious: In turn, employees and local suppliers suffer a worse quality of life as their salary loses buying power. Inflation redistributes wealth from people who earn and save in local currency (lower and middle class most impacted) to benefit those who deal more in foreign currency (upper middle class, rich people). Any inflation above the stability rate, produced by monetary policy, is government thievery plain and simple. I say this as an exporter who financially benefits from local currency inflation.
- dsq 4y ago
  Absolutely, that's why it's a silver lining in a very dark cloud. Ordinary folks (myself included) suffer greatly in inflation. The only real beneficiaries are exporters of locally produced goods or services

bitshiftfaced 4y ago

If anything, Germany is thought to benefit (some said "unfairly") from the Euro, which is weak for its economy, but strong for other member countries. It allows Germany a competitive advantage when it comes to exports.

charlieyu1 4y ago

The market rises, average folks lose money. The market falls, average folks lose money.