Sunday, March 21, 2010

Slow motion...

...The dissembly of the Euro area continues. An arrangement to centralize monetary policy but maintain fiscal policy and taxation power among the member states is inherently unstable.

The epoch of ever-more intertwining between sovereign nations has reached a negative balance point. "Progress" is a largely fictional invention. Progress toward what, I always ask? More's Utopia? Plato's Republic? Marx's just equilibrium?

March 20 (Bloomberg) -- The euro posted its biggest five- day drop against the dollar since January as European Union leaders sparred over financial assistance to Greece before a summit meeting next week, damping appetite for the currency.

The dollar and the yen rose against most major counterparts as India unexpectedly raised interest rates and commodities fell, discouraging demand for assets linked to growth. The euro declined against most major currencies after German Chancellor Angela Merkel said on March 17 the International Monetary Fund may be the only answer to Greece’s problems.

“Germany saying it wants the IMF involved creates more uncertainty of what the commitment is to provide Greece support,” said Ronald Leven, a New York-based currency strategist at Morgan Stanley. “Greece getting a credible fiscal policy in place -- that’s what matters.”

The euro slid 1.7 percent, the most since a 2 percent drop for the five days ended Jan. 29, to $1.3530 yesterday, from $1.3769 on March 12. The 16-nation currency fell 1.8 percent to 122.51 yen, from 124.69 a week earlier. The dollar was little changed at 90.54 yen, compared with 90.56.

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